TCR_Public/980930.MBX T R O U B L E D   C O M P A N Y   R E P O R T E R
   Wednesday, September 30, 1998, Vol. 2, No. 191


AHERF: Bidder Pulls $460 Million Offer
ACME METALS: Case Summary & 20 Largest Creditors
ACME METALS: Seeks Relief Under Chapter 11
BRUNO'S: Comparable Store Sales Drop 13.7%
CELLPRO: Announces Asset Sale and Resignation of CEO

HILLS STORES: Poor Operating Results
HOMEOWNERS MORTGAGE: Seeks Authority to Sell Assets
KIA MOTORS: 3rd Auction May Be Sweeter
LOT$OFF: Plans To Maximize Shareholder Value

MARVEL ENTERTAINMENT: Minority Shareholders Can Lose
MERIS LABORATORIES: Milbank, Tweed Leads Sale
NATURAL GAS VEHICLE: Case Summary & 20 Largest Creditors
PHILIPPINE AIRLINES: To Resume Flying Next Week
PINNACLE BRANDS: Seeks Approval of Asset Purchase Agreement

SMITH CORONA: Financial Results For Fourth Quarter
SUNBELT NURSERY: Seeks To Employ Real Estate Brokers
THE CARE GROUP: Case Summary & 20 Largest Creditors
UNISON HEALTHCARE: Kremser Group Objects to Plan

VENATOR GROUP: Selling 357-Store German Woolworth's


AHERF: Bidder Pulls $460 Million Offer
If creditors of the Allegheny Health Education and Research
Foundation's eight bankrupt Philadelphia hospitals were
disappointed with the dearth of written bids in U.S.
Bankruptcy Court Friday, they must have become
despondent yesterday.

In a development that could sharply reduce the money
available to pay creditors' claims, Nashville, Tenn.-based
Vanguard Health Systems, the only formal bidder for all
eight AHERF institutions, rescinded its $460 million
cash  offer, citing a decline in the hospitals' admission
rate, and uncertainty over the future of their academic
hub, the Allegheny University of the Health Sciences.

In filings that were made public in court yesterday, AHERF
and its bankrupt subsidiaries listed debts of $1.5 billion
- about $200 million more than they estimated when they
filed for protection from creditors in July.

Not only will a lower sale price mean less money to spread
among creditors, the higher debt figure means more claims
to pay. Several lawyers have privately said the less money
there is to pay creditors, the more likely it is they will  
find a way to bring AHERF's Western Pennsylvania
hospitals, including Allegheny  General, into the
proceedings. The foundation continues to maintain that
those hospitals, which are not in bankruptcy,
are financially separate and immune to  the proceedings.

As the case started, even the most optimistic scenario
would have left creditors with only about 54 cents for each
dollar they were owed.   The only other bidder for any of
the hospitals, Temple University, put in a $12.5 million
cash offer for St. Christopher's Hospital for Children, an  
institution that is widely viewed as the crown jewel of
AHERF's Philadelphia operations and one that officials
thought would fetch between $92 million and $100 million.

At a bankruptcy court hearing that was intended to set up
bidding procedures for an auction of the hospitals today,
AHERF attorney Lee Powar told Judge M.  Bruce McCullough
that the Vanguard offer was "no long a viable

He said AHERF and its creditors would continue negotiating
with the for-profit health care concern and other potential
bidders in an attempt to obtain an agreement the foundation
could recommend to the court this morning.

Powar said Vanguard told AHERF it believed the value of the
hospitals had fallen because of a sharp decline in the
number of patients they treat. AHERF spokesman Tom Chakurda
later confirmed that admissions at the hospitals were  
off by 14 percent for June, July and August compared with
the same period a year ago. The hospitals have suffered
patient losses partly because some of their highest- volume
physicians have left.

An attorney for Vanguard declined to indicate how much the
company believed the value of the hospitals has declined or
how much less it would offer. He did say the reduction
would be substantial.

AHERF's Powar also said the unsettled fate of Allegheny
University of the Health Sciences had influenced Vanguard's

On Friday, Tenet Healthcare Corp. cited concerns about the
lack of a viable financial plan for the university in its
decision not to submit a written bid for the AHERF
hospitals. It had been Vanguard's only known rival for all
eight institutions and had earlier made a preliminary offer
of $465 million.

One possibility is that the university, which serves as the
academic hub for the hospitals and gives them some of their
value, will be reorganized by Zurbrugg Health Foundation, a
heretofore unheard of AHERF subsidiary that is not part of
the massive bankruptcy. AHERF said on Friday that Zurbrugg
had submitted a bid for the university. That offer was not
available in court documents yesterday. Powar declined to
say how Zurbrugg would fund such a reorganization. He said
it does have some assets, primarily real estate, but  
declined to elaborate.(Pittsburgh Post Gazette - 09/29/98)

ACME METALS: Case Summary & 20 Largest Creditors

Debtor:  Acme Metals Incorporated
         13500 South Perry Avenue
         Riverdale, Illinois 60827

Type of business: The debtor is an integrated, iron and
steel producer and fabricator, manufacturing flat-rolled
steel, including sheet to strip steel, steel strapping and
strapping tools, and steel tube and pipe.

