TCR_Public/981016.MBX T R O U B L E D   C O M P A N Y   R E P O R T E R
   Friday, October 16, 1998, Vol. 2, No. 203


AIRSTAR TECHNOLOGIES: Files For Chapter 11 Protection
ALLIANCE ENTERTAINMENT: Concord Records' Hearing
ASPEN MOUNTAIN AIR: Halts Some Operations
ATLAS: Conolog Acquires Assets of Atlas Design
BOSTON CHICKEN: Agreement With Morgan Stanley Terminated

BOSTON CHICKEN: Hearing On Final DIP Approval October 26
BOSTON CHICKEN: PwCoopers Replaces Arthur Andersen
BOSTON CHICKEN: Seeks To Pay Prepetition Trade Vendors

CROWN BOOKS: Seeks To Reject Leases
FPA MEDICAL: Publishes General Claims Bar Date
HAYES CORP: Announces New Modems Right After Filing
HAYES CORP: Dismisses Suits
KENAR: Seeks "Stay-Put" Agreements

KIA MOTORS: Kia and Hanwha Asset Sales Fail  
LIBERTY HOUSE: Exceeds EBITDA Goals, Sales Lag
LONG JOHN SILVER'S: Taps Special Real Estate Consultants
MC LIQUIDATING: Order Confirming Plan Filed With SEC
OXFORD HEALTH: Agrees To Sell Pa. Operations For $10.4M

PERK DEVELOPMENT: Seeks To Reject Four Leases
PITTSBURGH PENGUINS: Mayor Seeks Investigation of Co-owners
PRECISION AUTO: 4th Quarter-Restated 3rd Quarter Results
R&S/STRAUSS: Seeks Court Approval To Close 17 Stores
RAYTECH CORP: Tentative Settlement With Creditors & Equity

RIVER OAKS: Reaches Agreement With Lender
SOUTHEAST BANKING: Suspension of $100M to Creditors
STRATOSHPHERE: Reorganization Becomes Effective
SUN TV: Committee Taps Ernst & Young Accountants
SUN TV: Committee Taps Otterbourg, Steindler - Attorneys

TEARDROP GOLF: Assignment of Agreement with Couples
UNISON HEALTHCARE: Applies For Appointment of Examiner
DLS CAPITAL PARTNERS: Bond Pricing for Week of October 12


AIRSTAR TECHNOLOGIES: Files For Chapter 11 Protection
Airstar Technologies (OTCBB:ASTG) announced that it has
filed a voluntary petition in the U.S. Bankruptcy Court for
the Central District of California  for protection and
reorganization under Chapter 11 of the U.S. Bankruptcy

The company's wholly-owned subsidiary, Select Switch
Systems Inc., filed for Chapter 11 protection at the same
time. The filing was made to facilitate the restructuring
of its operations and financing arrangements. A company  
spokesperson said that it remains to be seen what effect,
if any, this will have on Select Switch's contractual
relationship with Sprint.

The company has asked the NASD to suspend trading in its
stock for one day so that the news can be properly

ALLIANCE ENTERTAINMENT: Concord Records' Hearing
The hearing on the Disclosure Statement of Concord Records,
Inc., one of the debtors in the above referenced case will
be held on November 4, 1998 at 10:00 am at the United
States Bankruptcy Court, Alexander Hamilton United States
Custom House, One Bowling Green New York, NY 10004-1408.

Objections and responses to the Disclosure Statement, if
any, must be received by October 28, 1998.

ASPEN MOUNTAIN AIR: Halts Some Operations
Aspen Mountain Air, which is in Chapter 11 bankruptcy,
halted many of its flight operations Friday, including  
service between Denver International Airport and both Aspen
and Bozeman, Mont.  Executives for the carrier said they
would be returning all four of the airline's leased 30-seat
Dornier turboprops to the manufacturer, Fairchild Dornier.
Aspen Mountain Air's service between Dallas and Aspen also
was halted.  The commuter carrier has had joint-ticketing
code-share relationships with both  Frontier and American
airlines. A spokeswoman for Frontier said passengers who
bought tickets on her airline that included a code-share
leg on Aspen Mountain  Air should call Frontier's
reservations line to seek re-accommodation. Aspen Mountain
Air Chief Executive Officer Ron Stone said his carrier is
working with a new investor group that might inject
capital in the venture and help resume  service from DIA
and Dallas using another type of airplane. (The Denver Post

ATLAS: Conolog Acquires Assets of Atlas Design
Conolog Corp. reports to the SEC on October 14, 1998 that
the company purchased all of the assets of Atlas Design,
Inc., a provider of short and long term qualified
engineering and technical staff to leading companies as
well as human resource consulting.  The assets include
furniture, fixtures, records, resumes, corporate files,
software, computers, contracts, billing rights to  
contracts in progress, trade names, licenses, goodwill, and
subsidiary. The assets were acquired from Robert P.  
Gibbons, Trustee of the bankruptcy estate of Atlas Design,
Inc.  This acquisition is part of the Company's
expansion  plans through mergers and acquisitions and will
allow the Company to provide the engineers and software
designers to support the Company's obligations under  its
longer term contracts.  The total acquisition cost of
$145,000,000 was paid for with proceeds from the company's
January 1998 offering of 700,000 Units, each Unit
consisting of one share of Common Stock and four Redeemable
Class A Common Stock Purchase Warrants. (Copyright States
News Service, 10/14/98)

