TCR_Public/990224.MBX T R O U B L E D   C O M P A N Y   R E P O R T E R
    Wednesday, February 24, 1999, Vol. 3, No. 37


AMERICAN RICE: Emergency Motion to Extend Exclusivity
AMERICAN RICE: Seeking Emergency Extension For Leases
AR ACCESSORIES: Wallet Work's Plan Approved
AUSTRALIS HOLDINGS: Hearing For Order Converting Case
BMJ MEDICAL: Order Extends Time To Assume/Reject Leases

BROTHERS GOURMET: Considering Two Bids
CENTENNIAL COAL: Hearing To Consider Disclosure Statement
COMMERCIAL FINANCIAL: U.S. Trustee Objects to Professionals
CROWN BOOKS: Seeks Extension To Exclusive Periods
EIP MICROWAVE: Ceased Operations - Discussing Bankruptcy

EQUALNET CORP: Hearing To Consider Disclosure Statement
HIP HEALTH PLAN: Judge Okays Closing of 23 Health Centers
HOME HEALTH: Posts Results of Operations
INTERSCIENCE COMPUTER: Announces First Quarter Results
KENNY ROGERS: Court Approves Nathan's Famous Acquisition

LEVITZ FURNITURE: Seeks To Extend Exclusivity
MAXICARE HEALTH: Posts Fourth Quarter Results
MOBILEMEDIA: Mails Supplemental Disclosure To Class 6
QUADRAX CORP: Order Grants Extension To File Plan
RAND ENERGY: Requests Hearing on Bid Procedures

READING CHINA: Taps R.F. Stengel As Interim Management
READING CHINA: Seeks Extension of Exclusivity
SATO KOGYO: Seeking Loan Forgiveness
THE J.PETERMAN: It Appears To Be Over
USN COMMUNICATIONS: Case Summary & 20 Largest Creditors


AMERICAN RICE: Emergency Motion to Extend Exclusivity
The debtor, American Rice, Inc. is seeking a court order to
extend the time deadlines within which the debtor has the
exclusive right to file a plan of reorganization and to
obtain acceptances thereof until March 31, 1999 and June
30, 1999, respectively.

The debtor states that this is not a typical case, that  
this case involves over 700 employees in numerous
countries, annual sales exceeding $300 million and well
over $200 million in debt.  The debtor has already sold its
olive division and settled the Tenzer litigation. The
debtor has established financing agreements with its
secured creditors and has also responded  to requests for
adequate protection.  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 established by the code.

AMERICAN RICE: Seeking Emergency Extension For Leases
American Rice Inc. files a request for emergency
consideration of the debtor's emergency motion to further
extend time for the debtor to assume or reject unexpired
nonresidential real estate leases.

The debtor used its previous extension to address issues of
the bankruptcy, and the debtor is currently in the process
of negotiating a consensual plan of reorganization with its
creditors.  However, the process is not completed and the
debtor has not made final determinations concerning
assumption or rejection of the leases.  The debtor states
that it cannot reorganize if it loses the ability to assume
the leases.  The extension motion must be heard prior to
February 28, 1999 to avoid a potential forfeiture.  The
debtor does not expect opposition to the extension motion.

AR ACCESSORIES: Wallet Work's Plan Approved
AR Accessories Group Inc.'s subsidiary Wallet Works Inc.
has won confirmation of its amended liquidating
reorganization plan over the objection of the U.S. Trustee
acting in the case. The U.S. Bankruptcy Court in Milwaukee
at a hearing last week overruled in part the Trustee's
objection, finding that the plan does meet the best
interest of creditors test. The Trustee argued that Wallet
Works must meet its burden of proof that creditors
are receiving as much under the plan as they would receive
in a Chapter 7 liquidation. The Trustee also took issue
with the plan's release provisions, which purport to limit
the liability of the disbursing agent, professionals,
officers and directors and others. (The Daily
Bankruptcy Review and ABI Copyright c February 23, 1999)

AUSTRALIS HOLDINGS: Hearing For Order Converting Case
Upon application of the U.S. Trustee for the Southern
District of New York, a hearing will be held on March 18,
1999 at 10:00 AM, for an order converting the case of IN
RE: Australis Holdings Pty Limited AKA/DBA Australis
Holdings Ltd (Public) Australis Media Holdings Ltd
Regent Communications to a case under Chapter 7 of the
Bankruptcy Code. In the alternative the Trustee is seeking
dismissal of the Chapter 11 case.

