TCR_Public/990204.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, February 4, 1999, Vol. 3, No. 24

                   Headlines

AL TECH: Hearing on Insurance Premium Finance Agreement
AMERICAN RICE: Wins 30-Day Exclusivity Extension
ARALDICA: Dismissed From Bankruptcy Proceedings
BRADLEES: Emerges With $270 Million Financing
BROTHERS GOURMET: Stock Purchase Agreement With BGC

CALDOR: Kohl's Signs To Purchase Rights To Occupy 33 Stores
D&L VENTURE: Seeks To Extend Post-Petition Financing
FALLS LEATHER: Creditor Agreement For Sarasota Store
GRAND UNION: Loss Down - Cash Flow Up
HOBRECHT: Plan Confirmed

HOMEOWNERS EQUITY: Terms of Disclosure Statement
JUMBOSPORTS: GOB Sales Go To Hilco/Great American
JUMBOSPORTS: Order Grants Employ of Traub, Bonacquist
LOGAN GENERAL: Hospital Gets Purchase Offers
MOBILEMEDIA: Arch Announces FCC Approval To Merger

MOBILEMEDIA: New Generation Seeks To Disqualify Votes
NU-KOTE: Order Approves Employment of Attorneys
NU-KOTE: Order Authorizes Employ of Arthur Andersen
PANGBURN: "Millionaires" Candy Maker Files Chapter 11
PARAGON TRADE: Finalizes Agreement With Procter & Gamble

PERK DEVELOPMENT: Seeks Approval of Auction Sale
PINNACLE BRANDS: Seeks Approval of Purchase Agreement
RAND ENERGY: To Sell Mississippi Assets
SERVICE MERCHANDISE: Bracing For Involuntary Petition?
SITE TECHNOLOGIES: Files For Protection Under Chapter 11

SOLO SERVE: To Liquidate Inventory
TANON: Smartflex Systems Acquires Assets From Tanon
UNITED COMPANIES: Midanek To Head Turnaround
VAN LEUNEN'S: Confirmation of Plan
WESTMORELAND COAL: Successfully Emerges From Bankruptcy

                  *********

AL TECH: Hearing on Insurance Premium Finance Agreement
-------------------------------------------------------
The final hearing on the motion of AL Tech Specialty Steel
Corporation for an order authorizing the debtor's entry
into an insurance premium Finance Agreement shall be heard
on February 22, 1999 at 10:00 AM at 300 Pearl Street, Suite
350, Part II Courtroom, 3rd Floor, Buffalo, New York.  The
Court previously granted an interim order authorizing the
relief requested in the motion, pending a final hearing.


AMERICAN RICE: Wins 30-Day Exclusivity Extension
------------------------------------------------
The court has extended American Rice Inc.'s exclusive
periods to file a reorganization plan and solicit plan
acceptances for one month to Feb. 26 and May 30. "Given the
size and complexity of this case, an intelligible,
constructive, and consensual plan of reorganization could
not feasibly be filed within the 120 day period," the
company argued in a Jan. 21 emergency motion. American Rice
noted it had established a mechanism for financing and
responding to numerous creditor requests for adequate
protection and stay relief but said it had just begun to
embark on the plan development process. The exclusive
periods were set to expire on Jan. 31 and April 30,
respectively. (The Daily Bankruptcy Review and ABI
Copyright c February 3, 1999)


ARALDICA: Dismissed From Bankruptcy Proceedings
-----------------------------------------------            
Araldica Wineries, Ltd. announced today that its
application of 16 December 1998, to the United  
States Bankruptcy Court in White Plains, New York,
requesting that it be dismissed from the Court's
jurisdiction, has been granted by Federal
Southern District Judge Adlai S. Hardin, Jr.

The company had filed for voluntary Chapter 11
reorganization on November 4, 1998.

The company also announced today the relocation of its
corporate offices, from New Rochelle, New York to 137 Fifth
Avenue in Manhattan, to be effective on Monday, 15
February, 1999.

Araldica Wineries, Ltd. (which trades publicly under the
symbol "AWLT", on the OTC bulletin board), is in its 6th
year of operation; its business activities now encompass
the manufacture, importation and distribution of premium
Italian wines and olive oils, as well as the importation
and sale of selected gourmet/specialty Italian foods.


BRADLEES: Emerges With $270 Million Financing
---------------------------------------------
Bradlees, Inc. announced on February 3, 1999 that it has
emerged from Chapter 11 bankruptcy protection. This  
announcement follows the January 27, 1999 action of the
Bankruptcy Court of the Southern District of New York
which, with the support of all of Bradlees'  creditor
constituencies, confirmed the company's Plan of
Reorganization.

Bradlees also announced that it has obtained a three-year,
$270 million post-emergence financing facility from of
BankBoston, N.A., through its subsidiary BankBoston Retail
Finance, Inc., as Agent and Issuing Bank, under which the  
company will be allowed to borrow for general corporate
purposes, working capital and inventory purchases.

In addition, Bradlees common stock will trade on the
National Association of Securities Dealers Automated
Quotation (NASDAQ) system under the symbol "BRAD".

Court approval of the Plan successfully culminates a three-
and-a-half-year reorganization process at Bradlees that was
initiated once it filed for Chapter 11 Bankruptcy Court
protection on June 23, 1995.

