TCR_Public/990104.MBX T R O U B L E D   C O M P A N Y   R E P O R T E R
   Monday, January 4, 1999, Vol. 2, No. 255


AHERF: Creditors Assert Claims on Insurance Policies
AMERITRUCK: Sale of Certain Assets To Solana Trading
CAL AMERICAN: Accountant Can Be Sued For Bad Audit            
CML GROUP: Final Hearing On Sale of Smith & Hawken Shares
CUSTOM TEXTILES: Plant Permanently Ceases Operations

DOW CORNING: Nevada Court Lowers Award
GRIFFIN TRADING: Files Chapter 7
HOOTERS: Manhattan Location Files Chapter 11
JOTAN INC: Committee Taps Miller, Canfield
JUMBOSPORTS: Still Open After Filing Chapter 11 Petition

LACLEDE STEEL: $85M DIP Credit Pact Has Final Okay
MERCURY FINANCE: Reports Amended Plan
MESA AIR: Notification Of Late Filing
ONCOR: President and CEO Resigns
PERFORMANCE CAPITAL: Judge Agrees To Appoint Trustee

PHYSICIANS RESOURCE: Developments Regarding Company Debt
PITTSBURGH PENGUINS: Players' Group May Take Control
PITTSBURGH PENGUINS: Ticketmaster Pact Still In Doubt
QUADRAX CORPORATION: Current Report Filed With SEC

RUTHERFORD MORAN: Reports Merger Agreement
SCHWEITZER MOUNTAIN: Harbor Resorts Reports Acquisition
SOUTHLAND CONTAINER: Committee Taps Miller, Canfield
STAR NEWCO: Seeks To Extend Exclusivity

TECHNIMAR INDUSTRIES: Response to Motion to Dismiss
UNISON HEALTHCARE: Files Quarterly Report
WILLIAMS BAY TRADING: Bank One Ordered To pay $2M


AHERF: Creditors Assert Claims on Insurance Policies
Creditors of Pennsylvania's Allegheny Health System, which
filed for chapter 11 in July, yesterday staked claim to
liability insurance policy money covering Allegheny’s
Board of Directors and Officers, policies that Allegheny
had quadrupled in value from $50 to $200 million in the 12
days prior to its bankruptcy filing, according to The
Philadelphia Inquirer. The creditors took action after U.S.
Bankruptcy Judge M. Bruce McCullough gave permission on
Tuesday to investigate the actions of the directors and
officers; the committee representing Allegheny’s
approximately 65,000 unsecured creditors is targeting "the
wrongful acts of certain of the officers and directors
[that] resulted in losses in excess of $1 billion." The
insurance policies were put in place to protect against
claims brought for malfeasance or mismanagement for the
directors' and officers' respective roles in running the
company. The creditors took action yesterday in case the
coverage was to expire today.  Also yesterday, lawyers
representing Health America Pennsylvania Inc. and Coventry
Health Care Inc. named 54 present and former Allegheny
trustees and executives as defendants in an as-yet-unfiled
civil complaint. The two health insurance companies, which
are among Allegheny's creditors, claim "significant losses
arising from the failure of Allegheny and its affiliates to
fulfill their contractual obligations," said Neal D.
Colton, who is representing the insurance companies.
"Allegheny has acknowledged that its insurance coverage for
officers and directors is likely to expire at the end of
the year, and accordingly, Coventry and Health America want
to preserve any and all sources of recovery which may be
available." Allegheny Health System filed for protection
for nearly all of its eastern Pennsylvania operations,
citing debts that were later totaled at $1.5 billion. Since
then, eight of its bankrupt Philadelphia-area hospitals
have been sold. (ABI 31-Dec-98)

AMERITRUCK: Sale of Certain Assets To Solana Trading
The debtors, AmeriTruck Distribtuion Corp., et al, seek
court authorization for the sale of certain of the debtors'
assets to Solana Trading of Florida, Inc.

The debtors request authority to sell 489 trailers to
Solana.  The trailers are encumbered by first liens
asserted by FINOVA Capital Corporation, Navistar Financial
corporation, Volvo Commercial Finance Inc. and Associates
Commercial Corporation.  The total purchase price for the
trailers is $5,563,000.  For each trailer, the proposed
purchase price is equal to 100% of the orderly liquidation
value determined by Taylor & Martin, Inc., appraiser.

The debtors state that they are working with the Official
Committee of Unsecured Creditors to propose a consensual
plan of reorganization as soon as possible, ideally in the
next thirty to sixty days.  The debtors' business judgment
for consummating the sale is supported by the fact that the
sale will facilitate the debtors' plan of reorganization
providing cash as an additional source for distributions
under such a plan.  The Buyers reserve the right to
terminate the Agreement if the court does not approve the
sale on or before January 15, 1999.

CAL AMERICAN: Accountant Can Be Sued For Bad Audit            
The Journal of Commerce reports on December 31, 1998 that
professional liability insurance costs could rise as a
result of a California appeals court ruling against
accounting firm Arthur Andersen.