BMJ MEDICAL: Order Extends Time To Assume/Reject Leases
The court entered an order in the case of BMJ Medical
Management, Inc., et al., extending the period within which
the debtors may assume or reject the Leases to and
including July 15, 1999.

BROTHERS GOURMET: Considering Two Bids
Brothers Gourmet Coffee Inc. is considering two bids for
the company as part of a bankruptcy court-authorized
auction held Wednesday. Brothers Chief Executive Officer
Donald Breen declined Friday to identify the prospective
buyers, who were required to submit bids of at least $24  
million. "Two look very close," Breen said. "They're not
apples to apples, so the company is evaluating them."

One group that bid for Brothers is headed by former Sunbeam
executives Lee Griffith and Kevin McBride, Griffith
confirmed Friday. He was president of Sunbeam's household
products division and McBride, the vice president. Both  
left the company last summer when Albert J. Dunlap was
fired as the company's chief executive officer.

Officials at Mother Parker's Coffee & Tea of Mississauga,
Ontario, one of Canada's largest coffee distributors,
declined to comment on wire-service reports that it was
among the bidders.

Brothers filed for Chapter 11 bankruptcy reorganization
Aug. 27, listing $41 million in debts and $29.5 million in
assets. The company is one of the largest wholesalers of
roasted gourmet coffee in the country, but has
had only one profitable year, 1994, since it went public in

For the second quarter ended June 30, Brothers posted
losses of $64 million on $13.9 million in sales. The bulk
of the losses, about $50 million, came from the loss of
"good will" as the company lost customers and cut back on  
promotional contracts.

Breen said the company's deadline for accepting a bid is a
March 15 hearing date in bankruptcy court. The company has
220 employees nationwide, including  between 40 and 50 at
its Boca Raton headquarters. (Palm Beach Post - 02/20/99)

CENTENNIAL COAL: Hearing To Consider Disclosure Statement
A hearing will be held on March 19, 1999 at 9:30 AM in the
U.S. Bankruptcy Court, 824 Market Street, 6th Floor,
Wilmington, Delaware to consider the adequacy of the
information contained in the Disclosure Statement filed by
the debtors, Centennial Coal, Inc., Centennial Resources,
Inc., C R Mining Company and B-Four, Inc.

COMMERCIAL FINANCIAL: U.S. Trustee Objects to Professionals
Joel Pelofsky, united States Trustee in the case of
Commercial Financial Services, Inc., CF/SPC NGU, INC.,
debtors, objects to the employment by the Official
Committee of Asset Backed Security Holders of Gable and
Gotwals as attorneys for the committee.  The Trustee
alleges that the firm has a conflict of interest that
renders the firm not "disinterested" as required by the
Bankruptcy Code.  According to the trustee, the firm is
conflicted by virtue of its relationship and representation
of NationsBank, both a member of the committee and a party
involved in ongoing litigation with the debtor over
disputed funds seized on the eve of bankruptcy.  Even
through the firm has agreed not to participate in any
matter on behalf of the Committee which is in direct
conflict with and is adverse to the interests of
NationsBank does not cure the conflict.

The Trustee also objects to the employment of Houlihan
Lokey Howard & Zukin, Inc. as financial advisors for the
committee.  The Trustee states that there is inadequate
disclosure to determine whether the proposed professional
has an impermissible conflict of interest with the debtors.

CROWN BOOKS: Seeks Extension To Exclusive Periods
Crown Books Corp. is seeking a 90-day extension of its
exclusive periods in which to file a plan and solicit
acceptances in order to review lease obligations and over
600 claims filed by the bar date, and "to explore and
develop various restructuring alternatives with maximum
creditor support." The motion seeks the extension to May 11
and July 11, respectively. (The Daily Bankruptcy Review and
ABI Copyright c February 23, 1999)

EIP MICROWAVE: Ceased Operations - Discussing Bankruptcy
EIP Microwave, Inc. announced that it has ceased operations
and is discussing the Company's bankruptcy options with its
legal counsel.