BOSTON CHICKEN: Agreement With Morgan Stanley Terminated
In a Form 8-K filed with the Securities and Exchange
Commission, Einstein/Noah Bagel Corp. reports that Boston
Chicken has terminated its engagement of Morgan Stanley &
Co., Incorporated to find a buyer for Boston
Chicken's majority equity interest. (Boston Chicken
Bankruptcy News Issue 2; Bankruptcy Creditors' Service 10-

BOSTON CHICKEN: Hearing On Final DIP Approval October 26
To provide the Debtors with an on-going source of working
capital financing during the chapter 11 proceedings, the
Debtors solicited proposals from Norwest Bank, Chase
Manhattan, and Foothill Capital for DIP lending
facilities in the weeks prior to the Petition Date.  Those
negotiations ended when General Electric Capital
Corporation and Bank of America agreed to extend
$70,000,000 of post-petition credit on competitive and
favorable terms.  Moreover, a DIP Facility underwritten by
these pre-petition lenders avoids protracted and contested
hearings over priming liens and collateral valuation.  

The proceeds of the DIP Facility will be used initially to
roll-up the Debtors' $35,000,000 obligations under the 1998
Liquidity Facility.  Further borrowings will be made as
necessary to provide additional liquidity in the
event there are any material deviations from the Debtors'
operating budget.

Evan Flaschen, Esq., of Hebb & Gitlin, took the opportunity
to indicate that the pre-petition Ad Hoc Committee is
highly supportive of the Debtors, their management, and
their professionals.  While the members of the Ad Hoc
Committee have no particular objection to the Interim
relief requested, Mr. Flaschen wanted to clarify that no
party-in-interest's rights

By this Motion, the Debtors have sought and obtained
authority to borrow up to $41,900,000 on an interim basis
under the DIP Facility, of which $35,000,000 will be drawn
immediately to pay-off the Debtors' obligations
under the 1998 Liquidity Facility.

Judge Case directed that the Court will hold a hearing on
October 26, 1998, to consider entry of an order granting
final approval of the DIP Facility. (Boston Chicken
Bankruptcy News Issue 2; Bankruptcy Creditors' Service 10-

BOSTON CHICKEN: PwCoopers Replaces Arthur Andersen
On October 2, 1998, Boston Chicken's Board of Directors
approved the engagement of PricewaterhouseCoopers LLP as
principal accountant to audit the Company's consolidated
financial statements.  The same day, Arthur Andersen
LLP was dismissed, by the Company's Board of Directors and
the Company's audit committee, as the Company's principal
accountant and as principal accountant for the Company's
subsidiaries other than Einstein/Noah Bagel
Corp. (which is expected to make its own decision).

Arthur Andersen LLP's reissued report on the Company's
consolidated financial statements for the fiscal year ended
December 28, 1997 includes a qualification which states
there is substantial doubt about the Company's
ability to continue as a going concern.

Boston Chicken and Arthur Andersen state that there have
been no disagreements between management and Arthur
Andersen LLP during the Company's two most recent fiscal
years and any subsequent interim period preceding the
engagement of PricewaterhouseCoopers LLP on any matter of
accounting principles or practices, financial statement
disclosure, or auditing scope or procedure of a nature
which if not resolved to the satisfaction of Arthur
Andersen LLP would have caused it to make reference in
connection with its report to the subject matter of the
disagreements. (Boston Chicken Bankruptcy News Issue 2;
Bankruptcy Creditors' Service 10-14-98)

BOSTON CHICKEN: Seeks To Pay Prepetition Trade Vendors
The Debtors have sought and obtained the Court's authority
to pay, in the ordinary course of business, all pre-
petition claims held by approximately 10,000 trade vendors,
aggregating approximately $13,000,000, on the condition
that a trade vendor continue to extend credit during the
chapter 11 process on ordinary credit terms.  

"If you don't take care of your vendors," Mr. Jenkins said,
"you won't make it," stressing the importance of the relief
requested by this Motion.  If Boston Chicken were to lose
the support of vendors, the Company would collapse, Mr.
Jenkins predicts.

Mr. Jenkins explained that Marriott Distribution -- owed
approximately $7,000,000 at the time of filing -- handles
nearly 100% of all products delivered to the stores, acting
as a conduit for purchases from Tyson, Coca-Cola and
thousands of other suppliers.  "It would be impossible,"
Mr. Jenkins is convinced, to replace vendors like Tyson or
Coca-Cola.  And, if local service providers are not paid,
it would be nearly impossible to establish new
relationships to support the Debtors' on-going operations.

Mr. Stroube indicated that the Debtors will view this
constituency as a convenience class under a plan of

Mr. Jenkins confirmed for Judge Case that he believes most
trade creditors will continue to extend post-petition
credit to the Debtors.  With respect to smaller creditors
who do not, Mr. Jenkins believes that they can be replaced.

Mr. Stroube confirmed that Marriott has agreed to extend
credit post-petition if paid the balance of its pre-
petition claim.  Moreover, Mr. Stroube indicated, Marriott
is party to a contract which the Debtors would seek to
enforce if Marriott contracted credit terms post-petition.  

Richard L. Wasserman, Esq., of Baltimore-based Venable,
Baetjer and Howard, LLP, representing Marriott, indicated
that Marriott and the Debtors are engaged in conversation
about whether, post-petition, Marriott will extend 7
or 30 day terms to the Debtors under the terms of their
Fixed Fee Distribution Agreement.  Mr. Wasserman noted that
Marriott delivers approximately $1,000,000 per day to
Boston Chicken's stores.

