TCR_Public/990303.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, March 3, 1999, Vol. 3, No. 42

                   Headlines

AAMES FINANCIAL: Capital Z Financial Acquires Control
AFP IMAGING: Files Quarterly Report
BENNETT FUNDING: Trustee Estimates 36-43% Return
BRADLEES: Files Prospectus With SEC
CELLEX BIOSCIENCES: Hearing on Disclosure Statement

CENDANT CORP: Announces Increase In Stock Buyback Program
CHATCOM INC: Results of Operations For Quarter
CONTINENTAL AIRLINES: Results of Operations
DIAMOND ENTERTAINMENT: Third Quarter Results
GEOTEK COMMUNICATIONS: Nextel Under Fire

HARVARD INDUSTRIES: Files Quarterly Report With SEC
IRIDIUM: In Danger of Breaching Bank Agreement                
MARVEL ENTERPRISES: Spider Man Set For The Big Screen
MEDIA LOGIC: Hearing on Motion For Appointment of Trustee
NU-KOTE: Future Graphics' Committee Seeks Counsel

ONCOR INC: Case Summary & 20 Largest Unsecured Creditors
OXFORD HEALTH PLANS: Announces Quarter Results
PARAGON TRADE: P & G Settlement Hearing Reset
OKURA & CO: Seeking Extension To Assume/Reject Leases
ONEITA INDUSTRIES: Seeks Time To Assume/Reject Leases

PENN TRAFFIC: Announces Filing Financial Restructuring
PHYSICIANS RESOURCE: Retires $7M Senior Bank Debt
READING CHINA: Seeks Order Establishing Bar Date
RINCON ISLAND: Baker Hughes Seeks To Terminate Exclusivity
ROYAL OAK MINES: Receives CCAA Protection

THE J. PETERMAN: Order Approves Attorneys For Committee
THE J.PETERMAN: Preliminary Order Approves KPMG
WATKINS-JOHNSON: Looking for a Buyer
WINDSOR ENERGY: Baker Hughes Seeks To Terminate Exclusivity
WORLDCORP: Reorganization Plan Already Negotiated

                   *********

AAMES FINANCIAL: Capital Z Financial Acquires Control
-----------------------------------------------------
On February 10, 1999, Capital Z Financial Services Fund II,
L.P., a Bermuda limited partnership acquired control of
Aames Financial Corporation, a Delaware corporation by
virtue of its purchase from the company on such date of
26,704 shares of Series B Convertible Preferred Stock and
48,296 shares of Series C Convertible Preferred Stock for
an aggregate purchase price of $75 million. The purchase
was made pursuant to that certain Preferred Stock Purchase
Agreement, dated as of December 23, 1998, by and between
the company and Capital Z, as amended February 10, 1999).
Following the Initial Purchase, Capital Z held 100% of the
outstanding Series B Stock and 96.60% of the outstanding
Series C Stock. The remaining outstanding shares of Series
C Stock were purchased by an unaffiliated designee of
Capital Z concurrently with the Initial Purchase by Capital
Z.

Effective February 10, 1999, Melvyn Kinder, Lee Masters and
John C. Getzelman resigned from the company's  Board of
Directors.

Capital Z appointed the following initial Series B
Directors to the company's Board of Directors: Steven M.
Gluckstern, Mani A. Sadeghi, Adam Mizel and David A.
Spuria.

As part of the Purchase Agreement, the company agreed to
solicit approval of the stockholders of the
Recapitalization in order to allow the Recapitalization and
the Rights Offering to occur. Neither of these events may
be consummated unless and until the Recapitalization is
adopted by the  stockholders.


AFP IMAGING: Files Quarterly Report
-----------------------------------
AFP Imaging Co. reports to the SEC that for the six months
ended December 31, 1998, sales decreased $2,636,500 or
14.8% compared to the same six month period ending December
31, 1997. Net sales decreased $1,074,000 or 12% for the
quarter ended December 31, 1998.  

The Company's product lines experienced a general decrease
in sales volume. The most significant was in the graphic
arts business. The Company continues to explore
and develop potential distribution channels and new
products through engineering efforts, aggressive marketing,
as well as repositioning its product pricing in
the marketplace. Fluctuating world markets, combined with
the strong US dollar, continue to adversely effect the
Company's export sales. Gross profit as a percent of sales
decreased 3.8 percentage points. There was a slight
increase in material costs due to the product mix, in
addition to certain fixed overhead costs being distributed
over the lower sales volume.