EIP Microwave manufactured microwave and radio frequency
test and measurement instruments, which are predominantly
used in the telecommunications, wireless and defense
industries. The Company's common stock trades on the OTC
Bulletin Board under the symbol "EIPM".

EQUALNET CORP: Hearing To Consider Disclosure Statement
A disclosure statement and plan under chapter 11 of the
Bankruptcy Code was filed on January 8, 1999 by debtor
Equalnet Corporation.  The hearing to consider approval of
the disclosure statement will be held at the U.S.
Bankruptcy Court, 515 Rusk Avenue Houston, Texas 77002,
Room 10A, 10th Floor, March 1, 1999 at 2:30 PM.

HIP HEALTH PLAN: Judge Okays Closing of 23 Health Centers
A state judge on Friday approved a plan to close the 23
health centers operated by HIP Health Plan of New Jersey by
March 31, but he allowed sick patients and pregnant women
to continue treatment with their own doctors.

Attorneys for the Department of Banking and Insurance
spelled out the state's plan to smooth the transition of
HIP's policyholders to new insurance companies and ensure
proper care for its sickest patients.

But Judge Jack L. Lintner left open the possibility that
the insolvent HMO may survive.  He scheduled a hearing for
March 2 to hear opposition from HIP's board of directors to
the state's liquidation plan. New Jersey HIP's New York
affiliate,  HIP Health Plans, is expected to present its
own proposal to regain control of  the HMO and restore it
to solvency at that hearing.

The state declared HIP insolvent in November, after the
HMO's debts reached $120 million. The Insurance Department
rejected three bids from potential buyers and ordered the
state's 20 other HMOs to accept HIP's members.

The judge opened Friday's hearing-in a standing-room-only
courtroom-by noting that he was mindful of important
precedents he would set as the state plans the first
liquidation of a health maintenance organization under
current law.

Under the state's plan, each of HIP's New Jersey health
centers will close by March 31, with six - including the
Paramus center on Eisenhower Drive - closing as early as
Feb. 28. The Paramus site on Sears Drive will remain open  
for administration until April 15, Deputy Attorney General
Josh Lichtblau said, but would close to patient care on
March 31.

As the six smaller health centers close, their doctors and
patient records will be transferred to the larger centers.
The state is soliciting bids from medical records companies
for safe and accessible storage of any records that  
patients do not pick up by the closing date. Special
provisions are made for patients with critical health
needs, including those hospitalized at the time the plan
shuts down; those with chronic or acute health conditions;
and women in the second or third trimester of pregnancy.
Insurance Department staff members are contacting each of
these patients individually to guide them through
enrollment in a new insurance company.

In addition, in an unprecedented arrangement, doctors
caring for these patients at the time they switch to new
insurance will be allowed to continue caring for them, even
if the doctors are not participants in the new HMO. The  
new HMO would be compelled to pay the doctors its rates.

Twenty hospitals, including Pascack Valley Hospital,
Hackensack University Medical Center, and St. Mary's
Hospital in Passaic, signed agreements to continue treating
HIP patients until March 31, although emergency
patients can go to any hospital.

An estimated 85 percent of HIP network doctors who treat
patients outside the health centers also are willing to
continue seeing them, said Barry Massey, the deputy
rehabilitator for HIP. These doctors and hospitals have
agreed to accept 75 percent of HIP's normal fees.
The state prohibited any balance-billing of patients for
fees that HIP does not pay, and the judge stated his
support for that position.   (Record New Jersey - 02/20/99)

HOME HEALTH: Posts Results of Operations
Home Health Corporation of America, Inc. (Nasdaq: HHCAC)
reported net revenues and results of operations for the
three and six months ended December 31, 1998.

