TCR_Public/981007.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, October 7, 1998, Vol. 2, No. 196

                  Headlines

APS HOLDING: Asset Purchase Agreement
APS HOLDING: Seeks OK For Smaller Sales Without Auctions
AMERICAN RICE: Olive Sale Set For October 7, 1998
BARRY'S JEWELERS: Merger With Samuel's Jewelers
BRADLEES: Disclosure Statement Approved

CAI WIRELESS: Shareholders Unhappy With Plan
CAJUN ELECTRIC: Ruling Upholds Payments
CIAO CUCINA: Merger Deal is Off
CONCORD ENERGY: Unsecured Creditors Committee Appointed
CRIIMI MAE: Files Voluntary Bankruptcy Petition

CRIIMI MAE: Ratings Lowered
EAGLE PICHER: Eagle-Picher reports losses
ELDER BEERMAN: Elder-Beerman shares tumble
FPA MEDICAL: Files Plan and Disclosure Statement
FRETTER: Modified Global Settlement Wins Approval

HEARTLAND WIRELESS: Reaches Agreement With Note Holders
NEWMONT GOLD: Sued Over Buyout
ONCOR: Considers Bankruptcy
PARAGON TRADE: Eyes Fourth Exclusivity Extension To Dec. 18
PASSPORT DESIGNS: Coda Music Announces Software Devlopment

PINNACLE MICRO: Involuntary Petition Dismissed
SCOTT CABLE: Files Prepackaged Liquidating Plan
SOUTHERN PACIFIC: Case Summary & 20 Largest Creditors
SOUTHERN PACIFIC: Developing Plan For Liquidation
TAL WIRELESS: Debtor Seeks Compromise of Controversy

UNISON HEALTHCARE: Order Extends Exclusivity
UNISON HEALTHCARE: Revises Financials
ZENITH: May Close Color Picture Tube Plant

                  *********

APS HOLDING: Asset Purchase Agreement
-------------------------------------
Subject to higher and better offers, APS Holding Corp.
entered into an Asset Purchase Agreement with General
Parts, Inc., and BWP Distributors, Inc., providing for the
sale of 9 of the Debtors' 23 distribution centers located
in:

            * Albuquerque, New Mexico;
            * Phoenix, Arizona;
            * Great Bend, Kansas;
            * Omaha, Nebraska;
            * Indianapolis, Indiana;
            * Winchester, Ohio;
            * Denver, Colorado;
            * Salt Lake City, Utah; and
            * Malvern, Pennsylvania;

for $113,500,000, of which roughly $87,000,000 will be
received at Closing.  The Debtors indicate they initiated
discussions with General Parts and BWP about this
transaction through The Blackstone Group.  Those
discussions led to earnest negotiations and execution of a
definitive agreement.  

The Asset Purchase Agreement provides that General Parts &
BWP will purchase:

    (a) Accounts Receivable less than 90 days old;

    (b) Assigned Contracts relating to the Purchased
Locations

    (c) Dirty Core and Warranty Inventory

    (d) Fixed Assets (being all machinery, equipment,
furniture, fixtures,
        computers and vehicles)

    (e) In-transit Inventory subject to open purchase
orders (including
        backorders)

    (f) New Inventory

    (g) Notes Receivable (being notes owned by Autoparts
Finance Company,
        Inc. and certain Warehouse Notes)

    (h) Purchased Real Properties

    (i) records relating to the Purchased Assets and
personnel records;

    (j) Permits, to the extent assignable;

    (k) customer lists.

General Parts & BWP agree to purchase the Assets and pay a
Purchase Price
equal to the sum of:

    (1) 85% of the Warehouse Distributor Cost of the New
Inventory;

    (2) 80% of the value realized on Dirty Core and
Warranty Inventory;

    (3) 100% of the Fixed Asset Book Value of the Fixed
Assets;

    (4) 100% of the principal amount of the Notes
Receivable plus accrued
        interests to the date of purchase;

    (5) 100% of the Warehouse Distributor Cost of the In-
transit Inventory;

    (6) 100% of the face amount of the Accounts Receivable
less prompt
        payment discounts; and

    (7) the aggregate price for the Purchased Real
Property;

    (8) minus $450,000.

The Debtors indicate that the sale may bring approximately
$113,500,000 into their estate.  In all events, the Debtors
believe that this sale agreement reflects the highest and
best price for the Nine Distribution Centers.

To assure that the Debtors are obtaining the highest and
best price for the Nine Distribution Centers, and to
protect General Parts & BWP's interests in this matter
(especially their economic investments to date), the
Debtors have sought and obtained Judge Walsh's authority to
pay Parts Source a $2,840,000 Break-Up Fee in the event
General Parts & BWP's bid is topped by a third-party.  The
Debtors believe the payment of a Break-Up Fee is
appropriate in this case because the Purchasers' efforts
(and considerable expenses) have established a floor for
further bidding by other interested parties.  APS submits
that a 2.5% Break-Up Fee is well within the range of
other Break-Up Fees approved by the Delaware Bankruptcy
Court in other chapter 11 cases. (Bankruptcy Creditors'
Service Inc. - APS BANKRUPTCY NEWS Issue No. l3)