On October 29, 1998, the Company received a letter from
NASDAQ that the Company's shares over the past 30 days did
not maintain a closing bid price greater than $1.00.
Accordingly, NASDAQ indicated that the Company's common
stock would be delisted from the NASDAQ SmallCap Exchange,
and would trade on the NASDAQ Bulletin Board System. As per
NASDAQ rules, on January 27, 1999, the Company sent a
letter to NASDAQ to request an oral hearing in response to
such letter.


BENNETT FUNDING: Trustee Estimates 36-43% Return
------------------------------------------------
The disclosure statement filed by Bennett Funding Group
Inc.'s ("BFG") chapter 11 trustee anticipates that the
failed equipment leasing company's general unsecured
creditors will recover between 36 percent and 43 percent of
their claims. Filed on Jan. 5, five days after the
corresponding reorganization plan, trustee Richard
Breeden's disclosure statement predicts that about $720
million ultimately will be collected, with about $205
million coming from estimated future recoveries from
litigation against professionals that worked on the case
now dubbed the largest Ponzi scheme in the 20th
century. The disclosure statement also places the total
amount of claims asserted against the company at about $958
million by the case's end, including $641 million in claims
from investors alone. However, the trustee pointed out that
the estimate is still substantially lower than the $5.1
billion in claims originally filed in the case which,
through thousands of claims objections and the
elimination of duplicative and overstated claims, was
eventually whittled down to the nearly one billion dollar
figure. The filing's projections, according to Breeden,
depend on approval of the plan and related settlements,
reasonable success of the public offering of the company's
interests in Equivest Finance Inc., and "a modest amount of
both luck and cooperation from all concerned in this case."
(The Daily Bankruptcy Review and ABI Copyright c March 2,
1999)


BRADLEES: Files Prospectus With SEC
-----------------------------------
Bradlees Inc. filed a Prospectus with the SEC relating to:

  . 7,267,424 shares of Common Stock of Bradlees, Inc.;

  . $36,000,000 of 9% Convertible Notes issued by Bradlees
Stores, Inc. and the Common Stock issuable upon conversion
of the Convertible Notes; and

  . The guarantee by Bradlees, Inc. and New Horizons of
Yonkers, Inc. of the 9% Convertible Notes.


Bradlees Inc. is  registering these securities on behalf of
the Selling Securityholders.  The Selling Securityholders
received these securities, directly or indirectly,
pursuant to the company's  Plan of Reorganization in
exchange for the cancellation of various indebtedness owed
by the company to them.

The Selling Securityholders may offer these securities
through public or private transactions, on the Nasdaq
National Market, at prevailing prices or at privately
negotiated prices.

The Common Stock offered by this Prospectus is listed on
the Nasdaq National Market on a "when issued" basis under
the symbol "BRADV." On February 12, 1999, the last reported
sale price of the company's Common Stock was $5.50 per
share.


CELLEX BIOSCIENCES: Hearing on Disclosure Statement
---------------------------------------------------
A hearing to consider approval of a disclosure statement of
the debtor, Cellex Biosciences, Inc., will be held on April
14, 1999 at 10:00 AM in Courtroom No. 228A U.S. Courthouse,
316 North Robert Street, St. Paul, Minnesota.


CENDANT CORP: Announces Increase In Stock Buyback Program
---------------------------------------------------------
According to a report in The Wall Street Journal on March
2, 1999, Cendant Corp. said its board authorized a $200
million increase in the company's share repurchase program
to $1.4 billion.  The franchising and marketing concern
currently has 801 million shares outstanding.  Since
December, Cendant has purchased about 59 million common
shares in the open market and 7.1 million shares as part of
an asset sale.

Cendant has been divesting itself of businesses since last
year, when accounting fraud was found at the former CUC
International Inc., which became part of Cendant in a 1997
merger.


CHATCOM INC: Results of Operations For Quarter
----------------------------------------------
Chatcom, Inc. reports the results of its operations for the
nine months ended December 31, 1998 compared to the nine
months ended December 31, 1997.

Net sales during the nine months ended December 31, 1998
decreased $3.6 million or 59% compared to the nine
months ended December 31, 1997.  The decline in net sales
during the first nine months of fiscal 1999 compared to the
first nine months of fiscal 1998 resulted primarily from
decreased shipments to both domestic VARs ($2.2 million) as
domestic direct customers ($590,000) which the Company
believes is attributable to the declining demand for remote
control type remote access solutions, and a continued
decrease in selling, advertising and marketing expenditures
including marketing support for VAR's during fiscal
1999 due to the Company's cash flow constraints, and a
decrease in net shipments to the Company's Singapore
distributor ($575,000) as a result of the Asian
economic crisis in the later half of 1997.