The three-member Second District Court of Appeals in Los
Angeles unanimously ruled against the accounting firm,
which had argued that it could only be sued by clients and
others that may rely on its audits, but not by the state  
Insurance Department.

The case arose from Arthur Andersen's 1991 audit of the
now- defunct Cal-American Insurance Co. The accountant's
audit did not show that the auto insurer was covering up
its insolvency by inflating its assets and shifting
liabilities to related companies.

The department discovered the insurer's subterfuge in 1993,
took over the company, liquidated it and subsequently filed
suit against Arthur Andersen in Los Angeles County Superior

The Insurance Department said it routinely relies on audit
opinions to monitor insurance companies. California
Insurance Commissioner Chuck Quackenbush said his
department would have moved on the company sooner had the  
Arthur Andersen audit reported the insolvency.

In its ruling, the appellate court held that "the Insurance
Commissioner, in his capacity as liquidator of Cal-
American's estate, may recover from Arthur  Andersen on
behalf of the liquidation estate (for the benefit of
policyholders  and others having claims against the
liquidation estate) for damage caused to  the liquidation
estate by negligent misrepresentation in Arthur Andersen's  
audit report."

The Chicago-headquartered accounting firm's case relied on
the 1992 California Supreme Court ruling in Billy vs.
Arthur Young & Co. In that case, the high court limited who
could sue an auditor for negligent misrepresentation to
clients and others "who act in reliance upon those
misrepresentations in a transaction which the auditor
intended to influence."

Arthur Andersen maintained that it had not intended to
influence the Insurance Department. The accounting firm
claimed the only people who could be expected to rely on
the audit, Cal-American's officers, already were aware of  
the insurer's financial problems and concealed that fact
from auditors. Arthur Andersen also argued that it could
have had no liability for a negligent audit unless it
caused damage to the value of Cal- American. The  
accountant said Cal-American already was insolvent when the
audit was conducted, rendering it impossible to further
damage the company's value.

Arthur Andersen's lawyer Michael Hennigan said that an
appeal is in the works, but is not optimistic about its
success. "Frankly, we realize it's a long shot, given the
fact that the Supreme Court refuses to hear far more cases
than it actually takes on," said Mr. Hennigan, partner at
Hennigan, Mercer & Bennett in Los Angeles.

A Los Angeles-based insurance attorney said the importance
of the case could come later if professional liability
insurers decide to raise rates as a result of higher costs
-- and not just for accountants.

"I believe accountants and perhaps others that buy
professional liability insurance could end up paying more
for their coverages if courts continue to expand the roster
of parties entitled to rely on a professional's advice as
the appellate court has done in this case with the
department of insurance," said Royal Oakes, partner at
Barger & Wolen.

American Insurance Association Vice President Mark Webb
said that while it's difficult to predict pricing trends,
"it appears that premiums could rise if the ruling in this
case becomes a precursor for similar decisions in future  
litigation." If this trend continues, Mr. Webb warned,
"then accountants could find themselves exposed to
increased liability and increased insurance costs. At  
least in theory, this decision could affect insurance
pricing and liability for a wide range of professional
service providers including lawyers, architects  
and engineers, real estate agents, and insurance agents,
not to mention accountants and actuaries."

CML GROUP: Final Hearing On Sale of Smith & Hawken Shares
On February 1, 1999 at 2:00 the debtor, CML Group, Inc.
shall hold an auction to sell the debtor's common stock of
its wholly-owned subsidiary Smith & Hawken, Ltd., and the
Intercompany Debt.  The Auction procedures motion seeks
authority to sell the shares of stock and the Intercompany
Debt to the highest and best bidder at the Auction.

CUSTOM TEXTILES: Plant Permanently Ceases Operations
After the Bessemer City, N.C.-based Custom Textiles plant
had already stopped production, the company filed chapter
11 on Dec. 15, The Charlotte Observer reported. Custom
Textiles will permanently shut down, and the company
believes that selling all of its equipment will provide
enough money to pay its creditors, including approximately
$170,000 in utility service owed to Bessemer City. The
company's financial problems are blamed on a 1997 fire that
forced the company to change the location of its
operations, and the company remains in litigation over
claims that it received no fire insurance money.(ABI 31-

DOW CORNING: Nevada Court Lowers Award
The Nevada Supreme Court reduced a woman's $14.2 million
award in a breast-implant case to $4.2 million Thursday,
saying there was no evidence Dow Chemical tried to conceal

However, the court affirmed the jury's decision that the
silicone implants made the woman sick.

Charlotte Mahlum of Las Vegas, who claimed her leaking
implants caused a host of health problems, was awarded $10
million in punitive damages and $4.2 million in
compensatory damages in 1995.