APS HOLDING: Seeks OK For Smaller Sales Without Auctions
--------------------------------------------------------
APS Holding Corp. is quoted as telling the court that the
Debtors contemplate the possibility of future transactions
involving[] assets constituting a large portion of the
Debtors' estates, [and] the Debtors anticipate that
significant incremental value may be achieved for certain
Big A Stores and IWSs is they are sold swiftly on an
individual basis or in small groupings to interested
parties."
The Debtors relate that they have received certain offers
to purchase Stores from parties that would not be in a
position to purchase large numbers of Stores or other
assets in a single transaction.  The Debtors believe that
the greatest possible value for these and possibly other
Stores could be achieved if, in certain cases, Stores
(including inventory, receivables and fixed assets) could
be sold alone or in small groupings without the need to
engage in public auctions or seek separate Court approval
for each transaction.  

Accordingly, the Debtors ask the Court to approve
streamlined sale procedures when the consideration to be
received does not exceed $600,000 per Store or $3,000,000
per transaction.  

The Debtors propose that they will give notice of any
intended sale to the Committee and the DIP Lenders
identifying the prospective purchaser, a description of the
Stores, the proposed sale price and allocation among
assets, and other relevant information.  The Committee or
the DIP Lenders would have 5 days to raise any objection
with the Debtors.  Thereafter, the Debtors will provide 10-
days notice to any Potential Lienholder, Landlord,
or other Contract Party. (Bankruptcy Creditors' Service
Inc. - APS BANKRUPTCY NEWS Issue No. l3)

                  
AMERICAN RICE: Olive Sale Set For October 7, 1998
-------------------------------------------------
The debtor, American Rice, Inc. has set October 7, 1998 as
the final hearing date on the olive sale to Early
California Foods Acquisitaion Corporation.  The debtor
anticipates that issues concerning the conditional
assumption and assignment of debtor's contract with MDFC
Equipment Leasing Corporation will be raised and
adjudicated at such hearing.


BARRY'S JEWELERS: Merger With Samuel's Jewelers
-----------------------------------------------
Samuels Jewelers Inc. ("Samuels") announced  that it has
completed its merger with Barry's Jewelers Inc. (OTC
BB:BARYQ) ("Barry's"). The transaction consummates Barry's
Plan of  Reorganization which was confirmed by the U.S.
Bankruptcy Court, Central  District of California (Los
Angeles Division) on Sept. 16, 1998.

Samuels, which was initially capitalized on Oct. 2, with
$15 million in new equity, acquired all the assets of
Barry's pursuant to the transaction. The former Bondholders
of Barry's exchanged their bonds for equity in Samuels,
the  former unsecured creditors of Barry's will receive
$0.15 on the dollar for the  balance of their claims and
Barry's former secured financing facility was paid  
approximately $57.9 million in full satisfaction of their
notes. The proceeds  for these payments came primarily from
the proceeds from the new equity, cash  on hand and a draw
of approximately $32 million under Samuels $50 million  
working capital facility which also closed on Oct. 2.

Samuels, Barry's strongest, most well respected division,
will continue implementing the strategies and direction
established by the management team which was assembled to
develop Barry's Plan of Reorganization.

Randy N. McCullough, Samuels' president and chief executive
officer stated that "our new company name communicates a
major focus of our strategy for leveraging brand awareness
and increasing customer loyalty; converting our
five trade  names to operate under a single banner --
Samuels Jewelers. With the underlying confidence of all our
constituents and our strong and experienced management  
team, our new company is well positioned to compete
successfully in the  mainstream jewelry industry with a
considerable national presence. This truly marks the
beginning of a new era for a company that has a
diamond tradition of  over 100 years."

"Today marks the completion of our metamorphosis,"
continued McCullough. "We have changed all aspects of the
company in the last several months. We have a new
assortment of higher quality merchandise designed to
provide better values to our customers. We have relocated
our headquarters to Austin, Texas, to be more responsive to
our customers and operate much more efficiently. We have
recently unveiled our new store design that presents a more
open, friendly and inviting environment for our customers.
Today we have the capital structure which we believe will
allow us to continue to improve on these objectives and  
expand with the tremendous tradition of Samuels Jewelers."

Samuels Jewelers Inc. sells fine jewelry and watches in 116
stores in 19 states under the trade names Samuels,
Schubach, Mission, A. Hirsh & Son and Hatfield  
Jewelers.


BRADLEES: Disclosure Statement Approved
---------------------------------------
The Bankruptcy Court signed an order on October 5, 1998
approving Bradlees' Amended Disclosure Statement setting in
motion the process for Bradlees' creditors to vote on the
Plan of  Reorganization (POR). The confirmation hearing
date is presently set for November 18, 1998 and the Company
plans to emerge from Chapter 11 by fiscal year end, January
1999.

The POR provides distributions to creditors of
approximately $165 million including: approximately $16
million of administrative claims payments; a $14  
million cash payment to creditors; a $40 million note
primarily payable to the  Company's pre-Chapter 11 bank
group; and New Bradlees' Common Stock with an  estimated
value of $85 million. As anticipated, and previously
reported, all  existing stock will be canceled upon the
Company's emergence from bankruptcy.