Judge Case Granted the Debtors' Motion subject to a
$15,000,000 cap in the aggregate.  Judge Case made it clear
that his intention is to keep the Debtors' ship afloat,
maintain the status quo to the extent possible, and not
prejudice any party's rights to revisit the propriety of
this first day relief.  Judge Case opined, given that trade
creditors' claims rank pari passu with the Bondholders'
claims and the absence of any objection by the Ad
Hoc Committee, the relief requested appears appropriate.
(Boston Chicken Bankruptcy News Issue 2; Bankruptcy
Creditors' Service 10-14-98)

On October 14, 1998, NRG Energy, Inc. (NRG), the
owner of 45 percent of the stock of Cogeneration
Corporation of America (Cogeneration), made the following
statement with respect to its current proxy and consent
solicitation seeking removal of Robert Sherman as a

NRG is seeking the ability to allow a majority of
Cogeneration shareholders to decide who should be on
Cogeneration's board of directors. NRG does not  
understand why Mr. Sherman and the Independent Committee
would expend company funds to frustrate an attempt to
convene a meeting of Cogeneration's shareholders and to
prevent the votes of the majority of Cogeneration's  
shareholders from determining whether Mr. Sherman should
continue as a director.

Mr. Sherman and the Independent Committee have not asked
for or received authorization from the Board of
Cogeneration for the use of corporate funds to  
resist NRG's proxy or to initiate lawsuits to prevent the
shareholders from taking action. The management and certain
directors of Cogeneration who collectively hold less than
1/2 of 1 percent of Cogeneration shares are resisting the
will of the shareholders.

NRG expects that the recently filed lawsuit in New Jersey
is just the first of many lawsuits which Mr. Sherman and
the Independent Committee will file in order to interfere
with the ability of the Cogeneration shareholders to  
meaningfully participate in the governance of Cogeneration.

While Mr. Sherman and the Independent Committee claim their
concern is for the welfare of the Cogeneration shareholder,
it is clear that their true motivation is to entrench Mr.
Sherman. Members of the Independent Committee indicated
they  would support Mr. Sherman's removal only if he is
provided compensation far in  excess of his employment
contract to the detriment of Cogeneration's shareholders.

Last week NRG received a letter from Mr. Sherman's attorney
recounting a discussion between Mr. Sherman and a member of
the Independent Committee. In that letter the attorney
outlined the terms under which Mr. Sherman would depart,  
including the following: Preferential treatment for Mr.
Sherman's options, setting up a potential windfall for Mr.
Sherman. Putting Cogeneration up for sale in order to
ensure a profit on Mr. Sherman's options. In the absence of
such a profit, a guaranteed payment to Mr. Sherman of $1
million cash.

NRG put at risk over $100 million in connection with
acquiring its position in Cogeneration and bringing
Cogeneration out of bankruptcy. Mr. Sherman and
the  Independent Committee's charge of a conflict of
interest on NRG's part are without merit. The two companies
generally pursue projects of different scopes.  NRG's
motivation is to foster Cogeneration's growth and
profitability and, as the largest shareholder, NRG has the
most to lose if the recent stock price decline continues.

NRG is an independent power producer, specializing in the
development, construction, operation, maintenance and
ownership of power plants. Established in 1989, NRG is
involved in over 10,500 MW of projects throughout the
United States, Europe, the Pacific Rim and Latin America.

CRAGAR Industries, Inc. announced that it received
correspondence from Nasdaq after the close of the market on
October 14, 1998 indicating a decision by the Nasdaq
Listing Qualifications Panel to immediately delist the
Company's Common Stock and Warrants from the Nasdaq  
SmallCap Market.  Nasdaq has notified the Company that the
Common Stock and Warrants will become eligible for trading
on the OTC Bulletin Board.

This event followed a decision by the Nasdaq Listing
Qualifications Panel regarding the Company's appeal for an
exemption from the recently adopted requirements for
continued listing on the Nasdaq SmallCap Market.  The
Company was unable to obtain such an exemption because of
its failure to meet the net tangible asset/market
capitalization/net income requirements.

The Company's Common Stock and Warrants continue to be
listed on the Boston Stock Exchange under the symbols "CWH"
and "CWHW," respectively. There can be no assurance the
Company will continue to maintain compliance with the  
requirements for continued listing on the Boston Stock
Exchange with respect to the Common Stock and Warrants.

CRAGAR Industries, Inc. is an international designer,
producer, and seller of custom wheels and wheel accessories
for cars, trucks, vans, sport utility vehicles, racing
vehicles, and motorcycles.

CROWN BOOKS: Seeks To Reject Leases
Crown Books seeks court approval to reject leases covering
the premises located in Piedmont, California and Lynnwood,

FPA MEDICAL: Publishes General Claims Bar Date
FPA Medical Management, Inc., et al., published an order
and notice that November 17, 1998 is the general claims bar
date for all persons and entities with claims against any
of the more than 100 debtors in the case.

The effective rejection date is October 7, 1998.  The
debtors' believe that prompt rejection of the Closing Store
Leases represents the exercise of their reasonable business
judgment for several reasons.  The accrual of
administrative rent will be eliminated, the debtor and Keen
Realty have evaluated each of the Closing Store Leases and
concluded that there is no value to be obtained for the
estates by holding these leases, and going out of business
sales have been previously held.

HAYES CORP: Announces New Modems Right After Filing
Days after filing for bankruptcy protection, Hayes Corp.
has unveiled one of the new modems on which it is pinning
its hopes for a turnaround.