But the court ruled 4-1 she was not entitled to punitive
damages, which require proof of fraudulent concealment. In
a 3-2 vote, it kept intact the compensatory damages
pertaining to pain and suffering, with two justices  
claiming Mahlum and her husband, Marvin, deserved nothing.

"This decision of the Nevada high court, which affirms the
jury's verdict that silicone gel can cause disease in
women, will resound across the nation," he said.

Dow Chemical spokesman John Musser said the company was
"extremely disappointed that the court has decided to allow
a verdict to stand that was so heavily influenced by
emotion rather than facts or medical evidence."

Earlier this year, a scientific panel appointed by a
federal judge to review conflicting scientific claims about
implants found that no definite links existed between
implants and disease.

Mahlum claims the implants, which she had removed, caused
brain lesions, nerve damage, blotchy skin, aching, memory
problems and seizures. Justice Bob Rose said the recent
scientific findings did not matter. "The Mahlums' complaint
was not tried in the court of scientific opinion, but
before a jury of her peers who ... concluded that Dow
Corning silicone gel breast implants caused her injuries,"
he said.

Nonetheless, Musser said he was glad the court eliminated
the punitive damages saying there was "no evidence anyone
at Dow Chemical ever suspected, much less believed, breast
implants were likely to injure anyone."

The maker of the implants, Dow Corning Inc., went into
bankruptcy over the thousands of legal claims made against
it regarding the implants. Dow Chemical owns 50 percent of
Dow Corning, once the biggest maker of siliconegel breast  

It recently offered to pay $3.2 billion to an estimated
170,000 women to settle the lawsuits.

GRIFFIN TRADING: Files Chapter 7
Futures World reports on  12/31/98 that Griffin Trading, a
former clearing member of the Chicago Board of Trade (CBT),
has filed for Chapter 7 bankruptcy after a trader  
exceeded his authorized trading limit, according to a story
published in the Financial Times today.

The story said independent trader John Park, who cleared
his trades through Griffin, was trading bonds when he
exceeded the authorized trading limit and did not have
enough funds to cover the open positions once the market
turned against him.

Chapter 7 allows a trustee to be appointed to run the firm
and "had become the `only viable option,'" according to the
Financial Times. They added Griffin was "out of compliance
with various regulatory agencies" in both the United States
and Europe with no chance to add the needed funds to cover
the European losses.

Another firm has taken over Griffin's business at both the
CBT and the Chicago Mercantile Exchange.

HOOTERS: Manhattan Location Files Chapter 11
After being open a little more than a year, the  
Manhattan "Hooters" has filed Chapter 11 bankruptcy
according to The New York Times. The restaurant, known for
its waitresses who wear push- up bras and very  short
orange skirts, is losing 30-thousand dollars a month. Some
think  Manhattan's high rent, regulations, loads of
competitive restaurants and the  access to more scantily
clad woman is doing Hooters in. The restaurant chain says
it has more than 200 successful locations elsewhere. But
Hooters didn't make it in Buffalo, either. (UPI; 01/02/99)                                

JOTAN INC: Committee Taps Miller, Canfield
The Official Unsecured Creditors' Committees of the
debtors, Jotan Inc. and Southland Container Packaging Corp.
apply for entry of an order authorizing the employ of
Miller, Canfield, Paddock and Stone, PLC as their counsel.

The debtors are both in the business of distributing
packaging and shipping supplies through service and
distribution centers located throughout the US.  Their
primary businesses are located in Jacksonville, Florida.

The Committees consist of the same three members: Stone
Container Corporation, Jefferson Smurfit Corporation and
Gaylord Container Corporation.

Miller, Canfield's proposed services will include:

Investigation of the validity, perfection and priority of
the Banks' asserted secured claims and possible objection
thereto; investigation of causes of action that the debtor
and the estate may have against third parties under Chapter
5 of the code; participation in the formulation of a plan;
requesting the appointment of a trustee or examiner, or
request of conversion to a Chapter 7; objection to claims;
and representation of the Committees in Court.

A $20,000 carve-out was agreed to by the banks for fees and
expenses of counsel for the committee in the Jotan case.

JUMBOSPORTS: Still Open After Filing Chapter 11 Petition
Tucson's JumboSports store remains open after the sporting
goods facility's parent company filed Chapter 11 bankruptcy
late Sunday.

"Presently business will continue as is, with no impact on
daily operations," said Rachel Nelson, director of
communications for JumboSports Inc. based in Tampa, Fla.

She said the firm's 52,000-square-foot store at 7255 E.
Broadway employs 45 full- and part-time employees. The
facility opened in early 1995, she said.