Vendors who support Bradlees after emergence, with standard
trade terms, will receive a second lien on the Company's
inventory. The POR also provides that all potential
preference actions against Bradlees' vendors will be waived
when the POR is confirmed.

"We delivered a significantly improved operating
performance for the first half of 1998 and we are eager to
emerge from Chapter 11 by our fiscal year end.
We  believe that Bradlees has accomplished all it can with
the protection of Chapter 11. Our current merchandising and
marketing strategies, which have resulted in comparable
store sales improvements of 7% for the first seven  
months of this current fiscal year, have provided the
Company with a firm foundation on which to grow in the
future", stated Peter Thorner, Chairman and Chief Executive
Officer of Bradlees.

Bradlees, with 103 stores in seven states along the
Northeast corridor, is one of the nation's largest regional
discount department store chains with total  
annual sales of $1.4 billion.


CAI WIRELESS: Shareholders Unhappy With Plan
--------------------------------------------
The Albany Times Union reported on October 2, 1998 that
shareholders were unhappy that the reorganization plan
gives them nothing, while secured lenders owed $52 million
are paid in full and bondholders get $16.4 million in cash,
$100 million in new notes and 100 percent of the shares  
of the reorganized company. Analysts estimate bondholders
ultimately will get 22 cents to 40 cents on the dollar for
their $308 million in claims against CAI.


CAJUN ELECTRIC: Ruling Upholds Payments
---------------------------------------
U.S. District Judge Frank Polozola has upheld a decision by
a bankruptcy court judge that may keep Cajun Electric Power
Cooperative ratepayers from receiving a refund for interest
payments ratepayers have financed.

Cajun Electric, a Baton-Rouge based electric company that
has been under bankruptcy protection since 1994 and serves
about 1 million Louisiana customers  through various
cooperatives, has generated between $60 million and
$70 million  in revenue for interest payments on its debt
even though the cooperative has  not been required to make
the interest payments since the bankruptcy case  started,
officials said.

The Louisiana Public Service Commission wanted the funds
generated for interest payments kept in a separate escrow
account so refunds could be offered to ratepayers once
Cajun emerges from bankruptcy, but U.S. Bankruptcy
Judge  Gerald Schiff of Opelousas blocked that plan.

Instead, the money will be kept in an "excess funds"
account, which will be targeted for distribution to Cajun's
creditors, including the federal Rural Utilities Service,
which Cajun owes more than $4 billion. Most of its debt is  
tied to its investment and former partial ownership of the
River Bend nuclear power plant near St. Francisville.

Rejecting claims by the Public Service Commission that the
money raised for interest costs belonged to ratepayers,
Polozola affirmed Schiff's decision Thursday.

The commission's attorney, Mike Fontham, said he will
recommend that Polozola's ruling be appealed to the U.S.
5th Circuit Court of Appeals.

Attorney John Sharp, who represents a committee comprised
of seven electric cooperatives that receive power from
Cajun, said he was "puzzled and disappointed for
ratepayers."

Sharp said the court will eventually decide whether Cajun
should have been allowed to charge for interest costs in
its rates. If the court decides those charges were not
appropriate, no money may be left for refunds under
Polozola's ruling, Sharp said.

A Public Service Commission attorney said in March after
Schiff ruled that he did not expect the average customer
would receive a large rate reduction if refunds are
eventually provided.

David Rubin, a Baton Rouge attorney who represents Cajun's
court-appointed  trustee, Ralph Mabey, applauded Polozola's
decision. He said it properly  prevented the Public Service
Commission from interfering in the jurisdiction of  the
bankruptcy court over revenue.

Rubin said both the companies competing for the opportunity
to acquire Cajun's assets have said the interest funds
should be reserved for the Rural Utilities Service.

U.S. Department of Justice Attorney Brendan Collins, who
represents the Rural Utilities Service, had told Polozola
that allowing the member cooperatives to "jump in line
ahead of creditors" for the outstanding funds would have
been improper.

Collins said the case was not about reducing electric
rates. If the court allowed interest charges to be used for
such reductions, bankruptcy courts  would be flooded with
filings by electrical cooperatives, he said.
(Advocate Baton Rouge - 10/03/98)


CIAO CUCINA: Merger Deal is Off
-------------------------------
Barely four months after announcing a merger with a New
York restaurant operator to lift it out of financial
difficulty, Ciao Cucina Corp. abruptly terminated the deal
Friday.

The company said the action would not affect operations at
its five restaurants, and that it would continue to look
for merger or sale possibilities.

But it gave no hint about how to avoid the operating losses
that drove it to seek a buyer in the first place.

Officials at the Glazier Group, a turnaround expert brought
in to run Ciao early this year, could not be reached for
comment.

In May, Ciao officials announced the company would merge
with the Glazier Group, creating a company that would have
been 81 percent owned by current Glazier shareholders.
Glazier officials also signed a deal to manage Ciao until
the merger was completed.

Officials said then that the merged company planned a
secondary stock offering and new locations. They gave no
indication Friday about why the merger was terminated.

Ciao operates upscale Italian restaurants in Symmes
Township and at Seventh and Walnut streets downtown, along
with locations in Cleveland, Memphis, Tenn.,
and Washington, D.C.

