TCR_Public/981029.MBX T R O U B L E D   C O M P A N Y   R E P O R T E R
  Thursday, October 29, 1998, Vol. 2, No. 212


2CONNECT EXPRESS: Files Current Report With SEC
BOSTON CHICKEN: Judge Approves Reorganization Plan
CAMPO ELECTRONICS: Files Current Report With SEC
CONTINENTAL AIR: Net Income Impacted By Aircraft Retirement

CRIIMI MAE: Strikes Back at Creditor
DANNY'S MARKETS: Will Give Pay Raises
DOMINION BRIDGE: Granted Extension
DOW CORNING: Creditor Panel Seeks Procedures For Media

GITIC: Bond Default Shakes Creditors
GOLDEN BOOKS: Gets Second Chance
HOMELAND HOLDING: Upbeat Despite Loss  
INCO LIMITED: Reports Third Quarter Loss of $24 Million
LOGAN GENERAL: Can't Pay Bills

LEVITZ FURNITURE: Gentext Backs Out of $26.5 M Sale
NEWSTAR RESOURCES: Announces Corporate Changes
NOMURA SECURITIES: Shareholders and Former Execs Agree
POCKET COMMUNICATIONS: Lenders Amend Plan To Give FCC Cash
SOUTHERN PACIFIC FUNDING: Trustee Names Creditor Panel

STREAMLINE INDUSTRIES: Carlyle Proposes Acquisition
UNITED COMPANIES: Says Building Sale Routine
VENTURE: Hearing Set for Plan Confirmation
WESTERN DIGITAL: Reports 1st Quarter Net Loss of $110M
ZENITH ELECTRONICS: Reports 3rd Quarter $119m Net Loss

2CONNECT EXPRESS: Files Current Report With SEC
On October 22, 1998 2Connect Express, inc. filed an 8-K
current report with the SEC.

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

On October 16, 1998, 2Connect Express, Inc. issued a Press
Release announcing that the Bankruptcy Court, Southern
District of Florida, executed an Order confirming
2Connect's Plan of Reorganization. The Effective Date of
the Plan of Reorganization will be October 26, 1998, 10
days following the confirmation. The Press Release further
stated that, "as previously disclosed, 2Connect entered
into an agreement with Sterne, Agee & Leach, Inc. on August
27, 1998 whereby Sterne Agee will, as of the Effective Date
of the Plan of Reorganization, acquire out of bankruptcy
100% of the equity interests of 2Connect and 2Connect will
retain the Coral square store lease and certain store

In consideration for such acquisition, Sterne Agee will
make a new value contribution to the bankruptcy estate for
the benefit of 2Connect's creditors in the amount of
$175,000 which funds are currently in escrow. To effect
this transaction and in accordance with the Plan of
reorganization, as amended, upon the Effective Date, all of
the current and existing Common Stock of 2Connect
will be forever extinguished and canceled and 2Connect will
issue new shares of Common Stock to Sterne Agee which shall
constitute 100% of the issued and outstanding shares.
Consequently, the existing shareholders of the Common Stock
of 2Connect will not retain any interest in the post-
bankruptcy estate for their extinguished and cancelled

The Company filed an 8-K report with the Securities and
Exchange Commission on September 23, 1998 announcing that
on September 15, 1998, the Company filed with the U.S.
Bankruptcy Court the Debtor's Monthly Financial Report
(Business) for the period August 2, 1998 to August 29,

On October 7, 1998, the Company filed an Amendment to the
Debtor's Monthly Financial Report (Business) for the period
August 2, 1998 to August 29, 1998 reclassifying the Stern
Agee new value payment from cash in escrow to Accounts

The Tennessean reports on October 25, 1998 that  
Venture capitalists, including venerable New York-based
Warburg Pincus Capital Partners, pledged some $20 million
to help the company grow.  "Everyone was real enthusiastic
about the new facility," said Soddy-Daisy Mayor Bob
Privett, who later would use the clinic twice after nearly
severing fingers while working as a contractor. "It was

Now it's closed. As of Friday, so are the last of eight
other clinics Arcon operated in five states, punctuating
one of the most high-profile health-care company failures
in Nashville's history.

Arcon, started in the go-go mid-'90s with a host of other
Nashville-based health-care companies, sprinted through
some $50 million in venture capital and owes another $50
million to the real estate investment trusts that built its  
clinics, its lawyer has said.

The patients didn't come. Not enough of them, anyway. Said
Arcon Soddy-Daisy clinic physician Willis Greer, "Their
forecast wasn't realistic." In a nutshell, Arcon was
designed to attract patients who want to stay  
closer to home for health care. It also would provide the
care exclusively on an outpatient basis, making it less
costly than at a hospital with greater overhead.

Clinics such as Soddy-Daisy, which Arcon's U.S. Bankruptcy
Court filings show lost more than $2 million in the first
half of this year, also had to had to support Arcon's
considerable corporate overhead in Nashville.
By Sept. 1, Arcon had stopped paying rent to Nationwide,
Stokes said.