At a trade show in Massachusetts, the Norcross-based
company Tuesday introduced a device meant for use with
asymmetric digital subscriber lines ---ADSL --- a
technology that promises to provide high-speed Internet
access over regular phone lines.

Although Hayes has begun making ADSL modems for Alcatel to
sell to regional phone companies like BellSouth, this will
be the first ADSL device to carry the Hayes name. That
brand name has often been mentioned by analysts as one of
the key values the company has retained, despite its
troubled past.

Hayes emerged from its first bout with federal Chapter 11
bankruptcy laws in 1996. After several strong quarters, it
struggled as sales of analog modems slumped. After a merger
with Access Beyond late last year, Hayes looked to digital
as its salvation.

But those new technologies --- mainly ADSL and cable modems
--- are not yet providing significant revenue, while sales
of Hayes' analog modems have been stagnant.

The new ADSL modem will be shopped out for high-stakes
trials at various phone companies and Internet service
providers next month, according to Hayes spokeswoman Marcy
Palmer. If all goes well, full-volume shipments of the
modem could begin in December.

An end user would pay $299 for the device, buying the
device from the phone company or ISP, she said.
ADSL technology is capable of pumping data about 100 times
as fast as a 56 kilobits-per-second modem, currently the
fastest on the consumer market. The ADSL device from Hayes
will be capable of downloading up to 8 million bits of  
data per second, the company said.  (Copyright 1998 The
Atlanta Journal / The Atlanta Constitution 10/14/98)

HAYES CORP: Dismisses Suits
Hayes Corporation (Nasdaq: HAYZQ) announced that it has
dismissed, without prejudice, its lawsuit against the  
purchasers of its 6% Convertible Preferred Shares.  The
Company announced that the preferred shareholder
countersuits against the Company and its directors  
has similarly been dismissed without prejudice.  The
Company also announced as part of the dismissal agreement
that Mark D. Brodsky and Jeffrey S. Kaplan of  
Elliott Associates L.P., a purchaser of Hayes preferred
stock, have joined Hayes' Board of Directors, effective
October 14, 1998.

KENAR: Seeks "Stay-Put" Agreements
Kenar Enterprises, Ltd. ("Kenar") and Z.Frederick
Enterprises Ltd., debtors, seek entry of an order
authorizing Kenar to enter into ten "stay-put" agreements
with certain of the debtor's key employees.   According to
the debtor, the loss of any one of these key employees
would be devastating to Kenar's ability to sell its
remaining inventory, maintain the quality of its
merchandise, transport the finished product and ensure the
collection of accounts receivables.  If all ten employees
remain in the employ of the debtor in accordance with the
"stay-put" agreements, the total cost to the debtor would
be approximately $200,000.

KIA MOTORS: Kia and Hanwha Asset Sales Fail  
The International Herald Tribune reports on September 24,
1998 that Kia Motors Corp., with debts estimated at more
than $10 billion, canceled an auction for all its assets
for the second time this month, saying South Korea's three
other motor-vehicle makers had all demanded larger debt
write-offs than Kia's creditors could offer.

The Kia announcement came just hours after Hanwha Energy
Co. said it had canceled the sale of a thermal power plant
to AES Corp. of Arlington, Virginia, which earlier agreed
to buy the 1,500-megawatt plant for $874 million

The failure of both deals deepened the sense of despair
here over whether South Korea's conglomerates, or chaebol,
can carry out an agonizing process of restructuring while
burdened with at least $150 billion in debts to foreign
creditors and debts totaling several times that amount to
Korean banks.

Kia offered no explanation other than to say that all three
groups had attached requests for debt write-offs beyond the
$2.1 billion that Kia's creditor banks reluctantly agreed
to forgive after the cancellation Sept. 1 of the first

Kia did not say whether it would call another auction. The
new cancellation opened the possibility that it would have
to sell off its facilities piece by piece, leaving most of
its debts unpaid. Kia's debts are increasing by about $6
million a day, with more than half of the gain coming from
debt servicing.

Hanwha Energy, part of the Hanwha group, South Korea's
eighth-largest chaebol, said it had failed to come to terms
with AES on requests for a government guarantee for bills
accrued by Korean Electric Power Corp., a  
government-backed entity.

LIBERTY HOUSE: Exceeds EBITDA Goals, Sales Lag
In support of its exclusivity extension request, Liberty
House Inc. said it is exceeding planned EBITDA for the year
but sales have fallen short of projections for the last
four consecutive months. The Hawaiian retailer attributed
the lower sales to disruptions in merchandise flow, which
occurred after the March 19 bankruptcy filing, as well as
concerns about the state's economy and the continuing
deterioration of the Asian economies.

Nevertheless, performance has exceeded the projections
filed in connection with the company's debtor-in-possession
financing due to improved focus and cost cutting measures,
which are expected to result in annual savings of about $26
million. (The Daily Bankruptcy Review and ABI Copyright c
October 15, 1998)

LONG JOHN SILVER'S: Taps Special Real Estate Consultants
The debtors, Long John Silver's Restaurants, Inc., et al.
seek court authority to employ Keen Realty Consultants,
Inc. and Trammell Crow/Doppelt Retail Services (Cleveland,
OH) as Special Real Estate Consultants for the debtors.

The debtors require the services of the Consultants to
advise and assist the debtors in connection with a variety
of matters relating to the disposition of certain real
property.  The debtors seek to employ the Consultants to,
among other things, develop and implement a marketing
program, communicate with interested parties, and make
recommendations to the debtors with respect to the
advisability of accepting particular offers.