After losing $3.5 million in 1997, Ciao closed two
restaurants this year and canceled plans to open three
others. (Cincinnati Post; 10/03/98)


CONCORD ENERGY: Unsecured Creditors Committee Appointed
-------------------------------------------------------
The United States Trustee, Richard W. Simmons, appointed
the following creditors of Knight Equipment & Manufacturing
Corporation to the Committee of Unsecured Creditors of
Concord Energy Incorporated and Knight Equipment &
Manufacturing Corp:

Coastal States Gas Transmission Company
ESCO Supply Company
H&S Constructors, Inc.
Rabalais I & E Constructors
Reed Engineering/natural Gas Liquids
Trism Specialized
United Home Services


CRIIMI MAE: Files Voluntary Bankruptcy Petition
-----------------------------------------------
CRIIMI MAE Inc. (NYSE: CMM) announced that is has filed for
protection from its creditors under Chapter 11 of the
United States Bankruptcy Code.  The filing was made in the
United States Bankruptcy Court for the District of
Maryland, Greenbelt, Maryland. Criimi Mae of Rockville,
Maryland, is a self-managed, full-service commercial
mortgage company. Its chairman says the recent turmoil in
the debt and equity markets sparked collateral calls from
its lenders.

William B. Dockser, the Chairman of the Company, said, "The
recent turmoil in the debt and equity markets has resulted
in collateral calls from our lenders. This has come at a
time when it is extremely difficult to raise additional  
capital as a result of the volatility in the financial
markets.  We will continue to pursue our core business
activities during the bankruptcy proceedings and we intend
to emerge from bankruptcy as a successfully reorganized
company." CRIIMI MAE Inc. is a self-managed, full-service  
commercial mortgage company involved in the acquisition,
origination, securitization and servicing of multifamily
and commercial mortgages and mortgage related assets
throughout the United States.  The company has offices  
in suburban Washington, D.C., Boston, Memphis, San
Francisco, Houston and Chicago.  (PR Newswire:WallStreet-
10/05/98)


CRIIMI MAE: Ratings Lowered
---------------------------
CRIIMI MAE Inc.'s (CMM) 'BB' rating on its $100 million
9.125% senior unsecured debt due 2002 is downgraded to 'D'
by Fitch IBCA.  The rating had been on RatingAlert with
negative implications where it was placed on Oct. 1, 1998,
pending a review of the company's liquidity position.  The
action reflects the company filing Chapter 11 and  
significant deterioration in value for the securities.

CMM's financial flexibility had been significantly weakened
in light of an unprecedented widening in spreads for
subordinated commercial mortgage-backed securities.  As a
result, secured lenders moved to enhance their protection,  
placing extreme pressure on the company. Repurchase
agreements are a principle source of funding for CMM and
these lenders have been increasing collateral  
requirements, or backing away entirely, while the market
value of CMM's portfolio has declined.

Although CMM had initiated plans to obtain new equity
capital, the illiquidity for many of CMM's core investments
combined with the significance of short term funding in its
capital structure, drove the company to seek protection
from creditors.

Fitch IBCA's commercial mortgage group is closely involved
and is assessing the  impact, if any, on CMM's special
servicer rating.  SOURCE  Fitch IBCA, Inc. (PR Newswire:
WallStreet-10/05/98)

Standard & Poor's today lowered its senior debt rating of
CRIIMI MAE Inc. to 'D' from single-'B'-plus.  
Approximately $100 million of debt is affected. In
addition, S&P revised its single-'B'-plus long-term
counterparty rating on the company to 'not meaningful'. The
outlook is also revised to 'N.M.' from negative.

The downgrade of the Rockville, Md.-based REIT reflects its
announcement today that it had filed a petition for
reorganization under Chapter 11 of the U.S. Bankruptcy
Code. The filing was prompted by the company's inability to
meet  collateral calls by its lenders after sharp declines
in the value of the REIT's  holdings of subordinated
commercial mortgage-backed securities. As a result, the
company most likely will not be able to meet its
contractual payment  obligations on its rated debt,
Standard & Poor's said --CreditWire Copyright  1998,
Standard & Poor's Rating Services


EAGLE PICHER: Eagle-Picher reports losses
-----------------------------------------
Eagle-Picher Industries Inc., which emerged from bankruptcy
in 1996 and earlier this year was purchased, reported
financial results Friday for the quarter and six-month
period ended Aug. 31. Because of its acquisition in  
February by Granaria Industries B.V. of the Netherlands,
results after Feb. 24 are not comparable to those before
that date. For the quarter ended Aug. 31, the Cincinnati-
based company reported a net loss of $3.8 million on net
sales of $206.4 million vs. a year-ago net loss of $1.1
million on net sales of $216.8 million. For the six months
ended Aug. 31, the company said it lost $13.1 million on
net sales of $426.3 million.


ELDER BEERMAN: Elder-Beerman shares tumble
------------------------------------------
Shares of Elder-Beerman Stores Corp. plummeted more than 30
percent Friday, falling $5.25 to $11.37 1/2 after the
company said it disagreed with some analysts' expectations
for third- and fourth-quarter earnings. More than 6.7  
million shares traded hands, far more than the normal daily
volume. The department-store operator, which emerged from
Chapter 11 bankruptcy late last year, said third-quarter
earnings per share would be about 21 cents per share,  with
the fourth-quarter levels at about $1 per share. Analysts
had predicted  earnings of about 40 cents per share in the
third quarter and 84 cents in the  fourth quarter. Elder-
Beerman said it was "comfortable" with estimates of  
between $1.30 and $1.35 per share for the fiscal year. The
company said the  heaviest contributions from recently
acquired Stone & Thomas stores probably  will come in the
fourth quarter.