Court: District of Delaware

Case No.: 98-2179    Filed: 09/28/98    Chapter: 11

Debtor's Counsel: Laura Davis Jones
                  Young Conaway Stargatt & Taylor, LLP
                  11th Floor, Rodney Square North
                  P.O. Box 391
                  Wilmington, Delaware 19899-0391
                  (302) 571-6600

Total Assets:            approx. $813,713,000
Total Liabilities:       approx. $541,163,000

No. of shares of preferred stock              0          0
No. of shares of common stock         11,677,520   over 500  

20 Largest Unsecured Creditors:

   Name                              Amount
   ----                              ------         
State Street Bank and Trust Co.      $52,623,000
Brown Brothers Harriman & Co.        $33,500,000
Morgan Stanley & Co.                 $22,967,000
Chase Bank of Texas NA               $22,750,000
Investors Bank & Trust               $20,000,000
Boston Safe Deposit and Trust Co.    $15,740,000
Nations Banc Montgomery Securities    $6,360,000
The Interlake Corporation             $6,000,000
Bank of New York                      $4,500,000
Cleveland Cliffs Iron Co.             $4,000,000
Nesbitt Burns Inc.                    $3,500,000
U.S. Bank National Ass'n.             $2,400,000
Merrill Lynch, Pierce, Fenner         $2,125,000
Fiduciary Trust Co. Int'l.            $2,000,000
Prudential Securities Custody         $2,000,000
Chase Manhattan Bank                  $1,500,000
Prudential Securities Incorporated    $1,248,000
Commonwealth Edison                   $1,200,000
Citicorp Securities, Inc.             $1,000,000
AK Steel Company                      $1,100,000

ACME METALS: Seeks Relief Under Chapter 11
Acme Metals Inc. says that it and its wholly owned
subsidiaries, Acme Steel Co., Acme Packaging Corp., Alpha
Tube Corp., Alabama Metallurgical Corp., Acme Steel Company
International Inc., have 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.

Company officials also said that it has entered into an
agreement in principle, subject to bankruptcy court
approval, with BankAmerica Business Credit Inc., a  
subsidiary of Bank of America National Trust & Savings
Association, to obtain postpetition debtor-in-possession
financing.  The agreement is for a 24 month working capital
facility that will provide a secured line of credit up to
$100 million to fund short term cash needs.

The company said it believes that such funds, together with
current cash on hand will provide the liquidity for normal
day-to-day operations, including honoring all postpetition
trade and employee obligations.

Acme Metals said it filed its voluntary petitions for
reorganization under Chapter 11 after management determined
that action was required at this time to  preserve the
operational strength and assets of the company's businesses
while  their debt is restructured.

Stephen D. Bennett, president and CEO said, ''The decision
to enter the Chapter 11 reorganization process was a very
difficult step for us to take. We carefully considered all
the alternatives and what effect such a reorganization
would have on our shareholders, employees, customers,
creditors, vendors and on the community and, on balance, we
believe this was the best course available to  us.

''Our business will continue and we intend to reorganize
and exit Chapter 11 as  soon as possible,'' he added.

BRUNO'S: Comparable Store Sales Drop 13.7%
Bruno's comparable-store sales continued to plummet during
the second quarter,falling 13.7% on top of an 8.7% decline
last year. (F&D Reports 28-Sept-98)

CELLPRO: Announces Asset Sale and Resignation of CEO
CellPro, Incorporated (Nasdaq:CPRO) announced that it has
executed a letter of intent to sell essentially all of its
intangible assets and intellectual property to Nexell  
Therapeutics, Inc., a subsidiary of VIMRx Pharmaceuticals,
Inc., for $3 million in VIMRx registered securities.

CellPro also agreed to appoint Baxter Healthcare
Corporation as its exclusive worldwide distributor of a
limited number of disposable kits for its CEPRATE SC
Stem Cell Concentration System. Additionally, the company
has agreed to settle all issues remaining outstanding in
its ongoing patent litigation with Baxter, John Hopkins
University and Becton Dickinson & Company for payments
totaling approximately $15.6 million.

The letter of intent contemplates that CellPro will
discontinue all operations other than the manufacturing and
service functions necessary to support a limited quantity
of CEPRATE SC kits, intended to ensure the medical
community has continued access to stem cell selection
technology. The letter of intent also contemplates that
consummation of the sale transaction will be conditioned
upon court approval of bankruptcy plan of reorganization to
be filed promptly after execution of definitive agreements.
In connection with the announcements  made today, CellPro
will discontinue its European operations. Workforce  
reductions resulting from the announced transactions will
affect approximately  93 employees worldwide, and include
the resignation of Rick Murdock, President and Chief
Executive Officer.

The biotech company also has settled all issues remaining
in its patent litigation with Baxter Healthcare Corp., John
Hopkins University and Becton Dickinson & Co. and will pay
about $15.6 million. In August a U.S. appeals court ruled
CellPro has infringed patents during the development of a
bone marrow transplant system, according to Reuters.

In an unusual move that affects a class-action federal
lawsuit, Medshares Inc. forced a financially bleeding home
health care company it manages into Chapter 11 bankruptcy
last week.   The involuntary bankruptcy petition
automatically halts the lawsuit filed against Wilmington-
based Comprehensive Home Health Care, Memphis-based  
Medshares and eight other companies.

Employees of Comprehensive sued in U.S. District Court in
Wilmington in August on behalf of all employees in North
Carolina who lost insurance benefits for two months this
year after Medshares took over management of
Comprehensive's operations in the Carolinas.