The Plan approved by the Bankruptcy Court provides for
approximately $165  million in distributions to creditors.
These distributions include $16 million  of administrative
claim payments, $7 million in tax and cure notes, $3
million  in other distributions, $40 million in "new" notes
(primarily payable to the  company's pre-Chapter 11 bank
group), $14 million in cash, and the issuance of  new
common stock with an estimated value of $85 million.

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


BROTHERS GOURMET: Stock Purchase Agreement With BGC
---------------------------------------------------
As of January 5, 1999, Brothers Gourmet Coffees, Inc. and
BGC Acquisition Corp. negotiated a proposed Stock Purchase
Agreement.  The Buyer, BGC Acquisition Corp. desires to
purchase from the debtor all fo the equity interests of the
company outstanding upon the consummation of the plan.  
Buyer shall pay the greater of the sum of $20.5 million (as
adjusted) and the Minimum Purchase Price as defined in the
agreement.


CALDOR: Kohl's Signs To Purchase Rights To Occupy 33 Stores
-----------------------------------------------------------
Kohl's Corporation (NYSE: KSS) and its subsidiary, Kohl's
Department Stores, Inc. announced the signing  
of an agreement with the Caldor Corporation reflecting
Kohl's commitment to purchase the rights to occupy 33
stores previously operated by Caldor.  Thirty-
two stores are in the New York metropolitan area and one
store is in the Baltimore, Md. area.  The consummation of
the agreement is subject to a number of contingencies, most
importantly the determination by the Bankruptcy
Court  having jurisdiction that Kohl's is the prevailing
party for the 33 properties.   Kohl's expects a
determination by the court within thirty to sixty days.  If  
successful in purchasing the rights to occupy the stores,
Kohl's intention  would be to take possession after any
"going out of business" sales by Caldor  and remodel each
site consistent with Kohl's Department Store prototype
store.   Kohl's will use funds it currently has available
to complete the purchase transaction.  Kohl's expects to
open the stores in the Spring 2000.

Kohl's currently operates 213 stores in 22 states.  Kohl's
plans to open approximately 45 stores in 1999 including
entries into Denver, Colorado; St. Louis, Missouri and
Dallas/Ft. Worth , Texas.  The Company had previously  
announced that it planned to open 40-45 stores in 2000.  If
successful in  purchasing the rights to occupy the Caldor
stores, Kohl's would plan to open 50- 55 stores in 2000.


D&L VENTURE: Seeks To Extend Post-Petition Financing
----------------------------------------------------
The debtor, D&L Venture Corp., et al., seek an expedited
determination of the debtors' motion seeking authority to
continue and extend post-petition secured financing
agreement with Paragon Capital LLC.  The debtors also seek
to establish a Bar Date of February 23, 1999 for
Administrative Claims.

Both the debtors and Paragon wish to extend the post-
petition financing order for a period of approximately six
weeks until March 16, 1999.  The debtors' contfirmation
hearing is scheduled for February 26, 1999.  

The debtors have an immediate and continuing need for
financing provided by Paragon in order to continue the
operation of, and to avoid immediate and irreparable harm
to their business and to maintain and preserve going
concern value.  Without the ability to continue post-
petition financing, the debtors will be unable to pay
ongoing expenses related to the continued operation of the
debtors' business.  The parties anticipate a loan upon
confirmation of the plan with a ceiling of $8 million for a
term of 3 1/2 years from confirmation.


FALLS LEATHER: Creditor Agreement For Sarasota Store
----------------------------------------------------
The Sarasota Herald-Tribune reports on February 2, 1999
that the president of Falls Leather Gallery said his chain,
which has a store in Sarasota, reached an agreement with
its largest creditor Monday and expects similar agreements
with other creditors this week.

The Miami-based company had seen leather manufacturer
Natuzzi stop its shipments of merchandise after Falls
Leather filed last month for federal bankruptcy protection.

Falls Leather owes Natuzzi - its largest secured creditor -
$1 million.

Eric Salem, Fall Leather's president, said that the company
decided to seek protection from creditors in order to sever
the warehouse and truck leases it agreed to as part of an
expansion that has been cancelled.

All of the company's 10 stores are now stocked through Fall
Leather's only warehouse, in Dade County. The drain on the
company's cash flow meant slower deliveries to customers,
Salem said.

Each Falls Leather store filed individually for bankruptcy
protection. The stores have combined sales of $20 million.

Customer orders have been filled to a small degree by
inventory from the company's warehouse, Salem said. A vast
majority of the chain's sales are special orders.

Salem said that manufacturers start new production only
every four to five weeks. The agreement with Natuzzi comes
soon enough after the bankruptcy filing  to meet the next
production cycle, he added.


GRAND UNION: Loss Down - Cash Flow Up
-------------------------------------
Cash flow was up and losses down for the Grand Union Co. in
the third quarter, but the Wayne-based supermarket chain
still is not profitable.

Six months after emerging from Bankruptcy Court protection,
Grand Union reported a net loss of $26.7 million for the
12-week period ended Jan. 2, compared with a loss of $47.9
million for the same period a year ago. Sales were flat at
$527.7 million.

A more important number was cash flow, and that was
positive, said Meredith Adler, an analyst with Lehman Bros.
in New York. The supermarket chain reported that cash flow,  
profit before operating expenses, was up by 14.9  
percent, to $30.1 million, the second consecutive quarterly
increase.