MC LIQUIDATING: Order Confirming Plan Filed With SEC
MC Liquidating Corporation's Official Unsecured Creditors'
Committee's Amended Plan of Reorganization, filed  with the
United States Bankruptcy Court for the Eastern District
of Michigan on  July 8, 1998, and the Order Confirming the
Official Unsecured Creditors'  Committee's Plan of
Reorganization dated July 10, 1998, are filed as exhibit  
material with this filing. The Order was entered by the
Bankruptcy Court on July 13, 1998." "The chapter 11 case of
Midcom Communications Inc. and renamed MC Liquidating
Corporation ("Midcom") was substantively consolidated with
those of PacNet, Inc., Cel-Tech International Corp. and
AdVal, Inc., its subsidiaries.  As a result, the combined
assets and liabilities of the Debtors are treated as one
estate.  The Debtors began liquidating their assets before
confirmation of the Plan.  The Plan provides that those
liquidation efforts shall continue under the supervision of
the Official Unsecured Creditors' Committee ("Committee"),
which filed the Plan.  The Plan provides that the Committee
will appoint a Disbursing Agent who will, under the  
direction of the Committee, liquidate the Debtors' assets
that have not been  liquidated as of the Effective Date and
make additional distributions to creditors, net of the
expenses of consummating the liquidation, from time to  
time after the Initial Payment Date, according to the
priorities established by  the Plan consistent with the
provisions of the Bankruptcy Code, until all  proceeds of
the Debtors' assets have been distributed.  The Plan
provides that the Disbursing Agent is to have all the
rights and duties of a trustee and will be empowered to
administer the estate and receive reasonable compensation
for services rendered.  The Committee shall be deemed the  
estate representative for pursuing all Causes of Action and
Avoidance Actions  on behalf of the estate." (Copyright
States News Service, 10/14/98)

OXFORD HEALTH: Agrees To Sell Pa. Operations For $10.4M
Oxford Health Plans Inc., agreed to sell its Pennsylvania
health-maintenance-organization operations to Health Risk
Management Inc. for $10.4 million.  The deal, expected to
close by year end follows agreement s Oxford reached with
either regulators or insurers to withdraw from markets in
Chicago and Florida.  No money is expected to change hands
in those two agreements.  The moves are part of its plan to
recover from losses after computer and management problems
that led Oxford to underestimate its medical costs.

PERK DEVELOPMENT: Seeks To Reject Four Leases
Perk Development Corporation and Brambury Associates,
debtors, seek court approval to reject four leases of
nonresidential real property.  DJM Realty Services, Inc.
("DJM") is the court approved lease valuation expert.  DJM
found no value in the leases for stores nos. 26, 27, 35 and
37.  The stores covered by the leases are in Newburgh, New
York, Vails Gate, New York, Oswego, New York and Watertown,
New York.

PITTSBURGH PENGUINS: Mayor Seeks Investigation of Co-owners
Pittsburgh Mayor Murphy has asked for an investigation of
Pittsburgh Penguins co-owners Roger Marino and Howard
Baldwin and the possibility that they collected amusement
taxes without forwarding the funds to the city treasury,
The Pittsburgh Post-Gazette reported.  The Penguins'
interim CEO said the actions are "preposterous," but the
district attorney has opened an investigation. Yesterday
the team won approval from the bankruptcy court for a $2.5
million emergency loan from Marino that will enable the
team to make payroll today. The court also allowed the
city's and county's lawsuit against Marino to proceed; that
suit seeks an order barring Marino from having discussions
with other cities about moving the Penguins. (ABI 14-Oct-

PRECISION AUTO: 4th Quarter-Restated 3rd Quarter Results
Precision Auto Care, Inc. (Nasdaq: PACI) today announced
that the Company reported pro forma combined revenues of
$48.0 million and pro forma combined net income of $1.8
million, or $0.32 per share, for the year ended June 30,
1998, compared to pro forma combined revenues of $43.1
million and pro forma combined net income of $1.8 million,
or $0.33 per share, for the prior year.  Results for the
fourth quarter were pro forma combined revenues of $13.6
million and pro forma combined net loss of $0.6 million, or
$0.11 per share, compared to pro forma combined revenues of
$10.0 million and pro forma combined net income of $0.00
million, or $0.00 per share, for the fourth quarter of the
prior year.

In its September 21, 1998 press release, the Company
announced that the manner in which it must account for
sales of certain car washes, a lube center, and fast lube
buildings negatively affected results of the fourth quarter
and would result in a restatement of its unaudited
financial statements for the quarter ended March 31, 1998.
The restated results are slightly less than the results the
Company had estimated in its prior press release.

In its previous press release, the Company stated that it
was not in compliance with covenants contained in its bank
credit agreement and that the company was in the process of
seeking waivers or modifications of the covenants from its  
bank lenders.  These waivers and modifications have been
obtained.  The Company presently has borrowed approximately
$24 million under its bank credit agreement.  $14 million
of this represents amounts extended under a portion of  
the bank credit facility that was dedicated to funding
acquisitions (the "Acquisition Line of Credit") and $10
million represents funds advanced under a  general
revolving credit portion of the credit facility (the "Line
of Credit Loan").