The Company recorded net losses of $7.8 million and $4.6
million during fiscal years ended March 31, 1998 and 1997,
respectively, and recorded a net loss of $2.3 million
during the first nine months of fiscal 1999.


CONTINENTAL AIRLINES: Results of Operations
-------------------------------------------
Comparison of 1998 to 1997.  Continental Airlines Inc.
recorded consolidated net income of $383 million and $385
million for the years ended December 31, 1998 and 1997
(including special charges), respectively.  Net income in
1998 was significantly impacted by a $77 million ($122
million before taxes) fleet disposition/impairment loss
resulting from the Company's decision to accelerate the
retirement of certain jet and turboprop aircraft.
Management believes that the Company benefitted in the
first quarter of 1997 from the expiration of the aviation
trust fund tax (the "ticket tax").  The ticket tax was
reinstated on March 7, 1997.  Management believes that the
ticket tax has a negative impact on the Company, although
neither the amount of such negative impact directly
resulting from the reimposition of the ticket tax,
nor the benefit realized by its previous expiration, can be
precisely determined.

Passenger revenue increased 10.6%, $706 million, during
1998 as compared to 1997.  


DIAMOND ENTERTAINMENT: Third Quarter Results
---------------------------------------------
Diamond Entertainment Corporation reports a  net loss for
the nine months ended December 31, 1998 of
approximately $553,000 as compared to a net income of
approximately $200,000 for the same period last year. The
primary reason for the net loss was the Company's
operating loss of approximately $472,000.

The Company's operating loss for the nine months ended
December 31, 1998 was $471,740 as compared to an operating
profit of $162,493 for the same period last year. The
Company's operating loss arose primarily from lower sales
resulting in reduced gross profit, offset by a reduction in
operating expenses of approximately $212,000.

The Company's sales for the nine months ended December 31,
1998 and 1997, were $3,671,585 and $6,987,527 respectively.
The Company's sales decreased by approximately $3,316,000
from the same period a year earlier with decreased
video and toy product sales of approximately $1,256,000 and
$2,076,000 respectively. The lower video product sales for
the period ended December 31, 1998, were primarily the
result of lower purchases by three of the Company's
major retailers. One of the Company's major video retailers
was sold, the second retailer experienced financial
difficulties and the third opted to purchase videos from
the Company's competitors. The lower toy product sales
when compared to the same period a year earlier was
attributed to higher sales realized from the initial roll
out of the Company's new toy line during the previous
year's holiday season. Sales of the Company's products are
generally seasonal resulting in increased sales starting in
the third quarter of the fiscal year. The Company expects
the sales to increase in the fourth quarter of fiscal year
ending March 31, 1999 to partially offset lower sales
experienced during the first three quarters of the current
fiscal year.


GEOTEK COMMUNICATIONS: Nextel Under Fire
----------------------------------------
Land Mobile Radio reports on March 1, 1999 that after
Nextel Communications Inc. received conditional approval
from the Delaware Bankruptcy Court to buy all 191 900 MHz
licenses of Geotek Communications Inc. [GOTK] for $150
million (see LMRN, Feb. 19), SMR operator Mobex
Communications Inc. filed a motion against Nextel's request
to have a 1995 consent decree lifted. And adding insult to
injury was the disclosure that  Nextel reported an
astounding $412.9 million loss for the fourth quarter, even
as it is approaching the 3 million subscriber mark.

"Just three years after Nextel signed the consent decree,
Nextel wants us to believe that the dispatch industry no
longer needs protection, even after it swallowed up
industry competitors like Pittencrief [Commnications Inc.]
and ICE," said John Reardon, general counsel for Mobex.  
"We cannot eliminate competition within an entire industry
to satisfy the needs of one company."

The three-and-a-half-year-old decree was arranged between
Nextel and the Department of Justice (DoJ) in 1995 after
concerns were raised by the DoJ that Nextel would
monopolize the 900 MHz band due to the large amount of
spectrum it already owned.

Nextel said the consent decree only covered specific
markets in the 900 MHz band, which affected about $131
million of the total $150 million sale price for Geotek's  
licenses.  According to Reardon, the consent decree is a
10-year agreement between the DoJ and Nextel in which the
ESMR giant vowed not to be active in the 900 MHz  
band.  Established in 1995, part of the agreement called
for Nextel not to ask for modifications during the first
five years.

"They agreed not to show their face in court for five
years. Now they are saying three-and-a-half years down the
road that there is something they didn't foresee [in the
marketplace]," Reardon said. "We find that disingenuous."