J. Wayne Harris, Grand Union's chairman and chief
executive, said the company had reduced operating and
administrative expenses by nearly 1 percent for the quarter
and was reinvesting the savings in upgrades.

With its debt reduced through a Chapter 11 bankruptcy
reorganization, Grand Union has started renovations that
had been put off. In the third quarter and the first two
weeks of the fourth, the company completed renovations on  
eight stores, and it opened its first limited-assortment
store under the Hot Dot Foods banner in Winooski, Vt., said
Harris. The stores carry fewer items than traditional
supermarkets.

Harris said that sales were hurt in its northern division,
which includes Vermont, because warm weather delayed the
start of the skiing season. But sales in the metropolitan
area, including North Jersey, had increased for the fifth
consecutive quarter.

Grand Union stock fell 6 1/4 cents a share Wednesday to
close at $12.18 3/4. (Record New Jersey - 01/28/99)


HOBRECHT: Plan Confirmed
------------------------
Bankruptcy and commercial litigation firm Marshack, Shulman
& Hodges LLP announced that it successfully confirmed a
Chapter 11 plan of reorganization on behalf of Hobrecht
LLC, a Southern California-based distributor of truck and
sport utility vehicle accessories.  The plan was confirmed
January 27, 1999 by the Honorable James Donovan, United
States Bankruptcy Judge in Los Angeles, California.  The
confirmed plan provides for 100% payment to all creditors,
with interest.

C. Bastian, a partner at Marshack Shulman & Hodges LLP, led
the engagement. The primary secured creditor, Western
Tube & Conduit Corporation, was represented by David Gould
of McDermott Will & Emery in Los Angeles.


HOMEOWNERS EQUITY: Terms of Disclosure Statement
------------------------------------------------
The First Amended Disclosure Statement of Homeowners
Mortgage & Equity, Inc.  was approved on January 22, 1999.  
A hearing on confirmation of the plan is set for February
24, 1999 at 9:30 AM in the United States Bankruptcy Court,
Federal Courthouse, 903 San Jacinto Blvd., 3rd Floor,
Austin, Texas.  

The plan establishes a liquidating Trust for the benefit of
the creditors of the debtor.  The Liquidating Trust is
organized by the debtor for the primary purpose of
liquidating and distributing the assets and property
transferred to the liquidating Trust in accordance with the
provisions of the plan.  Upon transfer fothe Trust Property
to the liquidating Trust, the debtor shall retain no
interest in the Trust Property.

Summary of Treatment of Claims and Interests:

Unclassified - Administrative Expense Claims

Class 1 - Priority Claims - Not impaired

Class 2 - Administrative Convenience Claims- Impaired

Class 3 - Guaranty Federal Secured Claim - Impaired

Class 4 - Other Secured Claims - Not impaired

Class 5 - Unsecured Claims - Impaired

Class 6 - Equity Interests - Impaired. No payment unless
Class 2 and Class 5 are paid in full.

The debtor believes that it may hold substanmial claims
against Existing FNMA (Federal National Mortgage
Association) litigation may yield a recovery.  Those claims
include, without limitation, claims to recover the damages
cause to Home Inc. and to its creditors by FNMA's
termination of the mortgage Selling and Servicing Contract,
the ASAP+ Agreement, and other relationships with Home Inc.  
The debtor believes that the recovery of actual damages on
these claims could exceed $40 million.  In addition, the
debtor believes that it has claims against FNMA for
constructively fraudulent transfers relating to the
securitization transactions involving the FNMA mortgage
backed securities.  The damages sought on those claims
could be an estimated $10 million.


JUMBOSPORTS: GOB Sales Go To Hilco/Great American
-------------------------------------------------
Stalking horse Hilco/Great American Group will conduct
JumboSports Inc.'s going-out-of-business sales after
outbidding another liquidating firm in an auction that    
pushed the price up just over two percentage points to a
final bid of 55.45%, according to    an attorney for the
company. The court approved the hire of Hilco during a Feb.
1 hearing after the auction. Hilco will oversee the sale of
inventory from 17 or 18 of the retailer's 60 stores. Hilco
outbid a team comprised of Gordon Brothers and Shottenstein    
Bernstein Capital Group LLC to conduct the auction. Hilco's
initial bid was 52.75% of the retail price of merchandise.
Tampa-based JumboSports sells brand-name sports equipment,    
athletic apparel and footwear. (The Daily Bankruptcy Review
and ABI Copyright c February 3, 1999)


JUMBOSPORTS: Order Grants Employ of Traub, Bonacquist
-----------------------------------------------------
On January 21, 1999, the court entered an order authorizing
the employ of Traub, Bonacquist & Fox LLP as special
counsel to JumboSports Inc.

The court approved the application of the debtor to hire
the firm for the purpose of:

Providing representation, advice and guidance to
JumboSports Inc. with respect to strategic asset
disposition and maximization matters including, without
limitation, assisting, advising and guiding the debtor in
achieving maximum realizable value for the inventory in
certain stores to be closed by creating a competitive
atmosphere among the leading national and regional
liquidation firms and generally guiding JumboSports Inc.
through the store closing and inventory liquidation
process;

Representing JumboSports Inc. in undertaking to formulate a
series of bid solicitation procedures in connection with
retention of a liquidator to assist in the closing of the
stores, including a preparation of a base line agency
agreement as well as assisting and advising the debtor in
preparation of a standardized bid information/financial
data package to be delivered to the liquidator community;
and

Representing the debtor in organizing and conducting an
expedited auction process as to certain of its closing
stores.