Medshares filed its petition for involuntary Chapter 11 on
Sept. 18. Bankruptcy lawyers said that's a rare procedure
made even more unusual because both the creditor,
Medshares, and Comprehensive are defendants in a pending  
lawsuit. Lawyers who specialize in bankruptcies said the
action automatically halts all lawsuits against

Chapter 11 filings typically are used to protect a business
from claims while it reorganizes itself and continues to
operate.  But it's not clear whether the bankruptcy in this
case was a move Medshares made to protect itself from the

"We're hoping that it is not," said Joel Rhine, a
Wilmington lawyer representing the employees. "We're going
to try to give them the benefit of the bargain until we
determine whether they are trying to hide."

"That would be an interesting motive," said Al Butler Jr.,
a Wilmington bankruptcy lawyer who acts as a trustee in
other cases. Mr. Butler is not connected to this case, but
he said Medshares benefits from the automatic stay  
now slapped on the lawsuit.

"Obviously we're disappointed by any delays that could
cause our clients, however there are a substantial number
of defendants that have liability in this case," Mr. Rhine

The lawsuit alleges employees were left with medical bills
when payments to company insurance plans stopped. The
employees allege the companies conspired to take payroll
deductions for benefit plans and use them for other
business ventures.  The lawsuit is intended to cover
Comprehensive employees across the state and alleges the
problem began when Medshares took over management of the
Wilmington company on April 1.The lawsuit alleges fraud,
negligence, breach of contract, theft and racketeering.

Though halting the lawsuit is one effect of the Chapter 11
bankruptcy, there  are others. Comprehensive has been in a
state of financial crisis since last year. Going into
bankruptcy may allow the company to operate while it  
reorganizes to get back on its feet.

Meanwhile, the company has taken other, internal steps.

Three days before the bankruptcy filing, Comprehensive
management notified employees that a 3.1 percent across-
the-board pay cut would become effective  Sept. 16,
according to a company memo. The memo said the action was
necessary  because monthly visits, a measure of business
volume in the home care industry,  "have been steadily
declining" by as much 50 percent in the last three fiscal  

According to Mr. Butler, the trustee in this case will have
to make one of three recommendations to a bankruptcy judge:

*  Dismiss the petition, putting Comprehensive and
Medshares back in their previous legal and financial

*  Convert the bankruptcy from Chapter 11 to Chapter 7,
which would mean liquidation of Comprehensive and an end to
the company.

*  Convert the involuntary Chapter 11 petition to a
permanent Chapter 11 bankruptcy, which could still allow a
lawsuit to move forward but protect the  companies from
legal and financial claims against them.

Mr. Butler said that in both the Chapter 7 and Chapter 11
scenarios, the  action "would have a real chilling effect
on the plaintiff."

It's possible the employees would have to weigh the benefit
of pursuing a lawsuit in those situations against the
company's assets and the legal complications.

(Morning Star Wilmington - 09/26/98)

HILLS STORES: Poor Operating Results
Hills Stores Company's poor operating results have reversed
any optimism expressed by factors and analysts earlier in
the year. Proof is found in the precipitous decline in the
price of the Company's 12.5% Senior Notes. In early July
the Notes were hovering around $100, but have since
plummeted to $42. (F&D Reports 28-Sept-98)

HOMEOWNERS MORTGAGE: Seeks Authority to Sell Assets
The debtor, Homeowners Mortgage & Equity, Inc., is seeking
authority to sell FHA Title I Loans by private sale.  As a
result of cooperative efforts between the debtor and
Guaranty Federal Bank, the debtor agreed to market certain
loans under the "Warehouse Line." The debtor had a
warehouse line of credit with Guaranty Federal Bank, FSB
which allowed the debtor to borrow 100% of the face amount
of the loans up to an aggregate indebtedness of $20
million.   The debtor negotiated a contract with Paladin
Financial, Inc. for the sale of certain FHA Title I Loans
securing the Warehouse Line.  The purchase price paid by
Paladin will be 90% of the unpaid principal balance
existing on the Loans at the date of closing plus accrued
interest on each Loan up to the date of closing, plus the
amount of any FHA insurance premiums.  The prospective
purchaser, Paladin, has conditioned its obligation to
purchase the loans on a closing date no later than
September 28, 1998.

KIA MOTORS: 3rd Auction May Be Sweeter
Creditor banks said Monday they would sweeten the  
terms of a third auction to sell off bankrupt Kia Motors
Corp., presumably by  swallowing more of its debt.

An official at Kia's largest creditor, state-run Korea
Development Bank, said officials want to make sure the
automaker is sold this time, following two previous failed

Various news media said the banks had agreed to write off
up to $3.2 billion of Kia's $8.4-billion debt. They earlier
had agreed to write off $2.1 billion, but that didn't
satisfy potential buyers who wanted further debt
reductions. (Detroit News; 09/29/98)

LOT$OFF: Plans To Maximize Shareholder Value
LOT$OFF Corporation (OTC BB:LOTS) announced its plans to
"maximize shareholder value," including "collecting on
significant judgments with respect to important  
litigation brought by the Company."

CEO Charles "Hop" Fuhrmann stated that "the Company is
clearly focused on collecting on the substantial award
obtained as a result of a jury verdict against Chase
Manhattan Bank" (NYSE:CMB). "We have been very patient in
trying to reach satisfactory resolution with defendant
Chase; we intend to vigorously pursue collection of the
award for our shareholders."

As previously reported, the Company has received a jury
verdict and substantial judgments in its favor from a
lawsuit related to certain parties' breaches of  
contractual obligations to purchase 1,500,000 shares of its
predecessor's common stock and actions in misappropriating
and removing these shares from an escrow account prior to
payment for such shares.