Problems were so severe that Arcon didn't have enough money
in one of its accounts to pay a small printing company,
which billed it in June for $250.38 worth of paper products
such as patient information forms and again in August for
$90.24 worth of office supplies such as paper clips and an
ink pad, New World Printing alleges in Bankruptcy Court

By early October, after failing to interest enough  
investors in contributing a fourth round of capital, Arcon
informed trade  creditors through a note stuck to a
meeting-room door at U.S. Bankruptcy Court in Nashville
that it was too broke even to reorganize.

BOSTON CHICKEN: Judge Approves Reorganization Plan
Bankruptcy Judge Charles G. Case, District of Arizona,
approved a multi-million-dollar reorganization plan by
Boston Chicken Inc. in order to convince managers not to
abandon the company during its chapter 11 case, according
to the Associated Press. CEO Michael Jenkins had testified
that managers at Boston Market stores had been quitting in
large numbers since the chain disclosed its financial
difficulties in July.

Jenkins said the plan could cost as much as $18 million
over the next two years and would feature $15,000 bonuses
paid out over two years to general managers, and higher
bonuses for upper-level managers. Jenkins argued that it
would cost the company three times as much if it were
forced to replace those employees. The company, based in
Golden, Colo., filed chapter 11 on Oct. 5 when it could not
make a $283 million loan payment due Oct. 17. Although the
company closed 178 of its stores under the Boston Market
name, it continues to operate 759 company-owned stores, and
franchisees are running some 900 stores. Attorney Evan D.
Flaschen of Hebb & Gitlin, an attorney for the creditors,
told Judge Case they wanted another week to study the
reorganization proposal.  He said "We are not trying to
make the point that this is too much; we're trying to make
the point that we don't understand it." (ABI 28-Oct-98)

CAMPO ELECTRONICS: Files Current Report With SEC
Campo Electronics, Appliances and Computers, Inc. filed a
form 8-K current report with the SEC on October 19, 1998.

The company reports Effective October 19, 1998,  
PricewaterhouseCoopers LLP ("PwC") resigned as  principal  
accountants  of Campo  Electronics, Appliances and
Computers, Inc. due to Campo's pursuit of strategic
alternatives including the  sale of the Company.

(b) PwC's reports on the company's consolidated  financial
statements for the two fiscal years ended  August  31,  
1996 and 1997, respectively, did  not contain an adverse
opinion or disclaimer of opinion, nor were  such  reports  
qualified  or modified  as  to  uncertainty, audit scope,
or accounting principle except that PwC's report on the
company's consolidated  financial  statements  for  the
fiscal  year ended August 31, 1997  included an  
explanatory paragraph regarding the company's ability to
continue as a going concern.

(c) During the company's  two  fiscal years ended August
31, 1997 and  the  subsequent  interim  period preceding  
the  decision of  PwC  to resign as  independent  
accountants,  there  were no disagreements with PwC
on  any  matter  of accounting principles or practices,
financial statement disclosure, or auditing  scope  or
procedure, which disagreement(s), if not resolved to the
satisfaction  of  PwC,  would   have  caused  it to make a
reference  to the subject matter of the disagreement(s) in
connection  with its reports covering such periods.

CITYSCAPE FINANCIAL: Lays Off 53 Percent of Workforce
Cityscape Financial Corp. laid off 53.5 percent of its work
force last week, reducing its staff from 454 to 211
employees. Company officials said the layoffs were part of
are structuring plan that includes streamlining and
downsizing operations at the sub-prime mortgage lender. In
connection with the layoffs, the company has closed its
branch operation in California, while maintaining its
offices in New York, Georgia, and Illinois.  Cityscape,
which filed a prepackaged reorganization plan early this
month, expects to record a material restructuring charge in
the fourth quarter. (The Daily Bankruptcy Review and ABI
Copyright c October 28, 1998)

CONTINENTAL AIR: Net Income Impacted By Aircraft Retirement
The Company recorded consolidated net income of $73 million
for the three months ended September 30, 1998 as compared
to consolidated net income of $110 million for the three
months ended September 30, 1997.  Net income was
significantly impacted by a $122 million ($77 million
after-tax) fleet disposition/impairment loss resulting from
the Company's decision to accelerate the retirement of
certain jet and turboprop aircraft.

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

Cornucopia Resources Ltd. (the "Company") has been in
negotiations with several companies since early this year
with a view to a corporate combination or the sale of the
Company's Mineral Ridge Mine in Nevada.  As reported in the
Company's Form 10-Q for the second quarter ended June 30,
1998, the Mineral Ridge Mine was not in compliance with
certain of the covenants of the mine debt financing
facility and the Company was in arrears on interest and
principal payments.  Continued forbearance by the Company's
lender, Dresdner Kleinwort Benson was largely due to the
advanced nature of the discussions between the Company,
Dresdner and other interested parties.