"If this agreement is not upheld, one SMR player will
continue to monopolize the dispatch industry," said Mobex
President and CEO Frank Casazza.  "The result will be
detrimental to hundreds upon thousands of businesses,
utilities and governmental agencies that depend upon SMR as
the primary means for communicating with their mobile work
force." Casazza claims that customers without any other
alternatives will be forced to use Nextel's service at a
rate increase of about 200 to 300 percent.  Nextel has 120
days from Feb. 17 to resolve the matter before it loses an  
opportunity to buy the Geotek frequencies.

Nextel's biggest monetary loss yet came this quarter,
amidst expectations that the company would improve its
financial position. In statements released with its
financial earnings, the company did not offer an
explanation for the fourth quarter loss of $412.9 million,
or $1.43 per share.  However, the results also showed
average revenue per user (ARPU) of $70, the highest in the  
industry.

Nextel reported that subscriber adds for the year were more
than 1.5 million for a total of 3.96 million subscribers.  
More than 372,500 were added during the fourth quarter.

"Our differentiated wireless service has produced solid
growth in subscriber usage and revenue while simultaneously
enhancing cash flow," said Dan Akerson, chairman and CEO.
"In 1999 we look forward to further expanding our wireless  
service offerings and Nextel's appeal to high-end wireless
users by introducing new products and services which will
enable even greater wireless communications productivity."

Consolidated revenue was $519.6 million for the fourth
quarter, more than double 1997's fourth quarter results of
$275 million. Consolidated revenues for 1998 were $1.84
billion, compared to $738.8 million for 1997.  Earnings
before interest, taxes, amortization and depreciation
(EBITDA) increased to $41.7 million.

Nextel also announced its first international roaming  
agreement in conjunction with a new iDEN handset being
released by Motorola Inc. [MOT].  Under the terms of its
agreement with GSM provider Teleglobe Communications Corp.,
Nextel customers traveling in Europe will be able to  
place calls on the new i2000 handset.  The new handset is a
dual-mode, 800 MHz/900 MHz phone that works on both iDEN
and GSM networks.  In exchange, Teleglobe customers will be
able to use their GSM handsets while in the United  
States. However, the agreement does not cover dispatch
radio services.  The agreement is expected to be extended
in the future to other countries with iDEN networks
including Japan, the Philippines, Brazil, China, Canada and
Mexico.  The new handset product will be available in the
third quarter. Copyright Phillips Publishing, Inc. Land
Mobile Radio-03/01/99


HARVARD INDUSTRIES: Files Quarterly Report With SEC
---------------------------------------------------
Harvard Industries Inc. filed a quarterly report with the
SEC for the quarterly period ended January 3, 1999.
Effective November 24, 1998, the Company emerged from
Chapter 11 bankruptcy. For the three months ended January
3, 1999 compared to the three months ended December 31,
1997, consolidated sales decreased $67,836 from $197,052 to
$129,216, or 34.4%. Aggregate sales for the operations
designated for sale or wind down decreased approximately
$68,447 from $80,033 to $11,586 as the Company's
divestiture program nears completion. Sales for the
remaining operations increased $611 from $117,019 to
$117,630 as new business was partially offset by
the wind down of older programs.

The net income (loss) increased from ($5,519) to
$152,803.


IRIDIUM: In Danger of Breaching Bank Agreement                
----------------------------------------------
Satellite Today reports on March 1, 1999 that the entire  
satellite industry is waiting with bated breath for Iridium
LLC [IRIDF] to negotiate new terms with its bankers.  
Rightly or wrongly, Iridium's progress is being viewed by
many in Wall Street as the gauge on which to base all  
satellite stocks, so the company's admission that it is in
danger of breaking banking covenants is not being taken
lightly.

Iridium chairman, Ed Staiano, yesterday blamed the delay in
the manufacture of the company's satellite handsets and
poor marketing on the part of some of the company's
partners.  So much for the company's $140 million global
marketing campaign.

Staiano said Iridium's business plan is now six months to
nine months behind schedule because of the problems.  The
company now will sit down with its bankers in a bid to
renegotiate its loan terms. However, asked about  
bankruptcy, Staiano reportedly said it is "highly unlikely"
that would happen  to Iridium.  More to the point, it's
highly unlikely that parent company  Motorola Inc. [MOT]
would allow that to happen. Copyright Phillips Publishing,
Inc. SatelliteToday-03/01/99


MARVEL ENTERPRISES: Spider Man Set For The Big Screen
-----------------------------------------------------
Publisher Marvel Enterprises Inc. and Sony Pictures  
Entertainment have settled their lawsuits that have kept
Spider Man off the big screen for more then a decade.