LOGAN GENERAL: Hospital Gets Purchase Offers
--------------------------------------------
The Charleston Daily Mail reports on February 1, 1999 that
as Logan General Hospital remains in bankruptcy protection,
officials are sifting through offers from national hospital
chains wanting to buy the 132-bed facility.

The hospital must prove to a bankruptcy judge and its
creditors that it can  solve its financial problems on its
own or face receivership.

Several chains have offered to rescue Logan General from
its cash- flow troubles by proposing to buy, manage or
lease the Logan hospital, says Ted Hatfield, the hospital's
acting administrator.

Among them is Tennessee-based Province Healthcare, which
owns or manages 60 hospitals in 18 Midwest and Western
states. Logan's doctors have backed the Providence
proposal, saying it answered concerns about staff and
salary.

Also bidding:

- West Virginia's Management Resources Inc.

- Community Health Systems based in Tennessee, which owns,
manages or leases 44 hospitals in 17 states.

- Health Management Associates of Naples, Fla., which
operates 27 hospitals and clinics in 11 states.

- Genesis Health Systems, a consortium of Cabell
Huntington, Pleasant Valley and St. Mary's hospitals. Logan
doctors fear their hospital would become a  
satellite facility to one of the three Genesis hospitals.

But not everyone at Logan is happy about the offers. Some
say for-profit chains would negatively change nonprofit
Logan General.

Logan General, owned by Monterra Health System, got into
its $30 million problem by mixing health care with shopping
mall development plans last year.

The hospital filed for Chapter 11 bankruptcy in October
after a creditor, The Bank of New York, asked a federal
judge to place the hospital in  receivership.

The real estate subsidiary Monterra Development last week
stopped construction on a strip mall that has been funded
with hospital money.

Monterra Development also owes Logan General about $29.5
million for its financing of the FountainPlace Mall
project. It has several other creditors.

Several developers also have expressed interest in buying
the strip mall, Hatfield said.


MOBILEMEDIA: Arch Announces FCC Approval To Merger
--------------------------------------------------
Arch Communications Group, Inc.(Nasdaq: APGR) today
announced that it has received approval from the Federal  
Communications Commission (FCC) on its proposed merger with
MobileMedia Corporation.  The merger, expected to close in
March, will create the nation's second largest paging and
wireless messaging company with more than seven  
million customer paging units-in-service in all 50 states.

The FCC approved applications for the transfer of
MobileMedia's licenses to Arch.  At the same time, the
Commission terminated an administrative hearing  
into MobileMedia's qualifications to remain an FCC
licensee.  The hearing was initiated after MobileMedia,
which has operated under Chapter 11 bankruptcy protection
since January 1997, voluntarily disclosed that
certain  misrepresentations had been made to the FCC.  
Under the FCC's "Second Thursday" doctrine, which provides
an exception to the general rule that prohibits a licensee
whose qualifications have been called into question from
transferring  its licenses to another entity, the FCC will
allow the MobileMedia licenses to be transferred to Arch.  
The "Second Thursday" doctrine is designed to reconcile the
integrity of the FCC's licensing practices with bankruptcy
law and policy.

C. Edward Baker, Jr., Arch chairman and chief executive
officer, said: "We are pleased to receive today's support
and approval from the FCC. We look forward to closing the
merger soon and moving forward with plans to integrate our
two companies."

Approvals still pending include the final vote of
MobileMedia creditors on MobileMedia's Third Amended Plan
of Reorganization, and confirmation of the Plan by the U.S.
Bankruptcy Court for the District of Delaware.

Arch Communications Group, Inc., Westborough, MA, is the
third largest paging company in the United States.  Founded
in 1986, it provides narrowband wireless messaging
services, principally paging, to more than four million
subscribers nationwide.  Arch's 2,600 employees operate
from approximately 200 offices and Company-owned stores
nationwide.  Additional information on Arch is available  
on the Internet at www.arch.com.


MOBILEMEDIA: New Generation Seeks To Disqualify Votes
-----------------------------------------------------
New Generation Advisers, Inc. seeks a court order
designating plan votes of the Standby Purchasers.  A
hearing on the motion will be held before the Honorable
Peter J. Walsh in the U.S. Bankruptcy Court, 824 market
Street, Wilmington, Delaware on February 3, 1999 at 2:00
PM.  The motion is submitted, according to New Generation,
a party in interest, to undo the wrong arising from the
apparent breaches of fiduciary and related duties by two
members of the Official Committee of Unsecured Creditors,
Huff Asset Management and Northwestern Mutual Life
Insurance Company, and two other holders of the debtors'
unsecured bonds, Credit Suisse First Boston and
Whippoorwill Associates, Inc.

New Generation alleges that while these entities have or
should be deemed to have fiduciary duties to the unsecured
creditors, their actions (and votes) appear to have been
motivated by their ownership interests in the securities of
the debtors' proposed merger partner, Arch Communications,
Inc. and/or the debtors' bank debt.  New Generation
believes that the Standby Purchasers individually, and as a
group, effectively brokered the Arch/MobileMedia merger
proposal and are, in reality, the true proponents of the
plan.