In November 1994, the Company's predecessor received
subscriptions for approximately 1,810,000 shares of its
common stock in a Regulation S offering to qualified
investors. Net proceeds of approximately $861,000 were
received from the sale of 310,000 shares, and the Company
recorded a subscription receivable for the purchase
agreements for 1,500,000 shares for which proceeds  
were never received.

On Feb. 21, 1995, a lawsuit (Case No. SA-95-CA-0159) was
filed in the United States District Court in San Antonio,
Texas, against certain companies and individuals in
connection with the theft of the 1,500,000 shares of common  
stock which certain of the defendants had agreed to
purchase at $3.65 per share. Among other counts, the
lawsuit alleged breaches of contracts, securities fraud,
conspiracy and conversion. The conversion claim related to  
actions of the defendants in the transferring, selling and
trading of the shares despite the fact that the defendants
had never paid for such shares. The lawsuit sought recovery
of actual and punitive damages and pre- and post- judgment

On Oct. 14, 1997, the trial of this case began, and, on
Nov. 20, 1997, at the close of evidence, the Company
obtained a jury verdict against Chase Manhattan  
Bank on its claim of conversion in the amount of $150,
975,000, representing $12,975,000 in actual damages and
$138,000,000 in punitive damages. On Nov. 21,  1997, the
Company moved the court to enter a final judgment against
Chase in the amount of $148,575,000, which reflects the
jury's verdict, minus a credit for another defendant's
prior settlement amount.

On Dec. 4, 1997, the court entered a judgment against Chase
in the Company's favor for $148,575,000, plus costs of
court, pre-judgment interest on  $12,975,000 at 10% per
annum from Nov. 18, 1994, until Dec. 4, 1997, and post-
judgment interest on the entire judgment amount at 5.42%
from Dec. 4, 1997.

Subsequently, Chase filed five post-judgment motions with
the court: motion for new trial; motion to alter or amend
the judgment; renewed motion for judgment as a matter of
law; motion to apply a settlement credit and motion
for leave to  conduct oral deposition; and motion for
hearing. On Feb. 23, 1998, the court, having considered
such motions, the supplements to such motions, the response  
of the Company to such motions and the entire record in
the cause, denied all of Chase's post-judgment motions.

Chase appealed the judgment entered by the court to the
Fifth Circuit Court of Appeals in New Orleans. The Fifth
Circuit Court of Appeals requested and  arranged a pre-
hearing conference among the parties in New
Orleans on May 14, 1998. The parties were unable to reach a
resolution at such conference, and, while discussions have
continued, there is no sign of resolution by settlement.  
On Aug. 6, 1998, Chase filed its appeal brief with
the Fifth Circuit Court of  Appeals, and the Company has
until Oct. 8, 1998, to file its response.

In addition to the verdict against Chase, the Company
obtained a $30, 000,000 default judgment against Yanni
Koutsoubos on its claims for violation of Section 10b-5 of
the Securities Exchange Act and common law fraud on Nov.
20, 1997. Such judgment represents $10,000,000 in actual
damages and $20,000,000 in punitive damages.

On April 6, 1998, the court entered default judgments
against Betafid S. A.,  Andalucian Villas (Forty-Eight)
Limited, Arnass Limited and Brocimast Enterprises Limited
on the Company's claims for violations of Section 10b-5 of  
the Securities Exchange Act and common law fraud. Such
judgments total $114,375,000, plus pre-judgment interest on
$12,975,000 at 10% per annum from  Nov. 18, 1994, until
April 6, 1998 and post-judgment interest on the entire  
amount at 5.31% from April 6, 1998.

As stated above, the Company intends to vigorously pursue
the substantial judgment obtained against defendant Chase
in the above matter. The Company, based upon advice from
counsel, believes that it will obtain a favorable result
in the appeal of the judgment against defendant Chase
referenced in the above proceeding. To the extent
reasonable, the Company intends to vigorously pursue  
the collection of the sums owing to the Company as per the
judgments that have been obtained against the other
defendants, especially Mr. Koutsoubos, although
the collection of these judgments is uncertain. The Company
is represented by counsel in these matters on a contingency
fee basis.

MARVEL ENTERTAINMENT: Minority Shareholders Can Lose
It reads like a story line lifted from a comic book: two
superheroes do battle, blurring the line between virtue and
villainy. In the process they lay waste to their
surroundings and a few innocent bystanders are rubbed out.
For Marvel Entertainment Group Inc., this was no fantasy.
The superheroes at war were billionaire financiers and
sometime corporate raiders Ronald Perelman and Carl Icahn.
In their legal struggle for control of comic-book king
Marvel, two of the world's richest men may have speeded its
demise. The innocent bystanders in this story were the
common shareholders of Marvel stock.

The saga at the company, which is guardian of such heroes
as Spider Man, culminated this month in a court-adjudicated
settlement that will see Marvel merge with New York's Toy
Biz Inc.  It raises questions about what happens to
minority shareholders when powerful investors buy into a
company.  Such investors as Perelman and Icahn tend to
arrive on the scene when a company is in trouble or
undervalued in some way.  For seriously troubled firms like
Philip Services Corp. and Sunbeam Corp., other shareholders
may see them as avenging angels. But as the Marvel story
shows, investing alongside them can be hell.

In the case of Marvel, Icahn's High River LP owned about
US$40 million of the company's bonds, which pitted him
against equity- holder Perelman for control of the flailing
company.  Icahn contested a reorganization by Perelman,
which he said would diminish bondholders' investment, and
eventually seized control of the company's equity, which
had been offered as collateral on the bonds. His first move
was to send Perelman packing and try to take control of
Marvel himself.