The Company and the bank have entered into an amendment to
its credit agreement pursuant to which amounts available
under the Acquisition Line of Credit and the Line of Credit
Loan will be reduced to $10 million and $5 million,
respectively, for a total of $15 million. The Company
expects that these mortgage financings will yield
approximately $15 million in net cash proceeds and will
require monthly payments of interest (at an annual rate of
approximately 8%) and principal (amortized over a 20 year

The terms of the amendment also require the Company to
obtain $2 million in the form of equity financing or debt
financing that is subordinate to the bank, in each case on
terms acceptable to the bank, no later than October 15,
1998.  Substantially all of the Company's Board of
Directors have signed pledges to provide the Company with
$2 million of subordinated debt financing in order to
satisfy this requirement and the Company expects that it
will complete this financing by the October 15, 1998

The Company has not yet received a commitment letter or
other binding agreement with respect to such financing and
there can be no assurance that the Company will consummate
real estate financing on the terms described above.
Precision Auto Care, Inc. (Nasdaq: PACI) is the world's
largest franchisor of auto care centers, with 651 operating
centers as of October 1, 1998.  The Company franchises and
operates Precision Tune Auto Care, Precision Auto Wash, and
Precision Lube Express centers around the world.

R&S/STRAUSS: Seeks Court Approval To Close 17 Stores
R&S/Strauss Inc. is seeking court approval to close 17
stores and hire the joint venture of Hilco Trading Co.,
Great American Asset Management, and Par International Inc.
to conduct going-out-of-business sales at 12 of the
locations.  The 109-store chain plans to close five stores
immediately and transfer some of their inventory to the 12
GOB sale locations: Springfield, Agawam, and Chicopee,
Mass.; and Bloomfield, Waterbury, New Britain, Middletown,
Bristol, East Hartford, Naugatuck, Manchester, and
Torrington, Conn.  The stores that have already closed or
will close shortly are in Brooklyn, N.Y., and Bayonne,
Aberdeen, Lopalcong Township, and Cherry Hill, N.J.  Under
the agency agreement with the Hilco venture, R&S would
receive a guaranteed payment equal to 40.2% of cost value
of the GOB store merchandise as well as half of any
proceeds in excess of 73% of the cost value of the
merchandise. (Federal Filings Inc. 15-Oct-98)

RAYTECH CORP: Tentative Settlement With Creditors & Equity
Raytech Corp. reports to the SEC that, the Debtor has
reached a tentative settlement with representatives for its
creditors and equity holders with respect to a consensual
plan of reorganization to be filed in its Chapter 11
bankruptcy case which was commenced in the United States
Bankruptcy Court for the District of Connecticut in March
1989.  The Settlement is by and among Raytech, the Official
Creditors' Committee, the Guardian Ad Litem for Future  
Claimants, the State of Connecticut, Department of
Environmental Protection,  the United States Department of
Justice, Environmental and

Natural Resources Division, and the Official Equity
Committee.  Under the Settlement, the Plan, which is
subject to the vote of creditors and equityholders, and
confirmation by the Bankruptcy Court, will provide
general  unsecured creditors, including the present and
future asbestos claimants and  government claimants,
through the vehicle of a trust established pursuant to  
Section 524(g) of the Bankruptcy Code, with (i) ninety
percent (90%) of the  stock of reorganized Raytech, (ii)
all excess cash not necessary to fund the  ongoing
operations of reorganized Raytech, and (iii) net recoveries
from  certain claims against third parties.  Under the
Plan, the existing Raytech stockholders shall receive ten
percent (10%) of the stock of reorganized Raytech.  It is
estimated that the entire plan confirmation process could
take up to a year." The dilution of shareholder value under
the Settlement reflects the fact that pursuant to court
decisions, Raytech's adjudged liabilities, as successor to
Raymark Industries, Inc., appear to substantially exceed
the reasonable value of its assets.  The corporate
restructuring of Raytech approved by the shareholders in
1986 was ruled invalid by a U.S.  District Court in Oregon
and Raytech was thereby held to have successor liability
for Raymark's asbestos tort liabilities.

Raytech then filed a voluntary petition in bankruptcy to
stay the multiple asbestos tort suits filed against it on
theories of successor liability.  Thereafter, Raytech
sought determination in its bankruptcy case, that it was
not bound by the decision in Schmoll. (Schmoll v.Acands,
Inc., 703 F.  Supp.  868 (D.  Ore.  1988), aff'd 977 F.2d
499 (9th Cir.1992)).  Raytech then filed a voluntary
petition in The U.S. District Court ruled that Raytech was
bound under the principles of collateral estoppel by the
decision in Schmoll.

Raytech then filed an adversary proceeding in the
Bankruptcy Court seeking a declaration that its liability
as successor to Raymark was limited. The Court granted the
creditors' motion for  summary judgment against Raytech
ruling that under Schmoll and White (Raytech  Corporation
v. White, No. B-89-623 (D. Conn., August 28, 1991) and
that  decision was affirmed by the Court of Appeals, 54 F3d
187 (3d Cir.  1995), cert. denied, 516 U.S.  914, 116 S.  
Ct.302 (1995)) Raytech's liability as Raymark's successor
was unlimited in scope (Bkrptcy.  Conn Feb 11, 1998)."
(Copyright States News Service, all rights reserved

RIVER OAKS: Reaches Agreement With Lender
River Oaks Furniture, Inc. (OTC Bulletin Board: OAKSE), a
designer and manufacturer of upholstered furniture  
for major furniture chains, announced today it has reached
agreement with BNY Financial Corp. to restructure the
Company's debt and present a reorganization  plan to the
Bankruptcy Court by December 1998 that will clear the way
for the  Company's successful emergence from Chapter 11.