On September 10, 1998, the Company announced that it had
entered into a letter of intent with Vista Gold Corp. of
Denver, Colorado for the purchase by Vista of all of the
shares of the Company's wholly-owned subsidiary, Mineral
Ridge Resources Inc. ("MRRI"), which operates the Mineral
Ridge Gold Mine in Esmeralda County, Nevada.  As
consideration, the Company will receive 1,562,500
common shares of Vista valued at $250,000 and Vista will
subscribe to a private placement of 2,777,777 common shares
of Cornucopia Resources Ltd. valued at $250,000.

This transaction, which was subject to final due diligence
and regulatory approval, was contingent upon Vista
finalizing agreements with MRRI's major creditors,
including Dresdner with respect of the $13.3 million mine
debt financing facility.  In the interim, Vista will assist
in the management of the Mineral Ridge Mine.

On October 21, 1998, the Company announced that the sale of
the Mineral Ridge Mine to Visa had been completed.  The
Company received 1,562,500 shares of Vista as consideration
for the sale and Vista had subscribed to a private
placement of 2,777,777 common shares of the Company for
proceeds of US$250,000.  Vista had entered into agreements
with Dresdner and MRRI's principal creditors which
relieve the Company of all its liabilities, including
guarantees, with respect to the $13 million loan agreement
with Dresdner and approximately $2 million due
to major trade creditors.  

Non-transferable share purchase warrants, previously issued
to Dresdner Bank AG for the purchase of up to 1,750,000
shares of Cornucopia at C$1.35 per share have now been
repriced at C$0.20 per share, and the term of the warrants
had been extended from January 17, 2001 to December 31,

On September 10, 1998, it was also announced that, subject
to all required regulatory approvals, incentive stock
options be granted to directors and employees of the
Company for the purchase of a total of 1,415,000 shares in
the capital of the Company.  The options were granted at
the exercise price of Cdn.$0.15 per share, which was above
the closing price of the Company's shares on the Toronto
Stock Exchange on September 9, 1998  The options are
exercisable for a five year term expiring on September 10,

CRIIMI MAE: Strikes Back at Creditor
The Daily Record, Baltimore reports on October 22, 1998
that Criimi Mae Inc. struck back at one of its principal
financiers, yesterday filing a lawsuit against Merrill
Lynch Mortgage Capital Inc. over actions by Merrill that
forced the Rockville firm into bankruptcy.  The move
followed a lawsuit filed Tuesday against another creditor,
Morgan Stanley & Co. International Inc., to prevent Morgan
from disposing of hundreds of millions of dollars of Criimi
Mae's assets.

Both actions came after Criimi Mae won a ruling last week
that barred yet another creditor, Citicorp Securities Inc.,
from seizing assets, and signaled that Criimi Mae
executives, intend to fight to restore their firm's
solvency. The Rockville-based commercial mortgage company
filed for Chapter 11 bankruptcy protection on Oct. 5, after
caught in a cash squeeze. In a statement yesterday, Criimi
Mae Chairman William B. Dockser used unusually frank
language to accuse Morgan Stanley of "using the current
temporary market turmoil to pay an absurdly low price" to
take over mortgage assets that are performing as expected.

Criimi Mae has billions of dollars in assets --
specifically, sub-investment grade commercial mortgage-
backed securities (CMBS) -- but it cannot reasonably hope,
in the near term, to turn them into much- needed cash.
That's because the market for CMBS has dried up in the face
of widening interest rate spreads.  Those widened spreads
(the difference between interest paid on CMBS and on
treasuries) are said to have forced the bankruptcy.   Last
month, Merrill Lynch loaned Criimi Mae almost $275 million
to buy commercial mortgage bonds.  When the spreads
suddenly and unexpectedly widened, the value of the bonds
dropped. That prompted Merrill Lynch to place a "collateral
call" on Oct. 2.

By taking the move, Merrill Lynch sought to reduce its loan
exposure by forcing Criimi Mae to hand over cash or
additional collateral to make up the deficit.  According to
the lawsuit, filed by Baltimore's Venable, Baetjer and
Howard LLP, Merrill Lynch demanded $20 million from Criimi
Mae to make up what it calculated to be the margin deficit.
Criimi Mae executives have characterized that amount as
being "unreasonable" -- though they have not given an
amount they consider to be proper -- and refused to pay.
Instead, they filed for bankruptcy protection.

Other lenders, notably Citicorp and Morgan Stanley, have
also allegedly seized or attempted to seize assets that
Criimi Mae executives say belong to the company.  That
prompted Criimi Mae to go to court to try to fend off the
creditors.  The suit against London-based Morgan Stanley &
Co. International, a subsidiary of Morgan Stanley Dean
Witter & Co., alleges that Morgan Stanley willfully
violated the bankruptcy code by moving to obtain assets
that it did not have a right to take.  Specifically, Morgan
Stanley went after commercial mortgage-backed  
securities with a face value of $286.8 million.

Morgan Stanley allegedly valued Criimi Mae's equity in the
assets at $237,127.93. Criimi Mae says its share of the
CMBS is $54.5 million.  Criimi Mae's suit also accuses
Morgan Stanley of "planning an even more flagrant and
damaging violation;" specifically, the sale of CMBS into an
already depressed market.