FPA MEDICAL: Files Plan and Disclosure Statement
------------------------------------------------
FPA Medical Management, Inc. (OTC Bulletin Board:
FPAMQ) announced that it filed its Disclosure Statement and
Plan of Reorganization with the Bankruptcy Court in
Wilmington, Delaware on September 30, 1998.  The scheduled
filing, which was first announced in July 1998, was  
required by the terms of FPA's debtor-in-possession (DIP)
financing agreement  and the Bankruptcy Court's scheduling
order entered following the commencement  of the Chapter 11
cases of FPA and various of its affiliates and subsidiaries  
on July 19, 1998 and closely follows the prenegotiated term
sheet that FPA  filed with its first day petitions.
Following approval of the Disclosure Statement by the
Bankruptcy Court, FPA will commence the solicitation of
votes of its creditors for the approval of its Plan of
Reorganization.

In both its Disclosure Statement and the related hearing
notice mailed to FPA's creditors and other interested
persons and entities, FPA also disclosed that The Official
Committee of Unsecured Creditors, appointed on August 3,
1998 in FPA's jointly administered Chapter 11 cases, had
informed the Company that the Committee does not support
the Plan as proposed and that negotiations are continuing
among the Company, the Prepetition and DIP Bank Groups and
the  Creditors' Committee in advance of the Bankruptcy
Court hearing scheduled for October 28, 1998 on the
adequacy of the Disclosure Statement.

"The Company has worked diligently to keep its
reorganization process on a fast- track schedule to be
successfully completed at the earliest opportunity. We  
were fortunate to have reached agreement with our senior
creditors as we began our reorganization and appreciate
their continued support as we move through this process,"
said Stephen J. Dresnick, M.D., FACEP, chairman and
chief  executive officer of FPA. "We are cautiously
optimistic that the discussions with our unsecured
creditors, which are continuing this week,
will result in a  consensual plan supported by our lenders,
unsecured creditors and payors."

Terms of the filed plan provide for the cancellation of
existing equity holder interests; warrants to be
distributed to general unsecured creditors,
including  holders of the Company's 6.5% Subordinated
Debentures due 2001; and a conversion of all or
substantially all of FPA's prepetition secured debt to  
equity.  The Disclosure Statement and Plan of
Reorganization will be filed with the Securities and
Exchange Commission.

The Company also announced that its notice and claims agent
was mailing notice of the November 17, 1998 general claims
bar date established by the Bankruptcy Court together with
proof of claim forms to more than 50,000 creditors, equity  
holders and other interested persons and entities.  
FPA Medical Management, Inc. and various of its affiliates
and subsidiaries filed petitions under Chapter 11 in the
U.S. Bankruptcy Court for the District of Delaware in  
Wilmington on July 19, 1998 and various dates
thereafter through August 7, 1998.

FPA Medical Management, Inc. is a national physician
practice management organization that organizes and manages
primary care physician networks to contract with HMOs and
other prepaid insurance plans to provide physician and  
related health care services and provides contract
management support services to hospital emergency
departments.


FRETTER: Modified Global Settlement Wins Approval
-------------------------------------------------
On October 5, 1998, the court approved a modified global
settlement between Fretter, subsidiary Dixons U.S. Holdings
Inc. and its affiliates, and others, waiving the minimum
sum to be paid out to Fretter's unsecured creditors and
essentially bringing closure to the contentious case.  
Distributions to creditors under Fretter's liquidating plan
were contingent on approval of the global settlement,
however, precisely how much they will recover remains to be
seen.  One of the conditions of the settlement was a
guarantee to unsecured creditors that their recovery not be
less than 45 cents on the dollar.  That minimum was waived
altogether in the modified global settlement.  Current
estimates for recovery for unsecured creditors hover
between 40 cents and 45 cents. (Federal Filings Inc. 06-
Oct-98)


HEARTLAND WIRELESS: Reaches Agreement With Note Holders
-------------------------------------------------------
Heartland Wireless Communications, Inc. (Nasdaq/NMS:HART),
America's largest wireless cable company, today announced
that it has reached an agreement with the holders
of a majority in principal amount of Heartland's $ 115
million 13% senior notes due 2003 and $ 125
million 14% senior notes due 2004 (together, the "Senior
Notes") to support a "pre-negotiated" plan
of reorganization.

The Plan, if consummated, will allow Heartland to convert
the Senior Notes and Heartland's 9% convertible
subordinated discount notes due 2004 (into new shares of
Heartland common stock. The aggregate amount of debt to be
converted into common stock under the Plan is expected to
total $ 323 million, comprised of $ 240 million in
principal amount of the Senior Notes and $ 26 million of
accrued interest, plus $ 57 million in accreted amount of
the Subordinated Notes. Heartland intends to implement the
Plan by filing a voluntary petition under Chapter 11 of the
U.S. Bankruptcy Code and formally soliciting consents of
the holders of the Senior Notes, Subordinated Notes and
certain other impaired claims. Heartland intends to file
the Plan with a U.S. Bankruptcy Court on or before November
13, 1998.