Net revenues were $28.7 million for the second quarter of
fiscal 1999 compared to $45.7 million for the second
quarter of fiscal 1998. Significant factors  
contributing to the $17.0 million, or 37.2%, decrease in
net revenues included (i) implementation effective July 1,
1998 of the Medicare Interim Payment System (the "IPS") for
all of the Company's Medicare cost-reimbursed nursing  
agencies which decreased the Company's per-visit
reimbursement; (ii) a 44.9% decrease in Medicare nursing
visits during this period compared to the prior  
year resulting from a decline in physician referrals in the
marketplace; (iii) a 25% reduction in Medicare oxygen
reimbursement which was effective January 1,
1998; (iv) decreases in net product revenues due to
reductions in Medicare visits reducing cross-selling
opportunities; (v) decreases in net product  
revenues due to a reduction in sales staff as part of the
Company's fiscal 1998 restructuring plan; and (vi) a $4.1
million reduction in Medicare nursing services net revenues
recorded in connection with notices received regarding  
retroactive adjustments to prior year Medicare cost reports
and changes in estimated outcomes of prior year cost report
adjustments under appeal with Medicare.  

Net loss and diluted loss per share were ($44,939,000) and
($4.60), respectively, for the three months ended December
31, 1998 compared to net loss and diluted loss per share of
($23,856,000) and ($2.60), respectively, for the
comparable prior year period.

Net revenues were $62.6 million through the second quarter
of fiscal 1999 compared to $92.8 million through the second
quarter of fiscal 1998. Net loss and diluted loss per share
were  ($67,021,000) and ($6.86), respectively, for the six
months ended December 31, 1998 compared to net loss and
diluted loss per share of ($21,828,000) and ($2.38),
respectively, for the comparable prior year period.

Home Health Corporation of America, Inc. is a leading
provider of comprehensive home health care services and
products, delivering nursing and related patient
services, respiratory therapy services, infusion therapy
services and durable medical equipment.  The Company
currently owns and operates 44 branch locations
in Pennsylvania, New Jersey, Delaware, Maryland, Florida,
New Hampshire, Massachusetts, Illinois and Texas.

INTERSCIENCE COMPUTER: Announces First Quarter Results
Interscience  Computer Corp. (OTC BB:INTRQ) Tuesday
announced net income of $160,184; 3 cents per share, for
the quarter ended Dec. 31, 1998, all of which was generated
from continuing operations.

In the comparable period for 1997, the company had a loss
from continuing operations of $340,503; 13 cents per share.  
During the quarter, the company completed its
reorganization and on Dec. 16, 1998 the bankruptcy court
issued a final decree closing the bankruptcy proceedings
that began on March 6, 1997.

Also, during the quarter, the company reduced its loan
balance with the principal lender by approximately
$658,000.  The remaining principal balance is approximately
$200,000, down from $2,250,000 as of fiscal year end 1997.

Walter Kornbluh, the company's president, stated that
"after extensive restructuring, the company's operations
are now on a positive cash flow basis. The company
continues to look for possible acquisitions to increase
shareholder  value."

KENNY ROGERS: Court Approves Nathan's Famous Acquisition
On February 22, 1999, Nathan's Famous, Inc.  
(NASDAQ:NATH) reports that the U.S. Bankruptcy Court for
the Middle  District of North Carolina, Durham Division,
has confirmed the Joint Plan of  Reorganization of the
Official Committee of Franchisees of Roasters
Corp. and  Roasters Franchise Corp., operators of Kenny
Rogers Roasters Restaurants.  Through the Plan of
Reorganization, Nathan's will acquire all of
Roasters Corp.  and Roasters Franchise Corp.'s intellectual
property rights, including  trademarks, recipes and
franchise agreements, in exchange for $1,250,000 in  cash.
Nathan's completion of the transaction, which is currently
expected to occur on April 1, 1999, is subject to certain
conditions outlined in the Plan  of Reorganization.

Wayne Norbitz, President of Nathan's stated: "We are quite
pleased with the outcome and are anxious to commence
working with participating Kenny Rogers' franchisees upon
completion of the transaction."

The Nathan's Famous retail system is currently comprised of
25 Company-owned units, 164 franchised or licensed units,
and over 500 Branded Product points of distribution,
located in twenty-nine states, the District of Columbia and
two foreign countries.  Additionally, Nathan's had
previously entered into a purchase agreement to  
acquire the Miami Subs chain of restaurants.