The protracted legal fight was resolved only when the court
appointed a trustee to help steer the company through
bankruptcy protection. That trustee, retired judge John
Gibbons, had to satisfy dozens of constituents.  In the
end, the bondholders got paid in cash and stock in the
newly formed partnership of Marvel and Toy Biz. Icahn is
also to receive US$3.5 million for legal fees. Holders of
Marvel stock, which fell from US$13 in early 1996 to  
about US18 cents, will receive a range of warrants to
purchase shares in the new company.

Perelman, through holding company MacAndrews & Forbes, is
the second-largest shareholder in appliance maker Sunbeam,
having sold it Coleman Co. in March in return for stock.
Because the value of that stock subsequently plummeted 80%
on  news Sunbeam may have overstated its 1997 sales,
Perelman had grounds to sue the troubled firm.

Instead, Sunbeam offered him 23 million warrants, priced at
US$7. That will double his stake in the company to 28%.
Even though exercising those warrants represents a 23%
dilution, Sunbeam shares rose on the news. That's partly
because a crippling lawsuit had been averted, but partly
too because investors have confidence in Perelman, analysts

Those same investors now own stock that will be worth less
after the warrants are exercised, yet the stock rose 30%
the day the deal was struck - offering quantifiable
evidence of their confidence in Perelman.   Not all
investors cheered Perelman's greater role at Sunbeam, where
he has installed a new chief executive and a new board

"I haven't found that investing along with Ron Perelman has
been a successful strategy over time," says Joe Kinnison,
money manager at American Express Financial Advisors. "When
push comes to shove, Ron gets paid and the rest of us
don't." (Financial Post Toronto-08/29/98)

MERIS LABORATORIES: Milbank, Tweed Leads Sale
The law firm of Milbank, Tweed, Hadley & McCloy obtained
bankruptcy court approval of sale and overbid procedures
regarding the proposed sale of substantially all the assets
of Meris Laboratories, Inc. top Unilab Corporation for  
approximately $16.5 million.  The purchase price consists
of a convertible subordinated note for $14 million and
$2.52 million in liabilities payable to Meris in equal
installments over 72 months. The sale is planned for late
October.  Meris previously filed a voluntary petition to
reorganize under Chapter 11.

NATURAL GAS VEHICLE: Case Summary & 20 Largest Creditors
Debtor:  Natural Gas Vehicle Systems, Inc.
         5580 Cherry Avenue
         Long Beach California 90805

Court: District of Delaware

Case No.: 98-2163    Filed: 09/24/98    Chapter: 11

Debtor's Counsel: Francis A. Monaco, Jr.,
                  Walsh & Monzack, PA
                  400 Commerce Center
                  1201 N. Orange Suite 400
                  Wilmington, Delaware
                  (302) 656-8162

20 Largest Unsecured Creditors:

   Name                              Nature          Amount
   ----                              ------           -----
Deltec Asset Management corp. Unsec.Noteholder       $2.6 M
Deltec Asset Management Corp. Unsec.Noteholder       $2.5 M
Caithness/NCF, LP             Unsec.Noteholder   $1,316,483
Equitable Resources Energy    Unsec. Noteholder    $300,000
Pickens Fuel Corp.            Unsec. Noteholder    $250,000
Green Fuels, Inc.             Unsec. Noteholder    $232,604
Lindberg Heat Treating Co.    Trade Debt           $182,967
Riordan & McKinzie            Professional Fees    $134,439
Orrick, Herrignton            Professional Fees    $115,000
Spectrulite Consortium Inc.   Trade Debt           $107,287
Caithness Corporation         Unsec. Noteholder    $100,000
Norman C. Fawley              disputed              $98,613
Reed Smith Shaw & McClay      Professional fees     $91,963
Southland Partners            Unsec. Noteholder     $61,042
GFI Control Systems, Inc.     Trade Debt             $6,698
Hoke Controls                 Trade Debt            $45,190
Stern Properties, LP          Unsec. Noteholder     $42,897
Fawpeas LP                    Unsec. Noteholder     $41,942
CMI/Composite Materials       Trade Debt            $38,124
KTS Services, Inc.            Trade Debt            $35,592

PHARMHOUSE CORP: In Default of Requirements for Lender
Pharmhouse Corp. was in default of its minimum net worth
and EBITDA covenant requirements during the second quarter,
subsequent to which its lender waived the non-compliance
for the quarter. The covenant default is particularly
disconcerting since it came only three short months after
the Company entered into the facility. (F&D Reports 28-

PHILIPPINE AIRLINES: To Resume Flying Next Week
PHILIPPINE Airlines (PAL) said on Monday that it  
will resume flight operations next week under an agreement
brokered by President Joseph Estrada between the management
of the debt- ridden airline and its unions.

PAL had ceased flying last Wednesday, forcing the U.S.
Export-Import Bank to seize two of the airline's Boeing
747- 400s. Its closure severely hampered domestic air
traffic, in which it had a near 80% share.

Estrada, facing the first crisis of his 91-day presidency,
brokered a charter agreement last weekend between a state-
run investment firm and Cathay Pacific Airways to cover the
shortage of flights and the Hong Kong carrier began flying
six daily flights earlier today.

Estrada said PAL's ground crew union wrote to him today
essentially agreeing to chairman and majority shareholder
Lucio Tan's strategy to return the flag carrier to profit
and repay its $2.1 billion debt.

It calls for a strike-free environment for 10 years in
exchange for 3 billion pesos' ($68.3 million) worth of
shares representing 20% equity plus proportional board
seats. Management will be given leeway to pare the work  
force to as low as 5,000 from the more than 8,000 workers
at present, with early retirement packages offered.