The Company continues to make significant progress in the
implementation of its restructuring initiatives, said Len
York, a principal of turnaround and corporate renewal firm
OSNOS & Company and acting chief executive of River  
Oaks.  "Since filing Chapter 11 in March of this year,
River Oaks has made dramatic progress in streamlining its
operations, reducing operating costs and enhancing
operating efficiencies," he said.  Within the past few
months, the Company has restructured its operations in
Mississippi, and consolidated manufacturing facilities to
one plant each in Baldwin, Miss. and Compton,  
Calif., supported by corporate headquarters in Fulton,
Miss., allowing River Oaks to serve its customers more
effectively and efficiently.

The proposed reorganization has been made possible through
successful implementation of aggressive actions aimed at
strengthening and rebuilding River Oaks' business,
bolstered by continued debtor-in-possession financing
approved earlier this year and provided by BNY Financial.  
As a component of the restructuring, senior executives
Stephen Simons, former chairman, and John Nail, former
president, have tendered their resignations from River Oaks
to  pursue other opportunities, and are no longer
associated with its board of directors or operations.  Mr.
York said the Company has completed its search for a
permanent chief executive officer, and expects to announce
an appointment shortly.

"By improving customer service, consolidating our
manufacturing capacity, enhancing our delivery capabilities
and our product quality, we have strengthened customer
relationships which had suffered as a result of the  
Company's financial difficulties," Mr. York said.  "As we
move forward into the new season, we are pleased to report
that the tough decisions are now behind us, putting River
Oaks well on track to emerge from the reorganization
process as a streamlined, efficient manufacturer tightly
focused on servicing our valued customers. Through our
renewed commitment to customer service, our customers can
rest assured that River Oaks will be here to serve them for
many years to come."

Founded in 1987, River Oaks designs and manufactures
leather and upholstered  furniture under the brand names
River Oaks(R), River Crest(TM) and Gaines(TM).  River Oaks
filed a voluntary petition under Chapter 11 of the
Bankruptcy Code on March 3, 1998.  It subsequently retained
New York- and Charlotte, N.C.-based  OSNOS & Company to
assist in its restructuring.

SOUTHEAST BANKING: Suspension of $100M to Creditors
The bankruptcy trustee for Southeast Banking Corp. today
announced that the U.S. Bankruptcy Court has suspended the
previously approved distribution of $100 million to
creditors of the failed bank holding company.

The suspension, ordered at the request of the bankruptcy
trustee, comes as a result of a recent ruling from the
United States Court of Appeals for the Eleventh Circuit in
a dispute between holders of Southeast Banking Corp.
senior  and subordinated bonds. In an opinion issued on
September 28, 1998, the Court of Appeals held that the
Bankruptcy Code had eliminated the "Rule of Explicitness"
on which lower courts had relied in refusing to direct
payment of  post-bankruptcy interest, costs and fees to the
holders of senior notes. The Bankruptcy Court has scheduled
a Status Conference for October 26, 1998, to consider the
appeals court decision and whether the distribution can
proceed in a lesser amount or on other terms and

If the suspension is lifted following the Status
Conference, the distribution will be made by Jeffrey H.
Beck, the Fort Lauderdale attorney and bankruptcy trustee
appointed in April to succeed William A. Brandt, Jr.
Upon his appointment as trustee, Beck also became Successor
Agent to the Federal Deposit Insurance Corporation as
Receiver for the failed Southeast Bank, N.A. Mr. Beck  is
represented by Mark D. Bloom of Greenberg Traurig, P.A. in
Miami, who made  the court filing on his behalf.

Southeast Banking Corp. filed for bankruptcy in September
of 1991, immediately following the seizure of its wholly-
owned subsidiary banks by federal and state regulators. The
bankruptcy estate has already made or commenced three prior  
interim distributions to creditors and bondholders in the
total amount of  approximately $201 million.

STRATOSHPHERE: Reorganization Becomes Effective
Stratosphere Corporation announced the Chapter 11
Reorganization of the Company and its subsidiary,
Stratosphere Gaming Corp., became effective.

On August 20, 1998, the Nevada gaming authorities licensed
Carl C. Icahn and certain of his affiliated companies as
controlling persons of the reorganized Company, as
contemplated by the Plan of Reorganization.

Under the Plan, the Company's stock that was outstanding
prior to the effective date was canceled and the Company's
First Mortgage Notes ("Notes") that were outstanding prior
to the effective date have been exchanged for a total of  
2,030,000 shares of new common stock. Approximately 84.66%
of the 2,030,000 new shares are issued to Mr. Icahn or
entities that he controls.

Under the Plan, holders of the Notes are the only persons
who received new stock of the Company.

The Company has received all necessary regulatory approvals
including that of the Nevada State Gaming authorities.

SUN TV: Committee Taps Ernst & Young Accountants
The Official Committee of Unsecured Creditors of Sun TV and
Appliances, Inc. and Sun Television and Appliances, Inc.
applies to the court for authority to employ Ernst & Young,
LLP ("E&Y") as accountants to the Committee.

E&Y shall conduct a financial investigation in order to
substantiate the current financial position of the debtors
and to identify and substantiate the business problems that
led to the filing of the bankruptcy petitions.  The
accountants will analyze the debtors' business plans, cash
flow projections, store closing programs, and other reports
or analyses prepared by the debtors or their professionals;
assess and analyze the economic ramifications of proposed
transactions, review the debtors' financial statements,
review the debtors' real estate portfolio, analyze the
debtors' tax position, attend meetings, prepare a
hypothetical liquidation analysis, review and analyze
transactions with insiders and provide expert testimony.
E&Y's current hourly rates range from $90 to $495 per hour.