Nelson said JumboSports plans to file a reorganization plan
with Bankruptcy Court in Tampa in the next few weeks.
"It is too early to know which if any stores will be
affected by the reorganization plan," she said. "The
company has closed stores in the past, and it is a

She said two Phoenix-area stores were shuttered earlier
this year. The Tucson facility is the firm's only remaining
Arizona presence, she said.  Nelson said JumboSports grew
dramatically in the early and mid- 1990s and now includes
59 stores in 23 states, primarily in the Southeast. She
said the reorganization was prompted by strong competition
among retailers in quality, name brand athletic equipment,
apparel and footwear. Jack Bush, JumboSports' chairman and
CEO, said in writing: "This allows us to call a `time out'
with our creditors while we work to develop a plan or
reorganization that puts the company back on the right
track with a reduced debt burden and improved

Calls made yesterday to the Tucson store to discuss the
reorganization were referred to corporate headquarters in
Tampa.  Trading of JumboSports stock was halted on the New
York Stock Exchange yesterday after the restructuring
announcement. The firm's stock had been traded under the
JSI ticker symbol, she said. It last sold at 1/8. Arizona
Daily Star - 12/29/98

LACLEDE STEEL: $85M DIP Credit Pact Has Final Okay
The U.S. Bankruptcy Court in St. Louis has given final
approval to Laclede Steel Co.'s $85 million debtor-in-
possession credit agreement with BankAmerica Business
Credit Inc. as agent. When the steelmaker filed for Chapter
11 on Nov. 30, about $71.6 million, plus accrued interest
and fees, was outstanding under a $95 million prepetition
facility from BankAmerica, BNY Financial Corp., and
NationsBank N.A. The DIP facility provides immediate
additional availability of $5.1 million, and that amount
could top $13 million as the collateral that comprises the
borrowing base increases, Laclede said. The company will
reduce the prepetition debt to the negotiated amount of
$37.3 million, "which shall remain frozen as a pre-petition
secured claim, subject to reduction upon the disposition
of fixed assets of the Debtors." The DIP agreement calls
for monthly adequate protection payments of $355,000 to the
lenders in respect of the $37.3 million prepetition
claim. The DIP agreement, which runs through Dec. 31, 1999,
requires Laclede to pay the lenders a $210,000 funding fee,
a collateral management fee of $10,000 per month, and a
facility fee of 0.5 percent on the unused portion.
The Daily Bankruptcy Review and ABI Copyright c December
31, 1998.

MERCURY FINANCE: Reports Amended Plan
In a Form 8K filed with the SEC on December 29, 1998,
Mercury Finance Co. reports two press releases issued on
December 22, 1998, as follows:

Mercury Finance Announces Amended Reorganization Plan
CHICAGO,  Dec.  22 /PRNewswire/-- Mercury  Finance Company  
(OTC Bulletin  Board:    MFNNQ) today  announced  that  the  
Company and  the committees  representing  the  creditors,   
the  class  action  security claimants, and the
shareholders in  its chapter 11 case have  reached an
agreement to amend the reorganization plan earlier filed
with the court. It is expected that the amended plan will
be presented to the court in an amended disclosure
statement on December 28, 1998. Assuming court approval of
the amended statement, the reorganization plan is expected   
to be ready for court confirmation hearings in February,

"We are pleased that the parties have reached  this  
amended agreement so that the necessary financial
restructuring process can move forward,"  said William  A.
Brandt,  Jr., president and  chief executive officer of
Mercury.   "The amended disclosure statement and the plan
of reorganization, if approved by the court, will relieve  
the Company of the  burdens  of  its present  debt  
structure  and  will allow  current shareholders  to get  
some  limited recovery  on  their investment.   A
successful restructuring will also provide  the Company  
with  a sound financial platform from which to operate the
business and seek to return to profitability."

Under the new agreement, senior lenders would receive 95
percent of the equity of the reorganized company and notes
equal to 75 percent of the amounts owed to them.  
Shareholders would receive five percent of the equity and  
warrants to purchase additional stock at certain specified
prices.  Securities claimants would receive cash and  the
rights from certain litigation claims against third parties
made by the Company.

Mercury has continued its business  operations  throughout
the chapter 11 case.  The Company continues to do business
from its branch offices nationally and to pay all trade
obligations and dealer contracts
in the ordinary course without interruption.

Summary of Terms
Subject to the approval by the bankruptcy  court,  the  
main provisions of the amended  disclosure  statement  and
the plan of reorganization include the following terms:

--   The Company's senior lenders receive 95 percent of the
initial  equity in the reorganized company and  new secured
notes equal  to 75 percent of the face value of their

-- The current shareholders receive five percent of the
shares of the new common stock and warrants to purchase an
additional 17.4 percent  of  the stock.    The exercise  
prices of  the warrants, valid  for three, four and five  
years, are expected to be significantly in  excess of the
initial market  price of               the new stock.

-- The class action securities claimants receive $5  
million in cash  and the right to certain litigation claims
against third parties made by the Company.

This general summary of terms is not meant to be complete.  
The full text of the Amended Disclosure Statement and Plan
of Reorganization will be filed with the U.S. Bankruptcy
Court  for the Northern District of Illinois.