"It's a great day for us," Marvel Enterprises president and
chief executive Eric Ellenbogen said. "The last vestiges of
bankruptcy and previous entanglements are now gone. The
company is totally freed. And its most important property
is now going to become a major motion picture."  Under the
deal, which settles lawsuits over ownership of film rights
to the character and was signed on the eve of trial, Marvel
and Sony agreed to launch a Spider-Man franchise, with Sony
producing the movie. The settlement disclosed Monday was a
major boost for Spider-Man's publishing home, Marvel
Enterprises, which was formed last October after Marvel
Entertainment Group emerged from bankruptcy and combined
with Toy Biz Inc.

There was no announcement on when a movie project would
begin, though Spider-Man had been among the most prized
characters never to be put on film.  Spider-Man has been
kept off the screen because of more than a decade of
business problems, including bankruptcies of at least three
companies linked to  the character, and competing claims in
court to the rights. The years of lawsuits and counter-
lawsuits now before Superior Court Judge Aurelio Munoz have
generated 60 boxes of court documents.

The settlement resolves competing lawsuits by Marvel and
Sony. It also settles claims by Metro-Goldwyn-Mayer, which
had contended it had acquired the rights from a number of
now-defunct film companies. Last month, MGM suffered a
setback when a judge rejected those claims. MGM  
had said it would appeal. An MGM spokesman declined to
comment other than to confirm MGM had resolved its disputes
in the matter. The settlement doesn't affect claims by yet
another litigant, Viacom Inc., which are still scheduled
for trial this week. Viacom contends it holds the  
television distribution rights to any Spider-Man movie.


MEDIA LOGIC: Hearing on Motion For Appointment of Trustee
---------------------------------------------------------
The debtor, Media Logic, Inc. requests that the court
schedule an emergency hearing on the motion of the debtor
for appointment of a Chapter 11 Trustee.  While the debtor
negotiated a sale of substantially all of its assets, the
entire board of directors resigned on February 22, 1999,
prior to closing of the sale, and the debtor can not now
function as a legal entity.  The debtor requests the
appointment of a Chapter 11 Trustee since the Buyer will
not proceed with the purchase of the debtor's assets if
there is a delay in the sale.


NU-KOTE: Future Graphics' Committee Seeks Counsel
-------------------------------------------------
The Official Committee of Unsecured Creditors of Future
Grpahics Inc., seeks authority to hire Kurlbaum Stoll
Seaman & Mustoe, PC as lead bankruptcy counsel and Ortale,
Kelley, Herbert & Crawford as local counsel.

The firms will analyze the assets of the debtor, and any
pre-petition transfers to determine if there are potential
causes of action that the Committee may have against third
parties.  The firms will analyze the assets to evaluate
substantive consolidation, the firms will review pleadings,
analyze the debtor's disclosure statement and plan and
represent the Committee with respect to bankruptcy issues,
and any adversary proceedings.  The firms will coordinate
and confer with counsel for other committees in order to
share information and minimize duplication.

The current range of hourly rates for lawyers of both firms
is $110 to $175.


ONCOR INC: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Oncor Inc.
        209 Perry Parkway
        Gaithersburg, Maryland 20877

Filed: 02/26/99   Case Number: 99-437  Chapter 11

Type of Business of debtor: Research and preclinical
studies for the purpose of developing genetic test systems
for the detection and managment of significant life-
threatening cancers.

Debtor's Attorney: Pauline K. Morgan
                   Edwin J. Harron
                   Young Conaway Stargatt & Taylor LLP                                                                                                 
                   11th Floor, Rodney Square North
                   PO Box 391
                   Wilmington , Delaware 19899-0391

Total Assets: $7,415,000
Total Liabilities: $6,506,000

Fixed liquidated unsecured debt: $4,306,000
Contingent unliquidated unsecured debt $2,260,000

Number of shares of preferred stock: Series A 494 - 1
holder
Number of shares of common stock: 32,607,299

Creditors Holding 20 Largest Unsecured Claims:

Creditor                                      Amount
--------                                      ------
Saul Holdings LTD Partnership               $490,585
Johns Hopkins University                     473,310
VYSIS                                        405,373
Don Schaaf & Friends, Inc.                   297,687
Pennie & Edmonds                             211,719
Bob Hohman                                    69,000
Morrison & Foerster, LLP                      53,433
Dilworth & Barrese                            48,376
American Express                              48,164
Federal Express                               45,443
Bowne of New York City, Inc.                  43,833
Burns, Doan, Swecker & Mathis                 42,884
Morrow & Company                              42,701
Venable Baetjer & Howard                      41,699
Blank Rome Comisky McCauley                   38,508
ATP, Inc.                                     37,541
Porter, Levay & Rose, Inc.                    37,087
VWR, Scientific, Inc.                         36,996
Pall Gelman Sciences, Inc.                    33,865
Comprehensive Reimbursement Consultants, Inc. 33,440


OXFORD HEALTH PLANS: Announces Quarter Results
----------------------------------------------
On February 25, 1999, Oxford Health Plans, Inc.
(NASDAQ:OXHP) announced a net loss of $18.8 million, or
$.23 per common share, for the quarter ended December 31,
1998. Cash flow provided by operations for the
fourth quarter totaled $48.1 million; however, this
includes the advance receipt of Medicare premiums of
approximately $68 million.