That move, Criimi Mae suggests, would be ruinous to the
company, its shareholders, its other creditors and others
in the CMBS market.  Jeanmarie McFadden, a spokesman for
Morgan Stanley, said the company has reviewed Criimi Mae's
lawsuit and found it to be without merit. "We will defend
ourselves vigorously against it," she added.

Criimi Mae is facing about a dozen shareholder lawsuits
alleging its executives made false statements about the
viability of the company in an attempt to inflate the stock
price. Criimi Mae's stock price, normally around  
$12 per share, closed yesterday at $1.88.

DANNY'S MARKETS: Will Give Pay Raises
Employees at Danny's Markets Inc. on Sunday agreed to a
wage increase based on seniority until a formal contract
can be worked out, company attorney Robert Finkel said
Monday.  Danny's employees last year took a 23-percent pay
cut to help pull the local supermarket chain out of
bankruptcy. Their contract expired Monday.

Company officials wouldn't release details of the
agreement.  "The company just wanted to give something back
to its employees, who helped  the company out when it
needed them," Finkel said. "It wasn't a formal agreement,
just a good-faith gesture while we continue to negotiate."

Officials at Teamsters Local 339, which represents Danny's
cashiers and other workers, declined to comment.

DOMINION BRIDGE: Granted Extension
Dominion Bridge Corp. and its subsidiaries were granted an
extension to file their proposal to their respective
creditors under the Bankruptcy and Insolvency Act,
according to a newswire report. The group's parent company
and subsidiary Cedar Group of Canada were granted an
extension until Nov. 5; shipbuilding subsidiary Industries
Davie Inc. was granted an extension until Dec. 10.

DOW CORNING: Creditor Panel Seeks Procedures For Media
As Dow Corning Corp. and its tort claimants' committee put
the finishing touches on a joint reorganization plan and
disclosure statement, the company's official unsecured
creditors' committee is asking the court to establish
procedures to govern a media campaign expected to be
launched by the company with the plan's filing.  Dow
Corning and the tort committee have resolved all issues but
one and were confident that a plan and disclosure statement
could be filed by Oct. 27.  However, if the plan was not
ready by today, Dow Corning intends to delay filing the
plan until the day after the national elections on Nov. 3
because the company plans to make the filing "a media
event" and does not want the filing to be dwarfed by
election issues. (Federal Filings Inc. 28-Oct-98)

GITIC: Bond Default Shakes Creditors
The International Herald Tribune reports on October 28,
1998 that one of China's most prominent investment
companies has defaulted on an international bond payment,
banking officials said Tuesday, the first time such  a
Chinese company had done so since the Communist revolution
in 1949.

At the same time, a new report indicated that Chinese
corporate debt held by overseas banks  largely in Japan and
Europe  might stand at more than double the previous
estimates, even as doubts spread over how much of it would
be repaid.

The default by Guangdong International Trust & Investment
Corp., known as GITIC, immediately raised the question of
whether the Chinese government would stand behind the huge
debts of China's regional investment companies,
including  Guangdong, as financial tremors continue to
shake Asia and the growth of  China's economy slows.

Guangdong defaulted on an $8.75 million interest payment on
a $200 million bond, according to Joanne Shephard, a Chase
Manhattan Bank spokeswoman. In the  past, China has always
repaid foreign loans from shuttered institutions, but  
Guangdong is different, possibly heralding a new and much
more risky phase in  the financing of China's development.

Since the bankruptcy of Guangdong on Oct. 6, information
has been slow to emerge about the exposure of foreign banks
to China's other international trust  and investment
companies, known as ITICs, which are backed by the Chinese  
government or by provincial governments to raise money

   Potentially more worrying, however, is the debt of
Chinese companies known as "red chips," which are
incorporated in Hong Kong and quoted on the stock  exchange
here but controlled by Beijing. According to a report by
Goldman,  Sachs & Co., the red chips may have borrowed more
than twice as much money from  overseas banks as was
estimated earlier this month.

"We estimate aggregate debts for major red-chip companies
amount to 100 billion Hong Kong dollars," or $13.35
billion, the report says

Analysts say that, like the international trusts, red chips
have used a lot of their borrowed money to invest in
speculative real- estate deals and the stock market.
Foreign banks have lent to red chips "without examining
credit risks carefully," Goldman Sachs said. This, the U.S.
firm said, was because of a "perhaps mistaken assumption"
that, in the event of cash flow problems, the  
government- supported parent companies in China would
"eventually honor the payments."

Goldman added that leading bank lenders to ITICs
represented a "veritable 'who's who' of global banks,
including CS First Boston, Commerzbank, Dai-Ichi  
Kangyo Bank, Dresdner Bank, Sakura Bank, Fuji Bank,
Sumitomo Bank, SocGen, Westdeustche Landesbank." It added
that according to the Hong Kong Monetary Authority, 80
percent of exposure to the ITICs was on the part of foreign  

The backing of the Guangdong provincial government was once
thought to be enough to guarantee the survival of
Guangdong, but that has been proven wrong, a lesson that
could extend to other ITICs or red chips that run into
major financial trouble.