SUN TV: Committee Taps Otterbourg, Steindler - Attorneys
The Official Committee of Unsecured Creditors seeks court
approval to employ the law firm of Otterbourg, Steindler,
Houston & Rosen, PC as counsel to the Committee.

The firm will, among other things, assist and advise the
Committee in its consultation with the debtors relative to
the administration of the Chapter 11 cases, attend meetings
and negotiate with the representatives of the debtors,
assist and advise the Committee in its analysis of the
debtors' affairs, assist the Committee in all aspects of
review and formulation of a plan, and assist the Committee
in all aspects of review and formulation of any financing

The firm charges between $125 and $440 per hour.

TEARDROP GOLF: Assignment of Agreement with Couples
TearDrop Golf Company (Nasdaq:TDRP) announces court
authorization of the assignment to TearDrop of an
endorsement agreement with Fred Couples, internationally-
known superstar golf professional, for his services as a  
corporate and product spokesperson.

Announcement of the authorization is being made today as
TearDrop also said that it has elected not to pursue
further bids to acquire certain assets of Lynx Golf
Company. TearDrop submitted an opening bid for Lynx in an
auction directed by the U.S. Bankruptcy Court for the
Southern District of California on October 14, 1998. At the
sale hearing, the court approved the assignment of the
endorsement agreement with Mr. Couples from Lynx to
TearDrop Golf Company.  The authorization will be subject
to an order of the court to be issued shortly.

Rudy Slucker, President and CEO of TearDrop Golf Company,
said: "We're delighted to welcome Fred Couples to our
family of companies. Fred will play a  lead role as our
spokesperson, ensuring that the TearDrop family of brands  
continues to grow."

TearDrop's overall corporate position within the golf
community will be enhanced with Fred on board; and our
presence will be strengthened on each of the major
professional golf tours," Mr. Slucker added.

Commenting on his company's decision to terminate
participation in the bidding for Lynx Golf, Mr. Slucker
said "We have successfully integrated the acquisition of
Ram Golf and Tommy Armour Golf into the Company and have
been able to add significant value to each of them. We will
continue to seek additional acquisition opportunities to
enhance shareholder value and further solidify our position
as one of the leading manufacturers of premium golf clubs
and accessories."

The TearDrop Company is the leading manufacturer of premium
putters using ROLL-FACE(TM) technology. TearDrop's wholly-
owned subsidiaries, Armour(R) Golf and RAM(R) Golf, are
manufacturers of golf clubs and accessories. TearDrop is
also the exclusive North American distributor of Walter
Genuin(TM) golf shoes.

UNISON HEALTHCARE: Applies For Appointment of Examiner
The U.S. Trustee seeks the appointment of Keith J. Shapiro
as examiner in the case of Unison Healthcare Corporation,

DLS CAPITAL PARTNERS: Bond Pricing for Week of October 12
Following are indicated prices for selected issues:

Acme Metal 10 7/8 '07                      18 - 20 (f)
Amer Pad & Paper 13 '05                    42 - 45
Amer Telecasting 0/14 1/2 '04              23 - 25
Asia Pulp & Paper 11 3/4 '05               61 - 63
Boston Chicken 7 3/4 '05                    5 - 7 (f)
Brazos 10 1/2 '07                          28 - 33
Brunos 10 1/2 '05                           4 - 8 (f)
CAI Wireless 12 1/4 '02                    20 - 22 (f)
Cityscape 12 3/4 '04                       17 - 20 (f)
E & S Holdings 10 3/8 '06                  56 - 60
Globalstar 11 1/4 '04                      55 - 57
Harrah's Jazz 14 1/4 '02                   22 - 24 (f)
Hechinger 9.45 '12                         69 - 71
Hills 12 1/2 '03                           39 - 41
Levitz 9 5/8 '03                           45 - 55 (f)
Liggett 11 1/2 '99                         68 - 70
Mobilemedia 9 3/8 '07                      10 - 12 (f)
Penn Traffic 9 5/8 '05                     18 - 19
Royal Oak 12 3/4 '06                       46 - 50
Service Merchandise 9 '04                  44 - 46
Sunbeam 0 '18                              10 - 12
Zenith 6 1/4 '11                           20 - 23 (f)


The Meetings, Conferences and Seminars column appears in
the TCR each Tuesday.  Submissions via e-mail to are encouraged.  

Bond pricing, appearing each Friday, is supplied by DLS
Capital Partners, Dallas, Texas.

S U B S C R I P T I O N   I N F O R M A T I O N     

Troubled Company Reporter is a daily newsletter, co-
published by Bankruptcy Creditors' Service, Inc.,
Princeton, NJ, and Beard Group, Inc., Washington, DC.  
Debra Brennan and Lexy Mueller, Editors.   

Copyright 1998.  All rights reserved.  ISSN 1520-9474.  
This material is copyrighted and any commercial use, resale
or publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly
prohibited without prior written permission of the

Information contained herein is obtained from sources
believed to be reliable, but is not guaranteed.  The TCR
subscription rate is $575 for six months delivered via e-
mail.  Additional e-mail subscriptions for members of the
same firm for the term of the initial subscription or
balance thereof are $25 each.  For subscription
information, contact Christopher Beard at 301/951-6400.  

           * * *  End of Transmission  * * *