At the same time the Standby Purchasers were supporting the
Arch/MobileMedia transaction, one or more of them acquired
securities of Arch and/or acquired - at a substantial
discount - ownership interests in MobileMedia's bank debt
(which claims are to be paid in full under the plan).  New
Generation states that it appears that the Standby
Purchasers have acted only to protect and enhance the value
of the MobileMedia bank debt and Arch securities.

New Generation alleges that these actions violated the
fiduciary obligations of Huff and Northwestern as members
of the Committee. And New Generation further states that
CSFB and Whippoorwill, by receiving non-public information
regarding Arch or MobileMedia, and by allegedly using the
Committee professionals, CSFB and Whippoorwill were for all
practical purposes, members of the Committee, and should be
charged with the fiduciary obligations, including the duty
of undivided loyalty.

New Generation asks that the court "undo the wrong"
committee by the Standby Purchasers in the context of these
bankruptcy proceedings by designating, that is
disqualifying their votes on the plan.


NU-KOTE: Order Approves Employment of Attorneys
-----------------------------------------------
Upon the application of the Official Committee of Unsecured
Creditors of International Communications Materials, Inc.,
debtor, the court approved the employment of Poyner &
Spruill, LLP and Mendes & Gonzales, PLLC as counsel for the
Committee.


NU-KOTE: Order Authorizes Employ of Arthur Andersen
---------------------------------------------------
On January 25, 1999, the Honorable Keith M. Lundin approved
the application of the Unsecured Creditors' Committee of
Nu-Kote International, Inc. to employ and retain Arthur
Andersen LLP as accountants and financial advisors to the
Committee.


PANGBURN: "Millionaires" Candy Maker Files Chapter 11
-----------------------------------------------------
Pangburn Candy Co., an 85-year-old candy maker best known
for its "Millionaires" candy, has filed for chapter 11
protection, citing a short-term credit disruption,
according to The Star Telegram. The Fort Worth, Texas,
company listed $17 million in assets and $11 million in
liabilities, and has long-term debt of $6.8 million and
unsecured debt of less than $6 million. Pangburn, founded
in 1914 by a Fort Worth pharmacist, is seeking a new line
of credit since its current lender declined to provide a
two-week extension, which Pangburn needed to complete its
new financing. Frank Creager, who once ran the company,
said yesterday the candy business is nearing the end of its
peak sales period from Halloween through Mother's Day, and
that payments do not come in until March or April, so there
are often cash flow problems. (ABI 03-Feb-99)


PARAGON TRADE: Finalizes Agreement With Procter & Gamble
--------------------------------------------------------
Paragon Trade Brands, Inc. (NYSE: PTB) announced on
February 2, 1999 that it has finalized its previously
announced agreement in principle with the Procter & Gamble
Company (NYSE: PG) and filed a motion with the United
States Bankruptcy Court for the Northern District of
Georgia to approve the settlement.  The agreement provides
for resolution of all of P&G's claims pending in Paragon's
bankruptcy proceeding, including issues surrounding a
patent dispute that was the subject of litigation in the
Delaware District Court, and constitutes a significant step
forward in Paragon's reorganization process.

According to Paragon, the agreement will serve as the
cornerstone for the formulation of a consensual plan of
reorganization.  Paragon believes the settlement provides a
means for resolving P&G's claims against the Company,  
managing litigation risk going forward and emerging from
bankruptcy positioned  to produce the highest quality
absorbent products and to achieve its long-range strategic
goals.

Under the agreement, Paragon grants P&G a prepetition
unsecured claim in the amount of $158.5 million and an
administrative claim in the amount of $5 million.  P&G had
previously filed a proof of claim in Paragon's bankruptcy  
proceedings listing claims totaling approximately $6
billion, including a claim for damages in the amount of
approximately $178.4 million related to a finding  by the
Delaware District Court in December 1997 that Paragon's
"ultra" diapers  infringed two P&G patents.  The parties
have agreed that payments of the agreed- upon amounts
pursuant to a plan of reorganization will be in full
settlement of any and all claims P&G and Paragon have
asserted against each other through the date of the
settlement agreement.  The parties will exchange mutual
general releases to that effect.

As part of the agreement, P&G is granting licenses to
Paragon in the U.S. and Canada which give Paragon the
freedom under P&G's patents to market dual cuff diaper and
training pant products which enjoy wide consumer
acceptance. In exchange for this right, Paragon has agreed
to pay P&G running royalties on net sales of the licensed
products equal to: 2% through October 2005, .75%  
thereafter through October 2006 and .375% thereafter
through March 2007 in the U.S.; and 2% through October 2008
and 1.25% thereafter through December 2009 in
Canada.  The agreement also provides that P&G will grant
Paragon and/or its affiliates "most favored licensee"
status with respect to patents currently owned by P&G or
for which an application is pending as of the date of the  
settlement agreement.  In addition, Paragon has agreed with
P&G that prior to litigating any future patent dispute, the
parties will engage in good faith negotiations and will
consider arbitrating the dispute rather than immediately  
resorting to legal action.

Once the settlement is approved by a Final Order of the
Bankruptcy Court, the parties have agreed that Paragon will
withdraw its appeal of the P&G judgment  and P&G will
withdraw its contempt motion in Delaware.