The airline has been in receivership for two months after a
22-day pilots' strike forced PAL to suspend debt payments.

Estrada said he ordered the country's corporate regulator,
the Securities and Exchange Commission, to revise PAL's
rehabilitation plan and request to creditors that "since
PAL planes are already being confiscated, that it be  
given a chance to restructure PAL's debts since the union
and management have reached an agreement." (Futures World;

PINNACLE BRANDS: Seeks Approval of Asset Purchase Agreement
The debtors, Pinnacle Brands, Inc., and its affiliated
companies, seek a court order authorizing and approving an
asset purchase agreement with Playoff Corporation.  The
agreement for the purchase has not yet been finalized,
however, the total consideration for the Assets is
estimated by the debtors to be approximately $10 million.

The assets to be sold to the buyer include the inventory
accounts receivable, all trademarks and tradenames, and
certain other tangible and intangible assets.  The buyer
will acquire substantially all of the debtors' sports
trading cared assets.

The debtor, Pinnacle Brands, Inc. was ordered by court to
submit a case status letter on behalf of the debtor and its
affiliated debtors.  

During the calendar year ended December 31, 1997, the
debtor generated net sale of approximately $124.5 million.  
As of March 29, 1998, the debtor reported unaudited balance
sheet assets of approximately $69 million and unaudited
balance sheet liabilities of approximately $300 million.

In July, 1998, the court approved the Financing Motion of
the debtors on an interim basis, and the final hearing was
continued to October 2, 1998. The Creditors' Committee has
filed an objection to the financing motion.

Shortly prior to the filing Date, each of the major league
licensors gave notice to the debtor of the termination of
their license agreements.  The debtors sought a TRO and
preliminary injunction to restrain the baseball and hockey
leagues from destroying inventory.  The court denied the

Although a Letter of Intent between Toy Biz and the debtor
expired by its own terms, the court ordered a Bidding
Procedures Order, requiring bids by September 21, 1998 with
an auction scheduled for September 25, 1998 and a hearing
for the highest bidder set for October 2, 1998.

The debtor is seeking a key employee retention and
severance program and on September 4, 1998 the Creditors'
Committee filed a motion to dismiss the cases.

SMITH CORONA: Financial Results For Fourth Quarter
Smith Corona Corp. (Nasdaq:SCCO) Monday announced financial
results for the fiscal year and fourth quarter ended June
30, 1998.

Concurrently, the company announced a set of key
initiatives designed to accelerate new product development,
marketing and sales; reduce expenses; and ultimately
maximize stockholder value.

For the year ended June 30, 1998, the company reported a
net loss of $6.6 million, or a loss of $2.36 per share, on
sales of $58.9 million, compared with net income of $7.3
million, or $2.96 per diluted share, on sales of $77.3  

The continuing worldwide sales decline in the company's
core electronic typewriter and supplies business was
partially offset by $3.8 million in sales of new
telecommunications products introduced in 1998. Results in
fiscal 1998 reflect an extraordinary gain of $1.2 million
and a nonrecurring gain on the sale of manufacturing
operations of $3.9 million, while results in fiscal 1997  
reflect an extraordinary gain of $8.1 million and benefit
plans curtailment gains of $9.9 million.

For the fourth quarter ended June 30, 1998, Smith Corona
reported a net loss of  $4.4 million, or a loss of $1.51
per share, on sales of $12.0 million, compared  with net
income of $4.9 million, or $1.89 per diluted share, on
sales of $16.9  million. Included in last year's fourth
quarter is a nonrecurring gain of $6.5  million due to a
change in post-retirement benefits.

"During the past year, Smith Corona moved away from its
manufacturing roots and stepped onto a new road as a
marketing and sales organization of technology  
products targeted primarily to the small office/home office
market,"  stated Peter N. Parts, chairman, president and
chief executive officer.  "In 1998, we launched 15 new
products, and we have several new products in the pipeline,  
including a PC-phone resulting from a relationship with
Mitel Corp.

"We continue to believe our key assets are the size of our
distribution network and the value of the Smith Corona
brand name. Our plan is to rapidly transition Smith Corona
from a manufacturing company to a sales and marketing
company with  strategic growth to come from new products.

"To implement this strategy, we intend to institute a
series of key initiatives designed to improve Smith
Corona's competitive capabilities while creating a  
lean, efficient and marketing-focused operating structure."

The company's restructuring program will encompass the
following near-term actions:

Reducing operating budgets to fit current and anticipated

Developing the appropriate sales and marketing
infrastructure and corporate organization in line with the
company's new focus;

Eliminating more than 100 positions from the current
employee level of approximately 225;

Increasing product sourcing by reaching beyond current
geographic markets with leading-edge technology partners;

Improving business processes, market access and competitive
capabilities by relocating to more efficient facilities and
selling or leasing the facility in Cortland.

Parts indicated that the development of the new corporate
organization would begin immediately and should conclude by
fiscal year-end, or June 30, 1999. The company will be
initiating contact with area businesses regarding job
opportunities for former Smith Corona employees. As a
result of the restructuring program, the company will
record a first-quarter pre-tax charge of approximately $1.2
million primarily related to employee severance.

Parts indicated that the "entire management team, from
middle managers on up," has developed a business strategy
that identifies key growth areas in product sourcing, sales
and marketing, operational effectiveness, human resource
development, and future business opportunities.