Two clearing houses in Europe  Euroclear of Belgium and
Cedel Bank SA of Luxembourg  said Tuesday that they had
already credited some bondholders and may now revoke those
payments, Bloomberg News reported.

GITIC was famous for its frosty relations with the central
government, one reason analysts believe it was shut down
before any other large ITICs from  other provinces. But
lenders who had hoped that Guangdong was a badly managed,  
one-of-a-kind company might want to reconsider, analysts
said. After a series of company visits, Mehdee Reza, a
Credit Suisse First Boston banking analyst, said that among
Hong Kong's bankers, "GITIC was perceived as being the most
financially sound" of the ITICs.

Banks from Japan and Germany have been named so far as the
biggest lenders to the international trusts, although
according to Basis Point, a newsletter that monitors credit
markets in Asia, the single most exposed lender to
Guangdong might have been Union Bank of Switzerland AG,
which has since merged with Swiss Bank Corp.

In March 1997, UBS undertook a $205 million floating-rate
note for Guangdong Infrastructure Ltd., which is also
controlled by the government of the southern province of

GITIC acted as a guarantor for that deal, and GITIC itself
gave UBS a mandate in August 1997 to issue a $100 million
five-year note in its name, Basis Point said.

The newsletter's editor, Stewart Man, said Basis Point had
never heard anything further from UBS about the deals, and
UBS declined to comment.

   Since GITIC was shut down, two more international trusts
from Guangdong Province have failed to meet interest

One, a company backed by the municipal government of
Guangdong's capital, Guangzhou, failed to make a payment of
a $30 million **loan** arranged by Societe Generale SA of
France. Like many of the largest lenders to the
international  trusts, Societe Generale also loaned a lot
of money to red chips and, according  to Goldman Sachs, was
one of the principal bankers of Guangdong Investment.

Another major lender to international trusts is Commerzbank
AG of Germany, which a week ago failed to receive a payment
from another international trust on a $70 million
loan(International Herald Tribune - 10/28/98)

GOLDEN BOOKS: Gets Second Chance
Golden Books Family Entertainment has negotiated a
"standstill agreement" with its bondholders, sparing it
from bankruptcy. The deal also allows Golden Books to use
its available cash to pay creditors, and have Richard
Snyder to stay on as chairman and CEO. Wall Street
observers still believe the outcome for Golden Books will
ultimately be a merger or takeover by another children-
oriented entertainment company such as Cinar Films or
Harvey Entertainment. Louise Sansregret, vice president of
communications for Cinar said she was "always open to
acquisitions" but wouldn't directly address Golden Books.
Neither would a spokesperson for Harvey.

HOMELAND HOLDING: Upbeat Despite Loss  
The Daily Oklahoman reports on October 17, 1998 that    
Homeland Holding Corp. reported Friday a third-quarter
loss, but officials were upbeat because operating earnings
increased 29 percent.

Third-quarter net loss, before amortization of excess
reorganization value, was $347,000 compared with $196,000
in third quarter 1997. That's a loss of 7 cents a share vs.
4 cents a share a year ago for the regional grocery store  
chain holding company.

For the first nine months, ending Sept. 12, the company had
net income of $970,000, or 20 cents a share, vs. $1.835
million, or 39 cents a share, a year ago. Those numbers are
excluding amortization of excess reorganization value,  
which brings the 1998 year-to-date loss to $8.8 million vs.
$8.3 million a year ago.

In 1996, the company entered a pre- arranged
reorganizational bankruptcy, emerging 60 days later with
the company owned primarily by bondholders. The company has
elected to write-off the reorganizational expenses in an  
accelerated three-year period.

"In our business, the real key is cash flow," President and
Chief Executive David B. Clark said.

The earnings before interest, taxes, depreciation and
amortization in the third quarter were $4.3 million, up
from $3.3 million a year ago. Year-to-date, the amount was
$14.9 million vs. $14.5 million a year ago.

The company's third-quarter net loss was a result of
several things, Clark said. A year ago, the company had a
tax credit. This quarter, it incurred a tax charge, he
said. And, because of four new stores, the company's amount
of depreciation increased.

The company's same-store sales declined 1.4 percent in the
third quarter, blamed on greater competitive promotional
spending and competitive store openings.  "Total sales for
the company are up, and that provides more cash flow,"  
Clark said. "We are ahead of our plans as to where we are
right now and where we thought we would be."

INCO LIMITED: Reports Third Quarter Loss of $24 Million
In a Canada Newsire report, Inco Limited reported a loss of
$24 million, or 18 cents a common share, for the third
quarter of 1998,  compared with net earnings of $5 million,
or a loss, after  preferred and Class VBN dividends, of
two cents a share, in the  third quarter of 1997. For the
first nine months of 1998, the Company incurred a loss of
$63 million, or 50 cents a share, compared with net
earnings of $79 million, or 32 cents a share, in the  
corresponding period of 1997.