Revenues for the quarter ended December 31, 1998 were $1.13
billion, down 3.7% from the third quarter of 1998. For the
year ended December 31, 1998, revenues were $4.72 billion,
up 11.0% compared to the prior year.

Oxford's membership at January 1, 1999 was approximately
1,712,000, a reduction of 9% from December 31, 1998. This
membership reduction reflects the loss of 38,000 Medicare
members primarily relating to the withdrawal from
certain non-core counties and restructuring provider
arrangements and reduced benefits in other counties. It
also reflects the loss of an additional 98,000
Medicaid members as a result of the transfer of its
Brooklyn Medicaid business and the sale of its Pennsylvania
subsidiary, and the loss of 14,500 commercial
members in non-core markets.
   

PARAGON TRADE: P & G Settlement Hearing Reset
----------------------------------------------
A hearing on the motion of the debtor, Paragon Trade
Brands, Inc. to compromise and settle with Procter & Gamble
Company has been reset and will be held on March 22, 1999
at 10:00 AM, in courtroom 1204, United States Courthouse,
75 Spring Street, S.W., Atlanta, Georgia.


OKURA & CO: Seeking Extension To Assume/Reject Leases
-----------------------------------------------------
The debtor, Okura & Co. (America) Inc. seeks an extension
through and including June 30, 1999 of the time within
which it may elect to assume or reject its unexpired non-
residential real property leases.  The debtor leases office
space in New York and Chicago.  During the third week of
January 1999, the debtor determined that it could not
confirm a plan of reorganization that would have the
support of its creditors.  The Committee concurs that an
orderly liquidation of the debtor's assets would be in the
best interests of creditors and the estate.  The debtor has
begun discussions with the Committee on a wind-down budget.  
It is the debtor's intention to file a liquidating chapter
11 plan which will establish a liquidating trust for the
benefit of unsecured creditors.  The debtor will require
the office space to effectively conduct this wind down
process.


ONEITA INDUSTRIES: Seeks Time To Assume/Reject Leases
-----------------------------------------------------
The debtor, Oneita Industries, Inc., seeks entry of a court
order extending the time within which the debtor may assume
or reject certain of its unexpired leases of nonresidential
real property for approximately 90 days through and
including June 1, 1999.

The debtor requires additional time to determine whether to
assume or reject two unexpired leases of nonresidential
real estate.  The leases are the debtor's Lawrenceville,
Georgia distribution center, with an annual rental of
$966,000 and the debtor's sales office in New York, with an
annual rental of $95,000.

The debtor states that there is simply too much uncertainty
for the debtor to make a definitive decision to assume the
leases at this time, and it would be highly imprudent to
compel such a decision now.


PENN TRAFFIC: Announces Filing Financial Restructuring
------------------------------------------------------
The Penn Traffic Co. (OTC:PNFT) Monday announced that, as
planned, it has filed in the Bankruptcy Court for the
District of Delaware a petition for relief under Chapter 11
of  the Bankruptcy Code seeking to implement a
prenegotiated financial restructuring with the holders of
its senior and subordinated notes.

The filing also includes a proposed plan of reorganization
and related disclosure statement. This action follows Penn
Traffic's previously announced agreement in principle on
the terms of a financial restructuring with an  
informal committee of noteholders.

The restructuring will result in the substantial
deleveraging of the company by canceling its existing $1.13
billion of senior and subordinated notes and (i)  
distributing $100 million of new senior notes and
19,000,000 shares of new  common stock to the holders of
the existing senior notes and (ii) distributing  1,000,000
shares of new common stock and 6-year warrants to
purchase 1,000,000  shares of new common stock having an
exercise price of $18.30 per share to the  holders of the
existing senior subordinated notes. In addition, the  
restructuring provides that each 100 shares of Penn
Traffic's common stock outstanding immediately prior to the
restructuring shall be converted into 1 share of new common
stock for a total of approximately 110,000 shares of  
additional new common stock.