LEVITZ FURNITURE: Seeks To Extend Exclusivity
The debtor, Levitz Furniture Incorporated, et al., seeks to
extend the exclusive periods during which the debtors may
file reorganization plans and solicit acceptances for such
plans.  The debtors seek an order extending the plan
proposal period for approximately 100 days through and
including June 7, 1999 and the solicitation period until
August 6, 1999.

The debtors state that they have taken significant strides
in their reorganization efforts, including steps to
refinance their post-petition lending facility, restructure
their real estate portfolio, and return their business to
profitability.  The debtors believe that it is in the best
interests of their estates and creditors to seek this
extension so that the debtors may continue their
refinancing and restruction efforts and engage in
substantive negotiations with major creditor constituents
regarding a consensual reorganization plan.

The debtors have been negotiating an amendment of the DIP
facility under which it will be extended through June 7,
1999.  Also, the debtors expect to enter into an agreement
with a third party for the sale and leaseback of certain
owned and leased properties.  The debtors' management has
changed significantly, and 27 stores have closed.  The new
senior management has also committed itself to a warehouse
rationalization program to reduce warehouse operating
expenses by approximately $7 million.

MAXICARE HEALTH: Posts Fourth Quarter Results
Maxicare Health Plans Inc. (Nasdaq/NM:MAXI) announced that
it reported a net loss of $5.7 million, or 32 cents per
share, for the fourth quarter of 1998, which included a
$6.5 million charge for litigation, provider  
insolvency/impairment and an increase to the loss contracts
and divestiture costs reserve, as compared with a net loss
of $11.4 million, or 64 cents per share, for the comparable
quarter a year ago, which included a $3.0 million  
charge for management restructuring costs and a $7.5
million charge to increase health-care claims reserves.

"We enter 1999 having essentially completed the company's
strategic plan to divest itself of its noncore operations,
and we are positioned to report significant improvements in
operating earnings from the company's core markets.
Our decision to focus management's time and resources on
our core operations is yielding positive results," said
Peter J. Ratican, chairman, president and chief executive
officer of Maxicare.

Last year, Maxicare implemented a strategic restructuring
program to exit unprofitable markets by asset sales or plan
closings and to concentrate on its health-care businesses
in California, Indiana and Louisiana.

For the fourth quarter ended Dec. 31, 1998, premium
revenues were $175.4 million, an increase of $1.8 million,
or 1.0 percent, as compared with the fourth quarter of
1997.  For the fourth quarter of 1998, commercial premiums
decreased $8.6 million, or 7.4 percent, to $107.4 million,
as compared with the fourth quarter of 1997, primarily due
to the sales of the Wisconsin and Illinois health plans
that were effective as of Sept. 30, 1998.

For the fourth quarter of 1998, commercial premiums for the
core operations increased $5.9 million, or 6.4 percent, as
compared with the fourth quarter of 1997 as a result of a
3.9 percent increase in membership over the fourth  
quarter of 1997, primarily in California and Indiana, and a
1.9 percent increase in the average commercial premium
revenue per member per month ("PMPM").

For the fourth quarter of 1998, governmental premiums
increased $10.4 million, or 18.1 percent, to $68.0 million
as a result of an 11.1 percent increase in membership,
primarily generated by growth in the Medicaid line of
business in California and growth in the Medicare line of
business in both California and Indiana, offset in part by
a $3.7 million decrease in Medicaid premiums as a  
result of the sale of the Wisconsin health plan effective
as of Sept. 30, 1998.

Total premium revenues for the year ended Dec. 31, 1998,
increased 10.5 percent to $727.2 million from $658.1
million for the same period in 1997, primarily  
due to a 10.7 percent membership increase. The average
commercial premium revenue PMPM for the year ended Dec. 31,
1998, increased 1.1 percent compared with the same period
in 1997.

Total health-care expenses for 1998 increased $53.5
million, as compared with the same period in 1997 as a
result of the increase in membership and an  
increase in pharmacy costs.

Maxicare is a managed health-care company, with operations
in California, Indiana and Louisiana that currently have
approximately 490, 000 members. The company also offers
various employee benefit packages through its subsidiaries  
Maxicare Life and Health Insurance Co. and HealthAmerica

MOBILEMEDIA: Mails Supplemental Disclosure To Class 6
MobileMedia Corporation announced that on Friday February
19, 1999, it mailed supplemental disclosure material and
ballots to its Class 6 unsecured creditors, including
holders of its 9 3/8% notes and 10 1/2% notes.