Mercury Finance Issues Clarification of Earlier

CHICAGO, Dec. 22/PRNewswire/ -- Mercury Finance Company
(OTC Bulletin Board:  MFNNQ) issued the following
clarification of its announcement released earlier today
under the headline, "Mercury  Finance Announces Amended
Reorganization Plan."  Within the section of the earlier
release that was entitled "Summary of Terms," the
first item is amended and clarified by the addition of the
words within single quotes:

"- - The Company's senior lenders receive 95 percent of the
initial equity in the reorganized company, 'a certain
amount of surplus available cash,' and new secured notes
equal to 75 percent of the face value of their claims
'after the payment of the available cash.'"

MESA AIR: Notification Of Late Filing
Mesa Air Group, Inc. reports to the SEC that additional
time will be needed for the company's management and
accountants to complete the preparation and review of the
Registrant's Report on Form 10-K for the period ended
September 30, 1998. The additional time required to prepare
and review the Registrant's Report on Form 10-K is due, in
part, to the fact that certain members of the Registrant's
management team responsible for preparing portions of the
Report on Form 10-K have, only recently, become employees
of the company.

ONCOR: President and CEO Resigns
Oncor Inc. said that Cecil Kost, the company's president
and chief operating officer, will resign effective December
31, 1998.

Kost joined Oncor in 1996. In March of this year, the
company ousted founder and Chief Executive Officer Stephen
Turner after reporting that it might not have enough cash
to continue operations more than a few months, and began  
selling some revenue-producing divisions to raise cash to
pay creditors.

Oncor has sold all its technology assets -- including a
cancer test it had hoped would salvage the company -- and
laid off all but about 15 employees. Jose Coronas, chairman
of the Gaithersburg firm, said a management consultant  
has been hired by Oncor to oversee operations, and the
company is looking for someone to replace Kost.

PERFORMANCE CAPITAL: Judge Agrees To Appoint Trustee
After an emergency appeal by the California Department of
Corporations, U.S. Bankruptcy Judge Robert Alberts agreed
Tuesday to appoint a trustee to oversee last week's chapter
11 filing of Newport Beach-based Performance Capital
Management, according to The Orange County Register.
Performance's leaders who were accused of fraud were
removed by Judge Alberts, who said the trustee appointment
would best protect Performance's more than 2,000 investors,
whose funds total nearly $58 million. The company, which
specializes in buying delinquent debt and selling it to
investors, may require several trustees to handle the
conflicts of interest among Performance and its affiliates,
nine of which also filed chapter 11. (ABI 31-Dec-98)

DEC 30, 1998, M2 Communications - Philippine president
Joseph Estrada is hoping to tap into Japan's US$30bn fund
for ailing Asian economies as a last resort to save
Philippine Airlines from folding, and on December 28
formally requested that the Japanese government make a loan
of US$150m under the Miyazawa Fund through the Japan
Export-Import Bank. However Finance Secretary Edgardo
Espiruto said it is unlikely that the government will be
able to bail the airline out and he believes it more than
likely that the airline will be forced to close.

The President is hoping that talks between Cathay Pacific
and PAL will recommence and save the airline. Talks with
Cathay and Northwest Airlines are currently continuing in
private. Apparently some other businesses are also
interested in the bailout plans. One of these is the state
pension fund, Social Security System, which claims it is
willing to invest up to US$25.7m in PAL if the airline can
clean up its balance sheet. In further news, a petition has
been put in by the Sycip, Salazar and Hernandez and
Gatmaitan Law Offices on behalf of their clients to gain an
extension until January 24 to submit their comments about
the PAL remediation plan.

Other creditors have already submitted comments. The
Airline Pilots Association of the Philippines has also
submitted comments and has rejected the PAL plan. In a
five-page document to the Securities and Exchange
Commission, the Union declared itself unhappy with the
plan's dependence on securing a strategic partner, the lack
of an employee plan, and the unjustified reduction of the

PHYSICIANS RESOURCE: Developments Regarding Company Debt
Physicians Resource Group, Inc. (NYSE: PRG) today announced
that NationsBank has agreed not to take any action prior to  
January 11, 1999 with respect to its $9.5 million loan to
the Company due December 31, 1998.  The Company continues
to work with NationsBank and the individual guarantors of
the NationsBank loan to obtain an acceptable arrangement to
permit the Company to pursue its restructuring.  As a
result of the continued default on the NationsBank loan,
the Company is restricted under applicable subordination
provisions from paying interest due on December 1, 1998 on
its outstanding $125 million 6% Convertible Subordinated
Debentures due  2001.  The maturity of the Debentures could
be accelerated by the Debenture Trustee or holders of 25%
aggregate principal amount of the Debentures after today as
a result of such non-payment.

PRG is a provider of physician practice management services
to eye care practices and the company operates ambulatory
surgery centers.