Paragon further reported that it continues to pursue
settlement of the claims asserted by Kimberly-Clark
Corporation (NYSE: KMB) in Paragon's chapter 11
case and believes that considerable progress continues to
be made.


PERK DEVELOPMENT: Seeks Approval of Auction Sale
------------------------------------------------
The debtors, Perk Development Corporation and Brambury
Associates seek approval of an auction sale of the debtors'
interest in 26 leases of nonresidential real property as
well as certain equipment and personal property.

A hearing and auction sale were conducted on January 22,
1999 and two parties made a bid for a 30 store package of
debtors' assets.  One bidder, Travel Ports bid $3,450,000
while Denny's Inc. bid $3,800,000.

The Auction Hearing shall be at 10:00 AM on February 4,
1999 at the United States Courthouse.


PINNACLE BRANDS: Seeks Approval of Purchase Agreement
-----------------------------------------------------
The debtors, Pinnacle Brands, Inc. and its affiliated
debtors seek court approval and authorization implementing
that certain Asset Purchase Agreement between the debtors
and Raymond Enterprises, Inc., for the sale of the debtors'
"Optigraphics" assets.

The purchase price of any intitial overbid by a third party
must include consideration of at least the value of the
consideration being offered by Raymond, estimated by the
debtors to be approximately $5 million on a present value
basis, subject to adjustments no less favorable to the
debtors than those contained in the Purchase Agreement plus
addition consideration of not less than $250,000.

An auction will be conducted February 10, 1999 at 10:30 AM
at the offices of Kaye, Scholer, Fierman, Hays & Handler,
LLP, 425 Park Avenue, New York, NY.

A hearing will be held on February 12, 1999 at 2:30 PM
before the Honorable Mary F. Walrath, at the United States
Bankruptcy Courthouse for the District of Delaware, 824
North Market Street, Wilmington, Delaware to consider the
motion.


RAND ENERGY: To Sell Mississippi Assets
---------------------------------------
The debtor, Rand Energy Company, is seeking to sell certain
assets to Rebel Drilling Company, LP.  On January 21, 1999,
the debtor and Rebel entered into a letter agreement
whereby the debtor agreed, subject to the court's approval,
to sell Rebel all of the debtor's assets in Mississippi.

In consideration of Rebel acquiring the Mississippi Assets,
the debtor will receive $9 million in cash and a 2%
overriding royalty interest in certain leases, a conveyance
of certain properties located in the Cadre Field in Hidalgo
County, Texas and a release of Rebel's super-priority
administrative expense claim against the debtor's estate,
and payment from production of liens against the debtor's
interest in the Bazor #1 Well in Wayne County, Mississippi.

In the debtor's business judgment, this transaction is in
the best interests of the debtor's estate and its creditors
and should be authorized by the court.
A hearing date on this motion is set for February 22, 1999
at 9:30 AM before the Honorable Steven A. Felsenthal, 1100
Commerce Street, 14th Floor, Dallas, Texas.


SERVICE MERCHANDISE: Bracing For Involuntary Petition?
------------------------------------------------------
The Tennessean reports on January 30, 1998 that vendors
have threatened to push Service Merchandise Co. into
involuntary bankruptcy as the company strains to renew
itself after disappointing sales and a cash-flow crunch.

The 39-year-old jewelry and home products retailer said
vendors have indicated they could force a Chapter 7 filing,
which calls for complete liquidation. To date, no such
petition has occurred, the company said.

Service Merchandise disclosed the vendor statements in a
few sentences in a lengthy document filed Thursday with the
Securities and Exchange Commission.  The degree of urgency
of the vendors' threats was unclear from the document,
and representatives of the company declined yesterday to
comment on its  contents.

Service Merchandise filed the SEC document to outline the
terms and conditions of its new $750 million credit package
with Citibank and BankBoston Retail Finance. The company
has described the refinancing as the first step in an "out-
of-court restructuring" designed to stabilize it as it
addresses its financial and operational problems. The
retailer has 347 stores in 34 states and employs about
25,000 people.

Earlier this month, Service Merchandise hired turnaround
specialist Bettina M. Whyte as interim chief executive
officer. Whyte is a principal of Jay Alix & Associates, a
firm that specializes in helping poorly performing
companies return to profitability.


SITE TECHNOLOGIES: Files For Protection Under Chapter 11
--------------------------------------------------------
Site Technologies, Inc. (OTC Bulletin Board: SITE) today
announced that due to lack of financial resources  
it has filed for re-organization and protection under
Chapter 11 with the U. S.  Bankruptcy Court.

The Company plans to seek approval from the Bankruptcy
Court to complete the sale of substantially all of its
technology assets to StarBase Corp., which was previously
announced on December 21, 1998.


SOLO SERVE: To Liquidate Inventory
----------------------------------
Solo Serve Corporation (OTC Bulletin Board: SOLO) announced
today that at a hearing before the United States Bankruptcy  
Court for the Western District of Texas earlier today, the
Company was authorized to liquidate the inventory in its
remaining twenty stores pursuant to the Agency Agreement
between the Company and a joint venture consisting of  
Hilco Trading Co., Inc., Garcel, Inc., d/b/a Great
American Asset Management  and Nassi Group, LLC.  Proceeds
from the inventory liquidation will be applied to discharge
the remaining secured indebtedness of the Company and to
provide  funds necessary to continue operating the Company
on a reduced scale while the  Company seeks to maximize the
value of its remaining assets for the benefit of  its
creditors.