As required by the U.S. Bankruptcy Court for the District
of Delaware, MobileMedia is resoliciting votes from that
creditor class on its Third Amended Joint Plan of
Reorganization, which provides for the merger of  
MobileMedia into Arch Communications Group, Inc. (Nasdaq:

The deadline for re-voting by Class 6 creditors is March
23, 1999. MobileMedia's confirmation hearing on the Plan is
scheduled to resume on March 26, 1999.

QUADRAX CORP: Order Grants Extension To File Plan
The deadline for the filing of a plan of reorganization and
Disclosure statement by the investor, individually, or to
be joined in by the debtor is extended to February 28,

RAND ENERGY: Requests Hearing on Bid Procedures
The debtor, Rand Energy Company and KUKUI,INC entered into
an agreement whereby the debtor agreed to sell certain oil
and gas properties in New Mexico and Texas.  The debtor
will receive aggregate cash consideration of $7.8 million.  
The purchase price is the highest and best offer received
by the debtor for the purchase of the assets.  The debtor
now seeks an order approving the procedures agreed to by
the parties relating the sale of the assets.  Any offer by
a third party to purchase the assets must exceed KUKUI's
purchase price by $150,000.

READING CHINA: Taps R.F. Stengel As Interim Management
The debtors, Reading China and Glass, Inc., and its
affiliated debtors seek a court order authorizing
employment and retention of R.F. Stengel & Co., Inc. as
interim management of Reading China and Glass, Inc.  The
firm's standard rates for this work are $2,500 per day for
R. Stengel, $1,700 per day for T. Cawley, $1500-$2500 per
day for professional staff.  The debtor has agreed to
provide the Stengel company with a retainer of $30,000.

READING CHINA: Seeks Extension of Exclusivity
The debtors, Reading China and Glass, Inc. and affiliated
debtors seek to extend the debtors' exclusive periods in
which to file a Chapter 11 plan and to solicit acceptances

This is the debtor's first request for such an extension.  
The debtors seek the entry of an order extending by 120
days the exclusive periods within which to file a plan or
plans of reorganization, through and including June 26,
1999 and the period to solicit acceptances thereof, through
and including August 26, 1999.

The debtors' efforts have been directed towards securing
postpetition financing, closing and liquidating the
inventory of 15 marginal or unprofitable store locations,
retaining a firm to evaluate its store leases, and
addressing issues of creditors including reclamation
demands.  The debtors state that it would simply be
premature to require the debtors to prepare and file a plan
of reorganization prior to February 26, 1999.

SATO KOGYO: Seeking Loan Forgiveness
Ailing general contractor Sato Kogyo Co. said on Monday
that it has asked Dai-Ichi Kangyo Bank, Hokuriku Bank and
10 other creditor banks for loan forgiveness totaling some
120 billion yen.   Dai-Ichi Kangyo and Hokuriku were asked
to shoulder some 70 pct of the total.

If the loans are written off, Sato Kogyo, based in Toyama,
central Japan, will dispose of about 128 billion yen in
losses in the next business year ending in March 2000,
company officials said. Of the total losses, 35 billion yen
are from shutting down subsidiaries, and 4 billion yen from
real estate sales. As part of a business rehabilitation
scheme, Sato Kogyo will reduce its payroll by 500 in the
next business year and an additional 300 in the following
year to March 2001.

Of the company's 64 subsidiaries and affiliates, 10 will be
closed before the end of the current year to March 31, and
eight more in the next term.  The company also plans to
slash executives' pay by 20 pct and introduce an  
executive officer system and cut the number of board
members, the officials said.

Sato Kogyo plans to approach a second-tier group of
creditors including  Hokuriku Bank for loan forgiveness,
the sources said.   Sato Kogyo had about 396 billion yen in
interest-bearing debts and 96 billion yen in debt
guarantees as of last Sept. 30.

The company has already announced plans to book a total of
50 billion in special losses in the year ending March 31,
including a charge for subsidiary liquidation, as part of
its reconstruction efforts.