PITTSBURGH PENGUINS: Players' Group May Take Control
The Pittsburgh Penguins, which filed for chapter 11, may be
taken over by a group of investors for one of its players,
the Pittsburgh Port Gazette reported. Penguin Mario
Lemieux's group hopes to gain control of the Penguins
without paying anything to the team's current owners, a
move that would enable the group to pay off or refinance
the team's secured debts. Although the Penguins have
exclusive rights to file their reorganization plan until
Feb. 10, the team can extend the deadline if the
proposal is not complete, but Lemieux's group hopes to gain
control of the franchise before it is no longer under
bankruptcy protection. Penguins co-owner Howard Baldwin,
who supports Lemieux's move, said, "Having local ownership
is nothing but a positive. My personal opinion is, the
situation cries out for local investors." (ABI 31-Dec-98)

PITTSBURGH PENGUINS: Ticketmaster Pact Still In Doubt
A judge yesterday refused to exempt the Penguins' long-term
contract with a ticket agency from the murky uncertainty of
its bankruptcy proceedings.

The team had asked U.S. Bankruptcy Judge Bernard Markovitz
to guarantee continuation of a contract with Ticketmaster-
Pittsburgh Inc. that was scheduled to run through October
2004. But Markovitz, for the time being, has sided with
Penguins creditors who wanted to leave the team's options

Philip Uher, attorney for the team's unsecured creditors,
said he didn't think that a long-term agreement with
Ticketmaster was appropriate before the team came up with a
financial reorganization plan.

"Ticketmaster may not be the only option," he said.

When the Penguins filed for bankruptcy protection in
October, all of its contracts were put in a sort of legal
limbo, to be continued or dissolved based on court rulings
and the team's financial reorganization plan.   The
Penguins sought to preserve the Ticketmaster deal, they
said, because they are making money from it. Team attorney
Robert G. Sable said it made sense to affirm the deal.

Markovitz didn't see it that way.

"I'm missing the "making sense" part," the judge said.

Sable said the team gets $75,000 a month from Ticketmaster.
The team's contract with the ticket agency runs through
Oct. 31 and then for another five years if the team does
not pull out of it. Ticketmaster gets $3.50 for each ticket
sold at a Ticketmaster outlet and $3.75 for each ticket
sold over the phone. The agency also provides a computer  
program that keeps track of ticket sales.

"This is our inventory control. Anybody who would come in
would need this software," Sable said. "I can't imagine
anyone would not want to assume this contract."
Ticketmaster was not represented at the hearing. When the
judge asked about the company, Sable said the company's
lawyer was on vacation and not available.

Uher asked the judge to wait to decide on the matter and
the judge agreed that he would. He said the company was
protected because it is taking its money off the top
from ticket sales, so there was no threat of the company
not getting paid. In the fall, when the team was struggling
to meet its payrolls, the team had asked the judge to keep
the Ticketmaster contract, and had asked for permission to
pay the agency an advance deposit, Sable said after the
hearing. Back then, he said, it made sense to protect
Ticketmaster because of the threat of canceling games if
the team couldn't pay its players.

That is no longer a threat because the team has a $20
million loan to see it through the season.

Sable said he wanted the judge to look at the issue again
in February, when the team starts selling tickets for next
season. Pittsburgh Post Gazette -12/30/98

QUADRAX CORPORATION: Current Report Filed With SEC
In a current report filed with the SEC Quadrax Corporation
(the "Company") as a debtor under Chapter 11 of the United
States Bankruptcy Code in the United States Bankruptcy
Court for the District of Rhode Island reports that it has
begun an ongoing process of the disposition of certain of
its assets. The Company began the first phase of this
process in an auction of a portion of its Portsmouth, Rhode
Island plant equipment held on December 10, 1998. A second
auction of equipment from the Company's Vista, California
plant was held on December 16, 1998. Equipment sold
includes some of its tape lines used in the manufacturing
of raw materials and office equipment and supplies used by
the Company for the development of thermoplastic sports
products and golf shafts. The assets were sold to the
public for an approximate gross consideration of $400,000.
The Company anticipates the process to continue with
ongoing sales of the remaining equipment to occur in the
first quarter of 1999. The Company is retaining core
equipment that is required to manufacture its primary
thermoplastic material.

On December 28, 1998, the Company sold its capital stock in
its wholly owned subsidiary, Victel, Inc. ("Victel") to
E.B. Acquisition LLC ("EB"). The consideration for the sale
of all right, title and interest of the Company in and to
the Victel stock to EB was $1,000,000. In addition, on
December 28, 1998, EB deposited $500,000 in an escrow
account with the Company's outside bankruptcy counsel. The
terms and conditions of the sale and of the escrow
arrangement are of public record in the United States
Bankruptcy Court for the District of Rhode Island.

RUTHERFORD MORAN: Reports Merger Agreement
On December 23, 1998, Rutherford-Moran Oil Corporation
("Rutherford-Moran")publicly announced that it has entered
into a definitive merger agreement with Chevron Corporation
("Chevron") pursuant to which Chevron will acquire all the
outstanding shares of Rutherford-Moran for approximately
$91 million in Chevron common stock.