Penn Traffic will immediately seek Bankruptcy Court
permission to continue during the Chapter 11 case to
provide for payment in full of all obligations as they come
due to Penn Traffic's trade creditors that continue to
support Penn Traffic with customary credit and terms. Penn
Traffic also announced it has agreed to a $300 million
Debtor-in-Possession credit facility (DIP) with a bank  
group led by Fleet Capital Corp. as agent; the DIP
will have approximately $100  million in unused borrowing
capacity. This facility is also subject to approval  of the
Bankruptcy Court.

It is expected that the Delaware Bankruptcy Court will hold
hearings promptly to consider approval of the DIP and Penn
Traffic's motion to pay trade creditors.

"The noteholders are pleased that this next important step
has been taken and that the restructuring is progressing on
a rapid schedule," said Jeffrey Werbalowsky, senior
managing director, Houlihan, Lokey, Howard & Zukin Capital,
financial advisor to the informal committee. "The
bondholders are looking forward to participating in Penn
Traffic's future successes as both equity and debt
holders."


PHYSICIANS RESOURCE: Retires $7M Senior Bank Debt
--------------------------------------------------
The Wall Street Journal reports on March 2, 1999 that
Dallas-based Physicians Resource Group Inc. has announced
that the company has retired approximately $6.9 million in
senior bank debt, which had been held by Compass Bank,
a subsidiary of Compass Bancshares Inc., Birmingham,
Alabama. Compass Bank had bought the loan in January from
NationsBank, now BankAmerica Corp. The New York Stock
Exchange may de-list the physician-practice management
company.


READING CHINA: Seeks Order Establishing Bar Date
------------------------------------------------
The debtors, Reading China and Glass, Inc., RCGH, Inc.,
Calvert Importers & Distributors, Inc. and RCGTM, Inc. are
seeking entry of an order establishing April 26, 1999 at
4:00 PM as the last day by which all creditors of the
debtors must file a proof of cliam in the debtors' chapter
11 cases.


RINCON ISLAND: Baker Hughes Seeks To Terminate Exclusivity
-----------------------------------------------------------
Creditor Baker Hughes, Inc. joins the motion of the
Official Committee of Unsecured Creditors of Rincon Island
Limited Partnership to terminate the debtor's exclusive
periods.  Baker Hughes asserts that there have been certain
developments in the case that should result in the court
granting the committee's motion.  

Baker Hughes recites the failure of the debtor's management
to finalize a so-called "Proposal Agreement", there being
no consensual resolution in these cases, the debtor being
insolvent, the values attributed to the debtor's oil and
gas properties being dramatically overstated; and a loss of
confidence in the ability of the management to deal with
the assets in an effort to maximize value all provide
evidence that exclusivity should be terminated.  Baker
Hughes also points out that neither Rincon Island nor
Windsor are generating enough money to even pay current
administrative claims for professional fees.


ROYAL OAK MINES: Receives CCAA Protection
-----------------------------------------
ROYAL OAK MINES INC. (TSE AND AMEX: RYO) announced on
February 15, 1999 that it sought and obtained an Order from
the Ontario Court of Justice (General Division) under
the COMPANIES' CREDITORS ARRANGEMENT ACT.

The Order, which provides for an immediate injection of
working capital to finance operations during the stay
period, allows the Company to continue operating its mines,
including its Kemess South Mine in British Columbia, and
complete negotiations with senior lenders to restructure
its debt. The order applies to all of Royal Oak's wholly
and majority owned subsidiaries located in Canada.

"The additional working capital during the stay period will
allow Royal Oak to resume full production levels at Kemess
South," said Margaret Witte, Chairman, President and Chief
Executive Officer. "With full commercial production at
Kemess South, we will be able to replace present senior
debt with lower-cost, long-term, conventional mine
financing."

"The provisions of the CCAA Order allow for additional
financing to be provided to Royal Oak, which will create
the necessary conditions for the mine to achieve full
commercial production."

On December 23, 1998, Royal Oak announced that it would
seek to restructure its existing senior debt agreements to
achieve greater financial flexibility and a stronger
balance sheet in light of historically low commodity prices
for gold and copper. The Company established a deadline of
February 15, 1999 to reach an agreement among its senior
creditors.

The Order stays all legal proceedings against Royal Oak
until March 18, 1999 and authorizes the Company to prepare
a plan of compromise or arrangement for its outstanding
liabilities. The Company intends to prepare a restructuring
plan for submission to the Ontario Court within three
months, with court-sanctioned votes to follow.