Under the Plan, the reorganized Heartland will emerge with
no long-term debt except for approximately $ 15 million of
installment notes payable to the Federal Communications
Commission ("FCC") for the company's "basic trading areas"
or "BTAs," and certain capital lease obligations.

In exchange for cancellation of the Senior Notes, holders
of the Senior Notes will receive 97% of the issued and
outstanding common stock of the reorganized Heartland.
Holders of the Subordinated Notes, existing common stock
and certain litigation claims (collectively, the "Junior
Claimants") will receive the remaining 3% of the common
stock of the reorganized Heartland, as well as warrants
("Warrants") to purchase 10% of the common stock of the
reorganized Heartland on a fully diluted basis
(collectively, the "Junior Claimants' Pool"). The exact
allocation of the Junior Claimants' Pool to each class of
Junior Claimants has not yet been approved by the company's
board of directors.

Under the Plan, the Warrants will have a term of eight and
one-half years and an exercise price based on the total
principal amount of Senior Notes and accrued interest
outstanding on the date the Company files its Chapter 11
petition.

The Plan will provide for continued payment of trade
creditors in the ordinary course of business, including all
vendors, programmers, landlords, the FCC, and all ITFS and
MMDS channel license holders that lease excess spectrum
capacity to Heartland. Additionally, the Plan will provide
for uninterrupted payment of all material employee wages
and benefits.

Under the Plan, the company's new board of directors will
consist of seven members, all of whom will be selected by
the holders of the Senior Notes, except that one director
will be a member of the company's management. The Plan
contemplates that the company will implement compensation
and incentive plans to align the interests of management
and key employees with the owners of the reorganized
Heartland.

Although the holders of a majority in principal amount of
the Senior Notes have agreed to support the Plan,
consummation of the Plan is subject to receipt of
additional requisite votes accepting the Plan following its
filing with the Bankruptcy Court, and confirmation of the
Plan by the Bankruptcy Court. There is no guarantee that
the requisite acceptances or confirmation will be obtained.


NEWMONT GOLD: Sued Over Buyout
------------------------------
Newmont Gold Co., the world's second-largest gold producer,
was sued by two shareholders who say they won't get enough
for their stock in a $281 million buyout by majority
stockholder Newmont Mining Corp.

Newmont Mining, Newmont Gold's parent, said earlier this
week it would buy the 6.25 percent of Newmont Gold it
doesn't already own for about $281 million in new stock.

The company would issue 1.025 shares for each Newmont Gold
share, an offer that would value Newmont Gold at about
$27.03 per share.

In one of two suits filed in Delaware Chancery Court in
Wilmington, Newmont Gold stockholder Joseph Leone claims
Newmont Mining's offer "is grossly inadequate" because it
doesn't reflect the unit's true value.

And Leone contends that officers of Newmont Mining are
using their control of Newmont Gold "to force
(stockholders) to exchange their equity interest in  
Newmont Gold for inadequate consideration."

Both companies are based in Denver. Newmont Mining locates
and processes gold ore in the United States, with joint
ventures in Mexico, Indonesia, Peru and Uzbekistan.

Its Newmont Gold unit stands second only to AngloGold Ltd.
of South Africa in producing the precious metal.  (Gazette-
10/05/98)

  
ONCOR: Considers Bankruptcy
---------------------------
Oncor Inc., a Gaithersburg, Md., biotechnology company, has
announced that it is considering a bankruptcy filing
because of its financial situation, according to The
Washington Business Journal. The company disclosed on Sept.
30 that Perseus Capital LLC, a venture capital firm, has
withdrawn its offer to buy Oncor's subsidiary, Codon
Inc., and that it would shut down Codon. Because of
Perseus's withdrawal, one Oncor creditor has demanded
payment of a $4 million secured note, but Oncor does not
have the money to pay. It is cutting jobs and laying off
employees, as well as cutting back on external research and
marketing efforts. Oncor, which makes gene-based tests for
the management and detection of cancer, posted a loss of
$14.8 million for the six months ended June 30. (ABI 05-
Oct-98)


PARAGON TRADE: Eyes Fourth Exclusivity Extension To Dec. 18
-----------------------------------------------------------
Asserting that "substantial progress" has been made in
settlement talks with patent infringement adversaries
Kimberly-Clark Corp. and Procter & Gamble Co., Paragon is
seeking a 60-day extension of its exclusive periods to file
a reorganization plan and solicit plan acceptances to Dec.
18 and Feb. 18, respectively.  The court previously
extended the diaper maker's exclusive periods to Oct. 19
and Dec. 18, respectively, over P&G's objection.  
Immediately after Paragon's last extension, the company
engaged in further settlement talks with Kimberly-Clark.  
Paragon said it expects to continue talks with Kimberly-
Clark while commencing additional negotiations with P&G in
the coming weeks.  Meanwhile, P&G notified the court of new
patent infringement allegations against Paragon. (Federal
Filings Inc. 06-Oct-98)