A complete text copy of the Agreement and Plan of Merger
dated as of December 23, 1998 by and among Chevron
Corporation, Chevron Thailand Inc. and Rutherford-Moran Oil
Corporation is available via the Internet at

SCHWEITZER MOUNTAIN: Harbor Resorts Reports Acquisition
Harbor Mountain L.L.C., a partnership between Harbor
Properties and Keith McCaw, completed its purchase of
Schweitzer Mountain Resort near Sandpoint, Idaho, from U.S.
Bank today. The price was undisclosed, but the appraised
value has been reported as $18 million.

Harbor originally tried to buy the resort from the Brown
family of Sandpoint in November 1997, but the family placed
the resort and other properties in Chapter 11 bankruptcy in
an attempt to block any sale. U.S. Bank bought the resort
in early December 1998.

"Schweitzer fits Harbor well, leveraging our existing ski
operations and real estate expertise.  In addition, Harbor
will continue to pursue other ski and recreation
opportunities," stated Robert Holmes, President and CEO of
Harbor Properties.

The Commercial Appeal Memphis TN reports on December 31,
1998 that Nashville-based Service Merchandise released
fourth-quarter sales results Wednesday that did little to
shore up the retailer's weak financial position.

Same store sales, hard-line sales and the company's gross
margin were all down in the low double digits, while
jewelry sales were up in the mid-single digits. The company
did not release specific figures.

Earlier this month, slumping sales forced the company to
delay making a $13.5 million interest payment due Dec. 15
on a $900 million refinanced debt. It has until Jan. 15 to
make the payment.

Service Merchandise's credit rating has been on the decline
since 1997, reflecting concerns as to whether the company's
efforts to reinvent itself will work. Its drooping shares
closed Wednesday at 28 cents on the New York Stock  
Exchange, having reached a 52-week high of just $2.56 and a
low of 25 cents.   Service Merchandise, founded in 1934 as
a five-and-dime store, recently underwent a $175 million
transformation that changed its stores from the  
traditional catalog showroom format to one that allows
consumers to pick merchandise off the shelf and make
purchases. Under the old format, items were displayed with
pull tickets. Shoppers would take a ticket to a cashier,
pay for the merchandise, and then wait for it to be brought
from the back room.

The lower than expected fourth-quarter sales results are "a
very onerous sign," said Gary Dennis, retail analyst for J.
C. Bradford in Nashville. If the company is unable to make
the loan payment in mid-January, it may have to seek
protection from creditors in bankruptcy court.

In a statement released Wednesday, the company said: "The
interest payment due December 15, 1998, remains unpaid and
the Company continues to evaluate available alternatives.
The company will not comment on current business trends
beyond its press releases during the period between
Thanksgiving and the reporting of fourth-quarter results in

SOUTHLAND CONTAINER: Committee Taps Miller, Canfield
The Official Unsecured Creditors' Committees of the
debtors, Jotan Inc. and Southland Container Packaging Corp.
apply for entry of an order authorizing the employ of
Miller, Canfield, Paddock and Stone, PLC as their counsel.

The debtors are both in the business of distributing
packaging and shipping supplies through service and
distribution centers located throughout the US.  Their
primary businesses are located in Jacksonville, Florida.

The Committees consist of the same three members: Stone
Container Corporation, Jefferson Smurfit Corporation and
Gaylord Container Corporation.

Miller, Canfield's proposed services will include:

Investigation of the validity, perfection and priority of
the Banks' asserted secured claims and possible objection
thereto; investigation of causes of action that the debtor
and the estate may have against third parties under Chapter
5 of the code; participation in the formulation of a plan;
requesting the appointment of a trustee or examiner, or
request of conversion to a Chapter 7; objection to claims;
and representation of the Committees in Court.

A $20,000 carve-out was agreed to by the banks for fees and
expenses of counsel for the committee in the Jotan case.

STAR NEWCO: Seeks To Extend Exclusivity
The debtor, Star Newco, Inc. is seeking an extension of its
exclusive period in which to file a plan of reorganization
and an extension of its period to solicit acceptances
thereto.  A hearing will be held on January 26, 1999 at
2:00 PM at the US Bankruptcy Court, 824 Market Street,
Wilmington, Delaware 19801.

The debtor manufactures expandable wall fasteners.  The
debtor requests the entry of an order enlarging the
exclusive filing period by 120 days through and including
May 4, 1999, and to June 5, 1999 for solicitation of
acceptances.  According to the debtor, extending the
exclusive period will enable the debtor, in consultation
with the Creditors' Committee and other creditor
constituencies to continue to seek potential offers for the
debtor's core business, to develop a plan of reorganization
with maximum creditor support, conclude plan negotiations,
and confirm a plan of reorganization in a stable and well-
defined environment without "disruption, uncertainty and

The debtor claims that its case is complex, and that the
initial 120 days was not enough time to propose a
reorganization plan due to the sale of the company's
noncore business and other nonessential equipment and
inventory.  In addition, the debtor is still analyzing how
many claims there are against the company, whether the
claims are valid and the amount of the claims.