Commenting on the third quarter results, Michael D. Sopko,  
Chairman and Chief Executive Officer, said that: "The
continued deterioration of nickel prices was the principal
reason for the Company's third quarter loss. Inco's  
average realized nickel price  of $2.17 per pound in the
third quarter of 1998 was the lowest  since the second
quarter of 1987. We are continuing to reduce costs and
expenses to restore our profitability in these difficult
market conditions." Nickel unit production costs decreased
by approximately 12 per cent in the third quarter of 1998,
compared with the corresponding 1997 period, with all
operations contributing to these lower costs. The Company's
results for the third quarter of 1998 were also adversely
affected by the impact of the scheduled and, in the case of
Ontario mines, extended shutdowns at its Canadian

LEVITZ FURNITURE: Gentext $26.5 M Sale Backs Out
Gentext Capital LLC offered to buy Levitz Furniture Inc.'s
fee ownership in six properties and leaseholds in two
others for $26.5 million, but has backed out of the
proposed arrangement.  Genext Capital signed on to purchase
the properties, subject to higher offers, but was unable to
find acceptable financing and walked away from the deal.  
Levitz now plans to aggressively market the properties
individually or in small groups.  The parcels included in
the proposed transaction were locations where the retailer
previously has or currently is conducting going-out-of-
business sales. (Federal Filings Inc. 28-Oct-98)

LOGAN GENERAL: Can't Pay Bills
The Charleston Gazette reports on October 24, 1998 that
Logan General Hospital has amassed land, buildings,
vehicles and other property worth more than $78 million,
but lacks the cash to pay nearly $64 million in debts, its
federal bankruptcy filing shows.

The 132-bed hospital's parent company placed it in Chapter
11 bankruptcy proceedings Thursday, to head off the
appointment of a federal receiver who would have taken over
the facility.

Chapter 11 will allow Logan General to reorganize and plan
a payoff of its numerous creditors, but could still spell
the ouster of hospital Administrator C. David Morrison and
his management team.

The filing shows that Logan General's assets include 69
buildings and parcels of land, as well as a fleet of 26
vehicles, including a 1993 limousine and two late-model
Jeep Cherokees.

Logan General also faces 10 separate lawsuits, the filing
reported, including one from a former hospital vice
president and five from doctors laid off in February.

The bankruptcy filing also shows that hospital revenues
appear to have fallen this year when compared to last
year's.  Hospital lawyers are expected to submit a plan
next week outlining how they would satisfy banks,
employees, patients, insurers and others owed money.
One of its creditors triggered the bankruptcy filing by
requesting a court- ordered takeover of the nonprofit
hospital earlier this year.

The Bank of New York cited payments missed by Logan General
on a $31.4 million bond issue involving the bank. The bank
also argued that the hospital violated the terms of the
bond agreement by transferring millions of dollars to a
for-profit sister company, Monterra Development Corp.
The bankruptcy filing shows that Monterra now owes Logan
General $29.5 million, for loans and accrued interest. A
federal grand jury is reportedly investigating the
mingling of hospital and Monterra monies.

Logan General has listed the $29.5 million among its $78.4
million in assets.

Logan General's debts include $44 million in secured
claims, held by the The Bank of New York, leasing companies
and similar creditors, and $19 million in unsecured claims,
such as medical benefits owed employees and refunds owed  
patients and insurers.

NEWSTAR RESOURCES: Announces Corporate Changes
The Canada Newswire reports on October 26, 1998 that  
Newstar Resources has mailed a notice of meeting and a
management information  circular to its shareholders  
in connection with a special meeting  to be held on
November 23, 1998 to consider approval of a plan of  
arrangement. The plan of arrangement contemplates: (a) the  
continuance of Newstar from the laws of Ontario to the  
laws of the  State of Delaware; (b) the change of Newstar's
corporate name to "Newstar Oil & Gas, Inc.", or such other
name as may be acceptable to applicable regulatory
authorities; and (c) the consolidation of  the issued and
outstanding common shares of Newstar on a basis of  not
greater than one for five.

The plan of arrangement is being proposed to better reflect  
Newstar's activities as a U.S. based oil and natural gas  
exploration and production company. Management believes
that the plan of arrangement will: (a) eliminate potential
future tax  problems; (b) facilitate the completion of
potential  mergers,  acquisitions and divestitures; and (c)
enhance Newstar's ability to complete future financings in
the United States.

The proposed plan of arrangement, if completed, will not  
involve any change in Newstar's business, management,
location of  principal offices or other facilities, assets
or liabilities, and  each shareholder's percentage
ownership  of shares of Newstar will remain the same.

In addition to shareholder approval, the plan of
arrangement is also subject to the receipt of a final order
from the Ontario Court of Justice (General Division) and to
all necessary regulatory  approvals.

Michigan-based Newstar Resources Inc. is an oil and gas  
exploration and production company with operations in
Michigan,  Ohio and Texas. The company trades on the NASDAQ
National Market System under the symbol NERIF and the  
Toronto Stock Exchange under the symbol NER.