"We have created a complete framework for growth that
incorporates the best thinking and greatest expertise, both
inside and outside the company," he affirmed. "This is a
well-defined road map with the kinds of line-action items
and metrics to guide the company's future. I believe that
the steps we are taking will position Smith Corona for
successful, profitable growth."

Smith Corona has attracted new management talent in recent
months to fill positions in marketing, purchasing and sales
to fit the company's changing needs.  Additionally, at the
senior management level, the company Monday named  
Martin D. Wilson, vice president/controller, to the
position of senior vice president and chief financial
officer, effective Oct. 1.  Wilson, 38, replaces  
John A.  Piontkowski, who resigned from the company but
will continue to work with Smith Corona on a consulting

SMITH CORONA: To Cut Almost 45% of Workforce
Smith Corona Corp. said Monday it would cut  
almost 45 percent of its workforce due to continuing
declines in its core electric typewriter business.

Its decision to cut more than 100 jobs from its current
level of about 225 is part of a plan to move away from
manufacturing to marketing and sales of technology products
primarily for small offices.

Cortland, N.Y.-based Smith Corona said it would take a $1.2
million pretax charge in the first quarter of 1999
primarily related to employee severance.

The company said it would reduce operating budgets to fit
current and anticipated revenues, and would relocate,
selling or leasing its Cortland, N.Y., facility.

The company unveiled the restructuring as it reported a net
loss for the  fourth quarter ended June 30 of $4.4 million,
or a loss of $1.51 per share, on  sales of $12 million.
Last year it had net income of $4.9 million,
or $1.89 per  diluted share, on sales of $16.9 million.

The company stopped making typewriters in November, 1997,
and now outsources the manufacture of Smith Corona
products. The company has expanded from typewriters to
products such as wireless phones, fax machines and personal
electronic organizers.

Smith Corona stock was not trading Monday. It closed Friday
at $2.75 on Nasdaq.

SUNBELT NURSERY: Seeks To Employ Real Estate Brokers
Sunbelt Nursery Group, Inc. applied to the court to employ
CB Richard Ellis, Inc. as real estate brokers

THE CARE GROUP: Case Summary & 20 Largest Creditors
Debtor:  The Care Group, Inc.
         267 Park Avenue South
         Suite 12A
         New York, NY 10010

Type of business: Debtor is in the home health care and
mail order medication business.

Court: Western District of Texas - Austin Division

Case No.: 98-13247FM    Filed: 09/15/98    Chapter: 11

Debtor's Counsel: Vincent L. Hazen
                  Hazen & Terrill
                  111 Congress Avenue
                  Suite 500
                  Austin, Tx. 78701
                  (512) 477-3997

Total Assets:              $5,200,000
Total Liabilities:        $14,000,000
No. of shares of preferred stock              0          0
No. of shares of common stock         15,000,000        299  

20 Largest Unsecured Creditors:

   Name                              Nature         Amount
   ----                              ------         ------
Jack Gutkin                       Trade Debt      $475,000
United Healthcare                 Trade Debt      $347,000
McDermott Will & Emery            Trade Debt      $173,946
Deloitte & Touche                 Trade Debt      $140,000
M. Parisi & Son construction      Trade Debt       $84,854
B. Braun Medical                  Trade debt       $21,835
Bergen Brunsweig                  Trade Debt       $27,034
Bio Compression Systems           Trade Debt       $62,857
Nellcor Puritan Bennett      Trade Debt       $27,076
Equity Dynamics                   Trade Debt       $59,000
Financial Support                 Trade Debt       $32,045
Health Coalition                  Trade Debt       $24,581
Healthcare Financial Staffing     Trade Debt       $22,012
Izanus Homecare                   Trade Debt       $36,187
Cogen Technologies                Trade Debt       $18,636
McKesson General Medical          Trade Debt       $49,349
Medical Specialties               Trade Debt       $78,247
Medic PRN                         Trade Debt       $30,047
Meeker, Sharkey, & McBean         Trade Debt       $56,000
Jenkins & Gilcrest                Trade Debt       $50,000

UNISON HEALTHCARE: Kremser Group Objects to Plan
The Kremser Group, ("Kremser") a creditor of the debtor
files an objection to the joint plan of reorganization.  
Kremser states that the information in the Disclosure
Statement is inadequate, and that the liquidation analysis
is inadequate and inaccurate.

Kremser states that the Disclosue Statement fails to
provide creditors with information regarding the assets and
liabilities of each of the individual debtors, it fails to
adequately analyze alternatives to the plan, and it fails
to provide any information regarding the nature and amount
of administarative and professional fees that will be
reimbursed under the plan.

VENATOR GROUP: Selling 357-Store German Woolworth's
Venator Group is selling its 357-store German Woolworth's
operations for $552 million to a management-led team backed
by London-based Electra Fleming. In connection with the
transaction, Venator Group expects to receive after tax,
net proceeds of $440 million and an after-tax gain on
discontinued operations of approximately $16 million. In
1997, the division generated sales of approximately $1.3
billion and operating income before non-recurring items of
approximately $16 million. The sale comes a week after it
announced it will close its Kinney and Footquarters
footwear chains, which the Company said would allow it to
"strategically focus" on its most productive operations.
(F&D Reports 28-Sept-98)

For the past two years, Westmoreland Coal has been involved
in the fight for its life against the United Mine Workers
of America 1992 Benefit Plan, the UMWA 1974 Pension Trust,
and the UMWA Combined Benefit Fund, all of which are  
collectively known as "the Funds."