TECHNIMAR INDUSTRIES: Response to Motion to Dismiss
Technimar Acquisition Group, LLC ("TAG") responds to the
motion to convert or dismiss filed by the US Trustee.  TAG
supports the motion to convert the case to a Chapter 7.

TAG is a post-petition secured creditor of the debtor
pursuant to a post-petition loan agreement.  TAG has a
claim against the debtor and the estate with priority over
all administrative expenses.  The debtor defaulted on the
loan agreement and was unable to cure the defaults.

TAG believes that a Chapter 7 trustee should be appointed
to investigate whether the estate has any avoidance actions
arising out of pre-petition transfers, and to investigate
the financial affairs of the debtor.  

Unarco Commercial Products, the Oklahoma company that has
been credited with manufacturing the first shopping cart,
filed chapter 11 on Dec. 23 in the Eastern District
of Oklahoma, according to Tulsa World. The world's largest
shopping cart manufacturer, Unarco owed $43 million with
assets of $38 million, as of Nov. 30.

UNISON HEALTHCARE: Files Quarterly Report
Unison Healthcare Corporation and its subsidiaries filed
with the SEC a quarterly report for the quarter ended June
30, 1998.

In the second quarter of 1998, Unison recorded a net loss
of $5.0 million, or $0.78 per share, compared to a net loss
of $2.9 million, or $0.46 per share, in the prior year
quarter.  Loss before income taxes amounted to $5.0 million
inthe 1998 second quarter compared to $4.3 million in the
same period in 1997.

Total revenues decreased $9.2 million, or 16.1%, to $48.1
million in the 1998 second quarter from $57.4  million in
the  comparable 1997 quarter.  

For the six months ended June 30, 1998, Unison recorded a
net loss of $9.8 million, or $1.53 per share, compared to a
net loss of $7.0 million, or $1.11 per share, for the 1997  
period. Total revenues decreased $10.3 million, or 9.1%, to
$102.8 million in the 1998 period from $113.1 million in
1997. At June 30, 1998, Unison had cash and equivalents
amounting to $4.3 million compared to $5.3 million at
December 31, 1997.

WILLIAMS BAY TRADING: Bank One Ordered To pay $2M
The Milwaukee Sentinel & Journal reports on December 29,
1998 that Bank One Milwaukee has been ordered to pay $2
million in damages to a Waterford-based clothing
distributor for breach of contract.

Milwaukee County Circuit Judge Michael Malmstadt last week
ordered the bank to make the payment to the Williams Bay
Trading Co. Williams Bay Trading claimed that actions by
the bank forced the firm into bankruptcy.  Malmstadt also
found that Bank One's handling of the Williams Bay account   
constituted bad faith.

"The court ruled against us, and we are considering an
appeal," said John Russell, chief communication officer for
Bank One Corp. in Columbus, Ohio. Stan Lata, a Bank One
spokesman in Chicago, said the ruling will have no effect
on Bank One's earnings or its Milwaukee operations.

The now defunct Williams Bay Trading Co. imported flannel
shirts and gloves to sell to Kohl's Department Stores,
Mills Fleet Farm stores and truck stops nationwide.
The distributor entered into a relationship with Bank One
in 1994. In  1995, Williams Bay Trading had problems with
one of its vendors, causing the company to report a loss,
said Michael Schutte, former owner of Williams Bay

"We lost about $50,000 that year . . . (but) Bank One
renewed our loans (later that year)," Schutte said.
Bank One's line of credit to Williams Bay Trading was for
$4 million.  The bank refused to issue a line of credit to
the distributor in 1996, Schutte said.

"In our minds there was no reason to refuse (Williams Bay
Trading) credit," said Cynthia M. Mack, an attorney with
Lichtsinn & Haensel in  Milwaukee. "Williams Bay had not
committed default." The timing of Bank One's decision made
it virtually impossible for the distributor to find another
financial institution to issue a line of credit, Mack said.

"They made their decision weeks before (Williams Bay
Trading) needed to get its inventory," Mack said.
Many foreign vendors only deal with companies that have
established lines of credit with a bank, she said.
"Bank One's decision wiped Williams Bay out," Mack said.
Williams Bay Trading filed for Chapter 11 reorganization
and liquidated its assets. The company sold some of its
assets to a Racine clothing distributor.  "We gave them our
customer list and vendors and about $3 million in purchase
orders," Schutte said.

Schutte said he was pleased with the judge's ruling but was
still upset with the way Bank One treated him.


A listing of Meetings, Conferences and Seminars appears in
each Tuesday's edition of the TCR.  

Bond pricing, appearing in each Friday edition of the TCR,
is provided 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
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