It has also been exploring the possibility of issuing about
20 billion yen worth of new shares for third-party
allocations. The company may postpone the capital increase
to April or later to focus on debt relief talks with

Sato Kogyo is the fourth general contractor in Japan to ask
for creditors' debt forgiveness following Aoki Corp.,
Haseko Corp. and Fujita Corp. Dai-Ichi Kangyo Bank said
Monday it will continue supporting Sato Kogyo Co. (Jiji
Press English News; 02/22/99)       

THE J.PETERMAN: It Appears To Be Over
Founder John Peterman said Monday that last-ditch attempts
to find a buyer for his struggling company had failed. He
said he expects a U.S. Bankruptcy Court judge to set a date
Tuesday for an auction at which the company's
assets  will be sold to the highest bidder, with proceeds
going to the company's  creditors.

"Over the weekend, we had a buyer, but their proposal
wouldn't work" both in terms of price and structuring,
Peterman said in a telephone interview. "The
court wouldn't have accepted it.  We'll continue to try to
pull it out of the fire until the auction," he said.

In its most recent set of court filings, Peterman listed
debts of more than  $14 million. The company has remained
in business in recent weeks through a series of stopgap
loans provided by its only secured creditor, Heller
Financial of Chicago, now owed nearly $10 million. Those
loans have not included money to buy spring merchandise,
and the company is now two weeks overdue in
putting out  its spring catalog, Peterman said.

Peterman said Heller, a primary investor in last year's
plan to open 70 J. Peterman retail stores, refused to
extend additional credit that might have allowed the
company to work its way out of problems. Late last year,
when the company ran into snags in opening new stores and a  
slowdown in catalog sales, "Heller squeezed down at a time
when we needed flexibility," Peterman said.

Early last year, John Peterman planned a retail expansion
that included a proposed 50 stores and 20 catalog outlets.
Peterman recruited executives from J. Crew, Calvin Klein
and The Gap, raised $10 million from private investors and
made plans to target upscale markets.

By the end of the year, though, there were layoffs and a
freeze on new store openings, followed last month by the
bankruptcy filing.
USN COMMUNICATIONS: Case Summary & 20 Largest Creditors
Debtor:  USN Communications, Inc.
         10 South Riverside Plaza, Suite 2000
         Chicago, Illinois 60606

Type of business: Telecommunications services

Court: District of Delaware

Case No.: 99-383    Filed: 02/18/98    Chapter: 11

Debtor's Counsel: Robert J. Dehney, Esq.
                  Morris, Nichols, Arsht & Tunnell
                  1201 North Market Street
                  P.O. Box 1347
                  Wilmington, Delaware
                  (302) 658-9200

Total Assets:            $115,336,000
Total Liabilities:       $285,993,209

No. of shares of common stock         23,585,741  

20 Largest Unsecured Creditors:

   Name                              Nature         Amount
   ----                              ------         ------
Indenture - 14 5/8% Senior
Discount Notes                     Bond Debt    150,799,339

Indenture - 9% Convertible
Subordinated Discount Notes        Bond Debt     34,096,740

Indenture - 14% Senior Discount
Notes                              Bond Debt     14,617,175

Indenture - 9% Consent convertible Bond Debt     
Subordinated Notes                               11,008,002

Deloitte & Touche LLP              Trade          1,814,144

Corporate Concepts, Inc. Office Equipment         1,374,829
Trizechahn                     Contractor         1,239,597
Wilson Contractors, Inc.       Contractor         1,080,323
APAC Customer Service               Trade           897,634
Ameritech Industry Services         Trade           675,894
Network Programs, Inc.              Trade           657,841
Leopardo Companies Inc.             Trade           566,640
Transcom USA , Inc.                 Trade           476,199
Arthur Andersen LLP                 Trade           475,516
Vantive Corp.                       Trade           377,954
The Sutherland Group                Trade           322,369
RR Donnelly Receivables             Trade           317,411
Comdisco                            Trade           260,994
Streetsmart Resources, Inc.         Trade           220,222
Pagemart, Inc.                      Trade           219,276


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

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 1999.  
All rights reserved.  ISSN 1520-9474.  

This material is copyrighted and any commercial use, resale
or publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly
prohibited without prior written permission of the

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