NOMURA SECURITIES: Shareholders and Former Execs Agree
Kyodo News reports on October 27, 1998 that shareholders
and six former executives of Nomura Securities Co. reached
a compromise Tuesday at the Tokyo District Court
in a  damages suit against the executives concerning their
illegal payoffs to "sokaiya" corporate racketeers.

The case was settled on condition that Hideo Sakamaki, 63,
former Nomura president, and five others pay a total of 380
million yen to the company in compensation for losses
caused by unlawful payoffs.  It will be the highest amount
of compensation ever paid to a company by corporate
executives in such suits, according to the plaintiffs.

In the suit, shareholders claimed the brokerage giant
suffered losses of about 370 million yen paid to
extortionist Ryuichi Koike, 55, in 1995 in exchange for
not disrupting the company's shareholders meeting.
The Commercial Code prohibits companies from giving
financial favors to corporate racketeers.

The plaintiffs also maintained that the company marked a
loss of about 57 million yen in profits from brokerage
commissions after local governments such as Tokyo and
Yokohama stopped entrusting Nomura with lead managing
municipal bonds for public offerings following the payoff

The six former executives will pay 200 million yen of the
compensation money by Nov. 30, and the remaining 180
million yen will be paid by the indicted three  
on a 20-year installment plan.

POCKET COMMUNICATIONS: Lenders Amend Plan To Give FCC Cash
Pocket Communications Inc.'s lenders amended their joint
reorganization plan for the wireless communications company
after the Federal Communications Commission asked them to
reframe their proposal to provide an all cash payment for
Pocket's 43 C-block licenses instead of the financing set
forth in a March 16 term sheet, the basis for the lenders'
amended plan.  The proposed settlement calls for the FCC to
accept cash in an amount left blank in the disclosure
statement and plan, as payment in full for the 43 wireless
licenses that Pocket's DCR PCS Inc. unit won at the 1996 C-
block auction. (Federal Filings Inc. 28-Oct-98)

SOUTHERN PACIFIC FUNDING: Trustee Names Creditor Panel
The U.S. Trustee has appointed an official committee of
Southern Pacific Funding Corp.'s unsecured creditors:
Mariner Investment Group (chair); Conseco Capital
Management; Helix Investment Partners L.P.; Forest Fulcrum;
Hacienda Property Valuation; and Bank of New York (ex
officio member). The panel has retained Munger Tolles &
Olson LLP as counsel.  (The Daily Bankruptcy Review
Copyright c October 28, 1998)

STREAMLINE INDUSTRIES: Carlyle Proposes Acquisition
Carlyle Industries Inc. announced that its subsidiary,
Blumenthal Lansing Company Inc., has offered to acquire the
assets of Long Island, N.Y.-based Streamline Industries
Inc., a buttons packager and distributor that filed for
chapter 11 protection, according to a newswire report. The
proposal is subject to the bankruptcy court's approval.
(ABI 28-Oct-98)   

UNITED COMPANIES: Says Building Sale Routine
United Companies Financial Corp., whose prospects have
dimmed amid tightening credit in financial markets,
recently sold a building in its Baton Rouge office park for
$18.7 million.

But the home lender gave no indication Friday that hunger
for cash spurred the Sept. 30 sale of the upscale building,
Two United Plaza, which has a prominent spot in the tree-
lined office park off Essen Lane that the company  
first began developing two decades ago.   Terrell Brown,
the company's chairman and chief executive, issued a  
statement saying the sale was a routine investment

"We constantly review our investments and have considered
selling this property many times over the past two or three
years. We've received many offers during this time, but
this bid was particularly attractive," he said.  "We
determined that the capital gained from the sale of the
building would bring a greater return if it were redeployed
into our core business," he said.

He described the sale as a "very profitable transaction,"
and suggested it was keyed to local real estate market
conditions. "There is a Class A office space shortage in
this city," he said.  The company sold the building to
Stirling United Properties LLC, a company formed by Edward
Songy, president of a Covington real estate company.
Stirling has already paid $1.9 million, and the remainder
of the $18.7 million price is to be paid in installments,
with interest, by next June 29.

Stephanie Dixon, director of investor relations for United
Companies, said the 10-story building houses only a few
offices used by the company. Tenants in the 15-year-old
building, at 8550 United Plaza Blvd., include law firms and  
investment and insurance companies.  United Companies,
which has headquarters at One United Plaza, still owns  
31/2 of the 12 buildings in the park, she said.

United Companies makes home equity loans to people
considered high-risk, then sells the loans as securities.
Like most of its competitors, United Companies' stock has
plummeted recently amid concerns that it may not have
enough capital to continue making loans.  Recent turmoil in
the world's financial markets has aggravated the problem by
making banks wary of lending to companies perceived as
risky, analysts say.  On Friday, Standard and Poor's
dropped ratings of the company's senior unsecured debt
ratings to BB-. It cut its rating of United Companies'
preferred stock to B-.

The common stock, which last month hit a five-year low of
$6.50, closed Friday at $4.88, down 2.5 percent from the
day before.  The subprime lending industry's troubles are
widespread. Two of United Companies' competitors filed for
bankruptcy protection from creditors in the past month.