PASSPORT DESIGNS: Coda Music Announces Software Devlopment
----------------------------------------------------------
Coda Music Technology, Inc. (NASDAQ:COMT) announced today
that its Finale(R) product, the world's best selling music
notation software for Macintosh(R) and Windows(R)
computers, will soon be able to import files created by
Encore(tm) and Rhapsody(tm), two competing notation
products from Passport Designs, Inc. These files will also
be able to be imported into Finale Allegro(R), Coda's less
expensive notation product. Earlier this year,
Passport's filing for protection under Bankruptcy Chapter 7
caused tens of thousands of its notation customers to worry
if they would ever be able to purchase an upgrade to their
aging Passport products. While Passport's assets were
purchased out of bankruptcy, there has been no public
announcement of a date for the release of upgrades for
either of Passport's former products.

With the addition of the Encore and Rhapsody import
feature, Finale is the logical upgrade alternative for
former Passport customers. The combination of the file
import feature, a special pricing offer and the lack
of any clear information regarding upgrades to Passport's
former products is likely to encourage Encore and Rhapsody
users that this is the time to upgrade to Finale. "Finale
is the best possible upgrade Encore and Rhapsody users
could ever hope for" stated Ron Raup, Coda President and
COO. "And with the new file import capability, none of
their past work will be lost as they step up to a
professional product that is the world standard in music
notation technology." Coda Music Technology, Inc. develops
and markets proprietary music technology products,
including Finale music notation software products and the
SmartMusic Intelligent Accompaniment products.
  

PINNACLE MICRO: Involuntary Petition Dismissed
----------------------------------------------
Pinnacle Micro, Inc. (OTC Bulletin Board: PNCL) today
announced that the involuntary bankruptcy petition filed on  
August 17, 1998 against Pinnacle Micro has now been
dismissed by the United  States Bankruptcy Court for the
Central District of California.  Pinnacle Micro,
represented by Robert E. Opera and Evan C. Borges of the
Irvine,  California law firm of Lobel & Opera, vigorously
opposed the involuntary  bankruptcy petition.  Based upon
Pinnacle Micro's opposition,
the three  petitioning creditors who filed the involuntary
bankruptcy petition against  Pinnacle Micro agreed to
dismiss the involuntary bankruptcy petition and  instead to
support Pinnacle Micro's out-of-court plan for the payment
of  Pinnacle Micro's creditors.  In obtaining a dismissal
of the involuntary bankruptcy petition and other
concessions from the petitioning creditors, Pinnacle made
no payments to the petitioning creditors, provided no
financial  inducements to the petitioning creditors, nor
provided any other consideration  to the petitioning
creditors, except only for Pinnacle's agreement not to  
pursue against the petitioning creditors any claim under
the U.S. Bankruptcy Code to recover Pinnacle Micro's fees
or damages as a consequence of the involuntary bankruptcy
petition.

Pinnacle Micro produces optical storage technology and
recordable CD storage systems for general data storage and
data intensive applications such as network storage,
imaging, desktop publishing and prepress, as well as
emerging applications such as digital audio/video editing
and commercial multimedia.  Founded in 1987, Pinnacle
Micro, Inc. is headquartered in Irvine, California  
USA.  William F. Blum serves as Pinnacle Micro's president.  
Henry C. Montgomery and his firm, Montgomery Financial
Services Corporation, are providing turnaround management
and financial management and consulting services to
Pinnacle Micro. Information concerning Pinnacle Micro can
be located on the internet at www.pinnaclemicro.com.  
SOURCE  Pinnacle Micro, Inc.


SCOTT CABLE: Files Prepackaged Liquidating Plan
-----------------------------------------------
Scott Cable filed a prepackaged liquidating reorganization
plan and disclosure statement last week in Connecticut.
The company reached an agreement in July to sell
substantially all its assets to Denver-based InterLink
Communications Partners LLP, an affiliate of Rifkin &
Associates Inc., for $165 million, subject to closing
adjustments.  The purchase agreement provides for the
transaction's consummation through a prepackaged
bankruptcy.  The sale is expected to close during the
fourth quarter, subject to court approval.  (Federal
Filings Inc. 06-Oct-98)


SOUTHERN PACIFIC: Case Summary & 20 Largest Creditors
-----------------------------------------------------
Debtor:  Southern Pacific Funding Corporation
         4949 Meadows Road, Suite 600
         Lake Oswego, OR 97035

Type of business: The origination, purchasing and selling
of non-conforming mortgage loans secured primarily by one
to four family residences.