The Company's principal remaining assets consist of the
lease on its corporate headquarters/distribution center and
leases on twenty-seven store locations, including ten in
San Antonio, five in New Orleans, two in Austin and one
lease each in Shreveport, Louisiana, and several other
Texas markets. The Company is in discussions with
interested parties regarding the leases and the Company's  
other assets, which consist of furniture, fixtures and
equipment.  While no definitive proposals have been
received, certain of the interested parties would propose
to reopen some or all of the Company's existing store
locations after liquidation of the Company's remaining
inventory and may also utilize the Company's
headquarters/distribution center facility.  As yet, no
final proposals have been received, but the Company hopes
to evaluate the available alternatives and seek court
approval of a plan to dispose of the Company's  
remaining assets before the end of February.


TANON: Smartflex Systems Acquires Assets From Tanon
---------------------------------------------------
Smartflex Systems, Inc. (Nasdaq: SFLX) announced that it
has completed its purchase of certain assets of Tanon
Manufacturing, Inc. ("Tanon"), a wholly owned subsidiary of
EA  Industries Inc., out of bankruptcy. The assets were
purchased for a cash price of approximately $15 million,
$2.5 million of which will be paid in April 2000.  The
purchased assets include certain equipment and selected
inventory acquired  at a discount.

Tanon, which has facilities in West Long Branch, New Jersey
and Fremont, California provides electronic manufacturing
services for quick turn, prototype, and high-mix products
to the telecommunications, industrial controls, performance
printing, automotive, and medical marketplaces.

"We are very pleased to finalize this acquisition. It is an
integral part of our long term strategy," said William
Healey, Smartflex's president and chief executive officer.
"We believe Tanon will allow us to quickly and efficiently  
diversify into new markets from a product, capability and
sales standpoint. It will also expand our technical, market
and industry exposure for strong value chain support and
management," Healey added.

Smartflex Systems, Inc., headquartered in Tustin,
California, is an electronics manufacturing services (EMS)
expert in precision, automated manufacturing.  
Smartflex services optimize and accelerate product
realization the process from product concept through volume
manufacturing.

Specializing in precision interconnect-based packaging
enables Smartflex to design and manufacture significantly
smaller products at reduced cost. Smartflex's specialty
manufacturing skills allow the company to help its  
telecommunications, computer, and medical electronics
customers meet their goals of smaller packaging, reduced
cost, and faster delivery to the marketplace. Smartflex
serves customers worldwide from its factories and  
technology centers in Cebu, Philippines; Monterrey and
Guadalajara Mexico;  Singapore; and Santa Clara and Tustin,
California.


UNITED COMPANIES: Midanek To Head Turnaround
--------------------------------------------
United Companies Financial Corporation (NYSE: UC) today
announced that J. Terrell Brown, Chief Executive Officer
and President, has been granted a requested 90-day leave of
absence. Mr. Brown requested the leave to pursue personal
interests, including his possible participation in offers
to purchase all or a portion of the Company and its
operations. Mr. Brown will continue to serve as a director.

Mr. Brown's responsibilities will be substantially assumed
by Deborah Hicks Midanek, who was named Executive Vice
President and Chief Restructuring Officer. Ms. Midanek, a
principal of Jay Alix & Associates, formerly served as CEO
of Solon Asset Management, an institutional investment
management firm specializing in mortgage-related
instruments. Previously, she headed non-agency mortgage
finance at Drexel Burnham Lambert Group, Inc. Ms. Midanek
has been providing consulting services to the Company on a
full-time basis since December 1998. C. Geron Hargon, who
has succeeded John D. Dienes as Chief Operating Officer,
will continue in that position.

Henry C. McCall III, treasurer of the Company, retired
earlier this week, but has agreed to be available as a
consultant to the Board and Ms. Midanek.

The Company also announced that it anticipates that it will
fail to be in compliance with financial covenants in its
$850 million bank credit facility and $375 million
aggregate principal amount of senior and subordinated notes  
when its audited financial results for 1998 are finalized
and become available.  Such a failure would result in an
event of default under the related credit agreement and
indentures, unless, prior to the applicable cure periods,
such  defaults are cured or waivers were to be sought and
obtained.

The Company has not as yet engaged in any substantive
discussions with its bondholders concerning its compliance
with financial covenants and no assurances can be given
that the requisite waivers will be obtainable. The  
Company said that the previously announced agreement in
principle with the agent bank for its bank group regarding
the restructuring of its credit facility has not resulted
in a definitive agreement. The Company is continuing  
its discussions with the agent bank in an attempt to arrive
at a mutually acceptable restructuring of the facility.

The Company also stated that its bank credit facility
currently is fully drawn upon and recently it has been
experiencing difficulties in generating the liquidity
necessary to maintain home equity loan production at levels
contemplated by its previously announced restructuring
plan. The Company is  continuing to pursue all available
alternatives to improve its liquidity and financial
condition, including whole loan sales and alternate sources
of financing, as well as other extraordinary transactions
that could involve a sale of all or a substantial part of
the Company. The Company noted that there can be no
assurance that any such transactions or alternative
financing will be available to the Company.