Over the last year, analysts have questioned the accuracy
of the "gain-on-sale" accounting method used by United
Companies and other subprime lenders.  Steven Eisman,
analyst for CIBC Oppenheimer, says the method lets
companies overlook risks in their loan portfolios, and that
scares investors.  "Wall Street is closed for business with
these companies," Eisman said Friday. "Nobody trusts the

The accounting method was one reason Standard & Poor's
cited in downgrading the company's securities.  But Dixon
said United Companies follows rules set by the Financial
Accounting Standards Board, and the company considers its
accounting accurate and appropriate.  She also disputed
Eisman's suggestion that Wall Street is not doing business
with United Companies, which sells pooled home equity loans
as securities.  (Copyright 1998 by Capital City Press
Advocate Baton Rouge - 10/24/98)

VENTURE: Hearing Set for Plan Confirmation
Venture Stores, Inc., debtor, published a notice in The
Wall Street Journal, October 28, 1998, stating that on
October 16, 1998 an order was entered approving the
Disclosure Statement for the debtor's First Amended Plan of
Liquidation under Chapter 11 of the Bankruptcy Code.  A
hearing will be held on November 23, 1998 at 12:00 p.m. to
confirm the plan.  Objections must be filed so that they
are received no later than November 16, 1998.

WESTERN DIGITAL: Reports 1st Quarter Net Loss of $110M
Western Digital Corporation (NYSE:WDC) reported revenue of
$651 million for its first quarter ending September 26,
1998. The Company reported a net loss of $110.2 million or
$1.24 per share, excluding special charges of approximately
$85 million. Including the special charges, the Company had
a net loss and net loss per share of $194.7 million and
$2.20, respectively. In the year ago period, Western
Digital reported revenue of $1.09 billion, net income of
$62.7 million, and diluted earnings per share of $.67.

Addressing the first quarter's performance, Chuck Haggerty,
chairman, president and chief executive officer of Western
Digital, stated: "The September quarter operating
performance reflects tough -- albeit improving --
conditions in the desktop HDD industry, as well as some
solid progress in the operations at Western Digital.
Pricing remains competitive in the desktop space as the
industry works off what is hopefully the last of its excess
inventories. We continue to see improving demand from the

"The key to our return to profitability is restoring our
desktop business to market leadership," said Haggerty.

"We have also maintained an intense focus on asset
management," said Haggerty.  "The cash balance at quarter's
end was $404 million, reflecting improved working
capital management in a very challenging environment. Our
total inventory turns improved to 16. This included a
reduction of in-house finished goods as well as
our inventory in the distribution channel.

"The focus in the quarters ahead will be on execution of
new product programs in both the desktop and enterprise
segments of our business, converting qualifications into
primary supplier positions at top PC OEMs, and continued
focus on improved asset management."

Western Digital designs and manufactures hard drives for
personal and enterprise-wide computing, and markets them to
leading systems manufacturers and selected resellers under
the Western Digital brand name.

ZENITH ELECTRONICS: Reports 3rd Quarter $119m Net Loss
Zenith Electronics Corporation reported a third-quarter
1998 net loss of $119 million, or $1.76 per share,  
including a restructuring charge of $100.4 million. In the
1997 third quarter, including a $10 million asset
impairment charge, Zenith reported a net loss of $69.2
million or $1.04 per share.

Excluding restructuring and asset impairment charges,
Zenith's third-quarter loss narrowed to $18.6 million from
$59.2 million a year ago. Total third-quarter sales were
$230 million in 1998 and $305 million in 1997.
Consumer electronics sales declined in the quarter,
reflecting planned sales reductions in lower-margin color
TVs and changes in VCR distribution, while sales of  
Network Systems products increased from the 1997 quarter.

For the first nine months of 1998, Zenith reported a net
loss of $187.8 million, or $2.78 per share, including
restructuring charges of $107.8 million. For the same
period last year, the net loss, including the $10
million asset impairment charge, was $143.7 million, or
$2.16 per share. Nine-month sales were $675 million in 1998
and $825 million in 1997.

As announced on May 21, the company is undertaking a
comprehensive restructuring plan designed to reduce its
debt, enhance its competitiveness and de-emphasize
manufacturing. During the third quarter, the company
identified sourcing partners for key components and
finished goods for 1999, representing a cornerstone of the
plan to position Zenith as a marketing and technology  

In conjunction with its operational restructuring, Zenith
is planning to restructure its debt through a prepackaged
chapter 11 reorganization. The proposed plan is expected to
be filed around the end of the year.  The Securities and
Exchange Commission review process of Zenith's S-4
registration statement is underway.

Zenith, based in Glenview, Ill., is a long-time leader in
consumer electronics.  Zenith's largest stockholder is LG
Electronics Inc., a global leader in electronics with
operations in 180 countries and annual sales of more than
$10 billion.


The Meetings, Conferences and Seminars column appears in
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Debra Brennan and Lexy Mueller, Editors.   

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