The last round of its Chapter 11 bankruptcy, which began
Dec. 23, 1996, and was precipitated by the amount
Westmoreland owed the Funds, was expected to have been
fought last week when competing plans for reorganization
were heard  before the bankruptcy judge. But, Westmoreland
instead filed for a dismissal of the case, prompting more
briefs and a continuance to October.

The dismissal motion cited "exceptional improvement in
{Westmoreland's} financial condition ... and substantial
changes in the law since the filing of these cases..."

Westmoreland's second quarter report looks significantly
stronger than in the prior year period. The company
reported net income of $36.3 million, compared to a net
loss of $554,000 for the same quarter in 1997; operating  
income of $46.5 million, compared to operating income of $3
million for the second quarter 1997; and an increase in
sales of coal from its subsidiary Westmoreland Resources
Inc. to 1.63 million tons from 1.56 million tons sold  
during the same period last year.

The improvement in financial status comes primarily from
the restructuring of the Rensselaer Cogeneration Project
with the Niagara Mohawk Power Corp.,  which netted
Westmoreland approximately $30 million in cash.

The "changes in the law" refer to two cases in which coal
companies have used differing arguments to limit or remove
their liability under the 1992 Coal Act. The Coal Act
established a statutory obligation to fund lifetime  
healthcare benefits for retirees of the coal industry.

The case of Kenneth A. Rushton, trustee of the estate of
Sunnyside Coal Co. vs. the Funds changed the premiums to
administrative taxes that are due and payable on a current
basis, even throughout the bankruptcy process--whether
it is a Chapter 11 reorganization or a Chapter 7
liquidation. Because of this decision, Westmoreland no
longer has the $146.1 million debt to the 1992
Plan  for present and future premiums. Instead, it owes a
smaller sum plus security and interest, which it said it
couldn't pay in 1996--but can pay now.

The Funds disagree with this decision. They say
Westmoreland should still have to pay the $146.1 million
debt--instead of the lesser amount that it now can and must
pay--rather than allowing the bankruptcy judge to overrule
the earlier decision.

Westmoreland's dismissal brief says the company will
"immediately pay in full all undisputed claims, in cash,
with interest; provide security as is required by ... the
Coal Act, (approximately $20.8 million) by the dismissal  
date; meet all of its presently foreseeable obligations,
including future premiums {assessed by the funds}; and
reinvest a significant residual cash balance in new
opportunities in an effort to increase the company's

According to the Funds' briefs, they also believe that
dismissal would be better than conversion to a liquidation
of the company. A plan for liquidation was filed by The
Equity Committee, which formed in June to file a competing  
plan or reorganization that benefits shareholders. While
Westmoreland says it has the means to pay its obligations
and comply with the Coal Act, the Funds are "suspicious and

"... there is considerable reason for suspicion and
skepticism about Westmoreland's most recent turnabout,"
says the brief in opposition to Westmoreland's dismissal
motion. "This case has demonstrated Westmoreland's  
devotion to whatever theory is likely to serve its
interests at any particular time, without regard to the
consistency of its positions."

The briefs say that if the dismissal is the preferred
option of the court,  that significant conditions should be
placed on Westmoreland to ensure its  compliance with the
dismissal and the Coal Act, including "additional  
collateral to secure future payment."

The Funds want to further limit Westmoreland's ability to
continue to try to reduce its premiums by limiting
"Westmoreland's ability to relitigate issues decided during
the bankruptcy, including the proper legal characterization
of  Coal Act premiums, constitutionality of the Coal Act,
and Westmoreland's claims  concerning the use of Medicare-
risk plans to reduce Coal Act premiums."

Westmoreland has stated publicly and to the court that it
plans to continue to litigate certain points regarding its
heritage costs. Also, it believes that the decision in the
case of Eastern Enterprises will cause significant  
rewriting or amendment of the Coal Act.

Under the Coal Act, Eastern Enterprises was assigned
beneficiaries as a "super reachback" company, which means
that it was in the coal business and employed certain
workers longer than any other coal company and thus was  
responsible for the lifetime benefits of these workers and
their dependents.

Eastern fought the assignment of 1,000 beneficiaries along
with the debt of millions of dollars to take care of them.

Eastern said the assessment violated the "Takings" and the
"Due Process of Law" clauses of the U.S. Constitution. The
U.S. Supreme Court decided in favor of Eastern, saying that
the case met the three criteria of the "Takings"

The three criteria are, "the economic impact of the
regulation, its interference with reasonable investment
backed expectations, and the character of the governmental
action."  Eastern's economic impact was substantial--$50
million to $100 million. Because it had been out of the
coal business for so long, it had no way of figuring such a
large liability into its investment- backed expectations.
The Justices further went on to say that they did not feel
a need to address  the "Due Process of Law" issue, but a
dissenting opinion said that this clause was a better
reason to rule in favor of Eastern.  The Funds believe that
this small part of the Coal Act can be severed from  
the statute without impacting the Act, the Funds, or the
obligation of other coal companies such as Westmoreland.
Thus, no sweeping changes or amendments loom on the horizon
to reduce Westmoreland's obligations.

In the meantime, Westmoreland continues to look for other
opportunities to improve its bottom line in order to
continue as a going concern and meet their obligations to
their retirees and workers. And they await the decisions
being made in courtrooms across the country, including the
bankruptcy court in Denver. (Copyright Colorado Springs
Business Journal Inc. Sep 14, 1998 Coast Business Gulfport
- 09/14/98)


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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.,
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Debra Brennan and Lexy Mueller, Editors.   

Copyright 1998.  All rights reserved.  ISSN 1520-9474.  
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