United Companies Financial Corporation is a specialty
finance company that provides consumer loan products
nationwide through its lending subsidiaries, UC  Lending
(R) and Ginger Mae (R), Inc. The Company's Common and
Preferred Stock  trade on the New York Stock Exchange under
the symbols "UC" and "UCPRI"  respectively.


VAN LEUNEN'S: Confirmation of Plan
----------------------------------
A hearing on the confirmation of the Chapter 11 plan of Van
Leunen's Inc. was held on January 22, 1999 and an Order of
Confirmation was filed stamped on January 22, 1999 and
entered on January 22, 1999.


WESTMORELAND COAL: Successfully Emerges From Bankruptcy
-------------------------------------------------------                                
Westmoreland Coal Company, the oldest independent coal
company in the United States, (OTC Bulletin Board:  
WMCL) announced today that it had successfully emerged from
bankruptcy following finalization of its dismissal from
Chapter 11 on January 4th and the execution last week of an
underlying settlement agreement with the United
Mine Workers of America ("UMWA"), several UMWA related
retiree benefit funds, and the Official Committee of Equity
Security Holders ("Equity Committee").  Westmoreland had
sought protection under Chapter 11 of the U.S.
Bankruptcy Code in December, 1996, after negotiations for a
consensual arrangement with the UMWA Health and Benefit
Funds ("Funds") collapsed. Westmoreland had proposed to  
the Funds that it be allowed to temporarily defer
payments for certain UMWA  retiree health benefit
obligations in order to give the Company time to  complete
implementation of a business plan that it had begun in late
1992 to restructure the Company for the long term benefit
of shareholders and retirees.   The events underlying
today's announcement came as a result of continued  
improvement in the Company's financial condition while
in Chapter 11.

Over the course of the Chapter 11 proceedings the Funds
proposed a plan of reorganization which would have
transferred ownership of the Company to a trust controlled
by them.  For its part, the Equity Committee filed a motion
to convert the cases to Chapter 7 in hopes of terminating
retiree health benefit obligations through dissolution of
the Company and then distributing to preferred shareholders
(pursuant to their liquidation preference) the cash
accumulated by the Company during bankruptcy and the
proceeds from selling the Company's businesses, with the
residual value, if any, going to common shareholders.

Included among key elements of the settlement are:

--  Withdrawal by the Funds, the UMWA, and the Equity
Committee of their objections to the Company's Motion to
Dismiss and joinder in the entry of  stipulated judgments,
and execution of a Master Agreement which preserves the  
Company as an ongoing enterprise with undiluted ownership
vested in its existing shareholders.

--  Agreement that the Company will not file, institute nor
support any action under state or federal liquidation,
insolvency or reorganization statutes for a  period of five
years.

--  Payment in full of all undisputed **creditor** claims,
in cash, with interest,  and continued satisfaction of all
other ongoing obligations.

--  Payment in full of all Coal Act arrearages, with
interest.

-- Payment of $4 million to the Funds in full satisfaction
of all other asserted claims for  
damages, liquidated damages, penalties, charges, fees and
costs.

--  Reinstatement by the Company of its Individual Employer
Plan for 1992 UMWA Benefit Plan ("1992 Plan") retirees.

--  Agreement by the Company to pay its future 1992 Plan
and UMWA Combined Benefit Fund ("Combined Fund")
obligations as and when due.

--  Resolution of withdrawal obligations to the UMWA 1974
Pension Trust through arbitration as provided by law.

--  Posting by the Company of security for three years of
health benefits to the 1992 Plan as required under the Coal
Act, and in addition, provision of a 6 year declining
balance $12 million secured contingency note for the
benefit of the 1992 Plan and the Combined Fund payable only
in the event the Company does not meet its Coal Act
obligations, or fails to meet certain ongoing financial  
tests.

--  Agreement by the Company to not initiate further
litigation to challenge  
the Coal Act or seek to initiate legislation to amend or
reject the Coal Act.

--  Agreement by the Company to maintain its individual
employer plan for  
retiree health benefits under the 1993 UMWA Wage Agreement
for eligible  
retirees and beneficiaries for a period of five years.

--  Convocation of an annual meeting of shareholders,
presently anticipated to  
take place on May 11, 1999.

--  Dissolution of the Equity Committee on February 3,
1999. -- Provided that the pending sale of Westmoreland's
remaining interest in the Rensselaer project occurs,
implementation of a public tender for 1, 052,631 million
shares of the Company's outstanding preferred stock, at $19
per share for a total consideration of $20 million.  The
tender shall occur in the first quarter of 1999, or as soon
thereafter as is practicable, following the date of the
asset  
sale.

--  Prohibition from making any other cash distribution to
preferred or common shareholders for any purpose prior to
June 30, 1999.

In order to facilitate implementation of the tender offer
at the earliest possible date the Company anticipates
accelerating the filing of its annual Form 10-K, and now
estimates this filing will take place on or about  
February 19, 1999.  Unaudited summary results for 1998 may
be announced in advance of that date.  The Company also
anticipates applying to relist its securities on one of the
major stock exchanges in the near term.

Westmoreland Coal Company, headquartered in Colorado
Springs, CO is currently engaged in Powder River Basin coal
mining, independent power and coal shipping and terminal
facility operations.

                  *********

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