Court: District of Oregon

Filed: 10/01/98    Chapter: 11

Debtor's Counsel: John Casey Mills
                  Miller, Nash, Wiener, Hager & Carlsen LLP
                  111 S.W. 5th Avenue
                  Portland, Oregon
                  (503) 224-5858

Total Assets:              $1,172,463,000
Total Liabilities:         $1,024,294,000

No. of shares of common stock         20,750,300  

20 Largest Unsecured Creditors:

   Name                              Nature         Amount
   ----                              ------         ------
Bank of New York                 Debentures     100,000,000
Bank of New York                 Debentures      75,000,000
Tricor                           Trade Debt          34,547
Hacienda Property Valuation      Trade Debt          27,925
Garrin and Facendo Assoc.        Trade Debt          20,325
The Barbour Group                Trade Debt          19,448
Norrell                          Trade Debt          17,281
UPS                              Trade Debt          14,536
Liberty Staffing                 Trade Debt          14,437
United Van Lines                 Trade Debt          14,093
Federal Express                  Trade Debt          11,671
First American Credco.           Trade Debt           9,239
Gateway 2000                     Trade Debt           7,186
Accountants Plus                 Trade Debt           6,561
Steven Grouley, Attorney         Trade Debt           5,976
Firstsearch Employment LLC       Trade Debt           5,821
TMP Worldwide                    Trade Debt           5,579
Jack Nadel, Inc.                 Trade Debt           4,742
Staffmark Temp Technology        Trade Debt           4,172
E2 Prints                        Trade Debt           3,039


SOUTHERN PACIFIC: Developing Plan For Liquidation
-------------------------------------------------
Southern Pacific Funding Corporation announced today that
it is working to develop a plan for orderly liquidation of
its assets through its Chapter 11 bankruptcy case  
commenced on Oct. 1, 1998.

Following a court hearing on Thursday, Greenwich Capital
Markets, Inc., declined to advance funds pursuant to the
post-petition credit facility previously negotiated with
the Company because court approval was not received as to
certain financing terms. Accordingly, Southern Pacific
Funding has notified its brokers that funding of mortgage
loans has been halted permanently and is taking steps to
maximize the value of its assets for the benefit of its  
creditors.

Separately, the New York Stock Exchange suspended trading
in Southern Pacific Funding's common stock and 6.75%
convertible notes due Oct. 15, 2006 (NYSE:SFC  
and SFC 06) prior to the market opening on Friday. The NYSE
intends to apply to  the Securities and Exchange Commission
to delist the issues.


TAL WIRELESS: Debtor Seeks Compromise of Controversy
----------------------------------------------------
The debtor, TAL Wireless Networks, Inc., the debtor is
seeking to compromise the controversy with First For
Finance Pty. Ltd. ("FFF") and Sequitor Investment & Finance
Ltd.

As part of the compromise, FFF agrees to receive $3
million, a substantial compromise, according to the debtor
for the lien of FFF in an amount in excess of $4 million.
A hearing will be held on October 20, 1998.


UNISON HEALTHCARE: Order Extends Exclusivity
--------------------------------------------
The court entered an order on September 23, 1998 granting
the debtor, Unison Healthcare Corporation, the exclusive
right to solicit acceptances of, and obtain confirmation of
the joint plan of reorganization, dated August 10, 1998, up
to and including the close of business on November 2, 1998.


UNISON HEALTHCARE: Revises Financials
-------------------------------------
Unison Healthcare revised the projected results of
operations included  in the disclosure statement, due
primarily to:  (i) revised estimates of the  impact on the
Company's revenues as a result of the Medicare prospective  
payment system ("PPS") and (ii) reductions in projected
occupancy levels based  on the Company's current levels.
The Company's Board of Directors recently  elected three
new directors to fill vacancies on the Board of Directors.  
They are:  Jock Patton, a private investor and consultant;
Donald D.  Finney, Chief Executive Officer of
HCMF Corporation; and James A.  Brown, a private consultant
specializing in mergers and acquisitions.


ZENITH: May Close Color Picture Tube Plant
------------------------------------------
Zenith Electronics Corporation announced tentative plans to
close its Melrose Park, Ill., color picture tube  
plant in December.  The plant employs about 2,000 people.

The company said its tentative decision is consistent with
its restructuring plan announced earlier this year, which
disclosed plans to sell or close the  plant by the end of
1998 unless operations improved considerably. The color  
picture tube market continues to erode, prices
continue to drop and the plant  has not achieved
profitability, even with the improvements made there, the  
company said.

Zenith management has offered the unions an opportunity to
enter into "decision bargaining" to discuss possible
alternatives to closing the plant. Zenith also
confirmed that it is still in discussions with another
company about the possibility of continued operation of the
plant.

Because the outcome of those ongoing discussions is
uncertain, Zenith today issued legally required 60-day
notices under the Worker Adjustment and Retraining
Notification (WARN) Act to union officials, government
agencies and Melrose Park salaried employees about the
possibility of the plant closure in December 1998.

On May 21, Zenith announced it is pursuing a comprehensive
restructuring plan designed to reduce its debt, enhance its
competitiveness, de-emphasize manufacturing and position
Zenith as a technology and marketing company.  In  
conjunction with its operational restructuring, Zenith is
planning to restructure its debt through a pre-packaged
plan of reorganization.  Zenith filed with the Securities
and Exchange Commission a registration statement on  
Form S-4, which sets forth the proposed terms of the plan,
on Aug. 10.

                   *********
     
The Meetings, Conferences and Seminars column appears in
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conferences@bankrupt.com are encouraged.  

Bond pricing, appearing each Friday, is supplied by DLS
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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.,
Princeton, NJ, and Beard Group, Inc., Washington, DC.  
Debra Brennan and Lexy Mueller, Editors.   

Copyright 1998.  All rights reserved.  ISSN 1520-9474.  
This material is copyrighted and any commercial use, resale
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