Trilon Financial Corporation, which is owed US$120 million,
has agreed to provide Royal Oak with CDN$34.7 million.
Approximately CDN$11.0 million will be used to supplement
working capital to sustain the Company's mining
operations; $1.0 million will be used for administrative
and other related expenses; and $18.5 million will be used
to pay interest arrears, future interest and royalties to
Trilon. An amount of $8.4 million will be immediately
available to the Company during the initial stay period.

PricewaterhouseCoopers LLP has been appointed by the Court
to act as Monitor. In addition, an advisory committee has
been appointed by Royal Oak, and approved by the Court, to
assist and advise the Company and its present Board
of Directors during the stay period.  Joseph Wright, an
experienced investment banker, and Norman Ross, a senior
mining engineer and business executive, have been
appointed.  Other appointments will be announced at a later
date.

The Company has senior debt totaling approximately US$335
million and trade payables, taxes and accrued payroll of
approximately CDN$43.6 million.

The CCAA allows the Company to carry on business in the
normal course. Suppliers and creditors are required under
the court order to maintain existing contractual and
commercial arrangements with Royal Oak and will be paid
under normal terms for goods and services received after
today.

Royal Oak Mines is a major North American gold mining
company, which together with its predecessors, has produced
more than 50 million ounces of gold over a 60-year period.  
The Company owns and operates the Kemess South Mine in
north central British Columbia; the Giant Mine at
Yellowknife in the Northwest Territories; and the Pamour
and Nighthawk mines near Timmins in Ontario. In September
1997, Royal Oak closed its Hope Brook Mine in Newfoundland
after depletion of ore reserves, and in December 1997, the
Company closed its high-cost Colomac Mine in the Northwest
Territories for economic reasons. Both facilities have been
placed on care and maintenance.


THE J. PETERMAN: Order Approves Attorneys For Committee
-------------------------------------------------------
On February 23, 1999, the Honorable William S. Howard,
Chief U.S. Bankruptcy Judge for the Eastern District of
Kentucky, Lexington Division entered an order approving the
employment of Taft, Stettinius & Hollister LLP as attorneys
for the Official Committee of Unsecured Creditors of The J.
Peterman Company.


THE J.PETERMAN: Preliminary Order Approves KPMG
-----------------------------------------------
On February 17, 1999, the Honorable William S. Howard,
Bankruptcy Judge for the Eastern District of Kentucky,
Lexington Division entered an order authorizing the debtor,
The J. Peterman Company, to employ and appoint KPMG, LLP to
represent it in all accounting, auditing and tax services
arising within the Chapter 11 case, subject to certain
conditions being fulfilled.  The conditions include waiver
of the firm's pre-petition claim, and a separation of
professionals who have performed services for GE Capital,
its affiliates and subsidiaries.


WATKINS-JOHNSON: Looking for a Buyer
------------------------------------
According to a report in The Wall Street Journal on March
2, 1999, Watkins-Johnson Co. is looking to be acquired, in
whole or as a separate business, following an analysis by
CIBC Oppenheimer Corp.

The company, which manufactures semiconductor and wireless
materials, reported a $49.2 million loss, including a one-
time charge of $44.3 million, on revenue of $212.2 million
for fiscal 1998. Last fall, the company cut 20 percent of
its work force.  The company said that it is opposing any
attempts of an investor, Sandera Partners, Dallas, to elect
3 directors to the board.


WINDSOR ENERGY: Baker Hughes Seeks To Terminate Exclusivity
-----------------------------------------------------------
Creditor Baker Hughes, Inc. joins the motion of the
Official Committee of Unsecured Creditors of Windsor Energy
US Corporation to terminate the debtor's exclusive periods.  
Baker Hughes asserts that there have been certain
developments in the case that should result in the court
granting the committee's motion.  

Baker Hughes recites that the failure of the debtor's
management to finalize a so-called "Proposal Agreement",
there being no consensual resolution in these cases, the
debtor being insolvent, the values attributed to the
debtor's oil and gas properties being dramatically
overstated; and a loss of confidence in the ability of the
management to deal with the assets in an effort to maximize
value all provide evidence that exclusivity should be
terminated.  Baker Hughes also points out that neither
Rincon Island nor Windsor are generating enough money to
even pay current administrative claims for professional
fees.


WORLDCORP: Reorganization Plan Already Negotiated
-------------------------------------------------
The Richmond Times-Dispatch reports on February 8, 1999
that WorldCorp Inc., a Herndon-based holding company with
interests in World Airways Inc. and InteliData Technologies
Corp., filed for Chapter 11 bankruptcy  protection to shed
more than $75 million in debt in a speedy reorganization.  
The filing does not affect operations at either unit. World
Airways is a long-range carrier. InteliData is a computer
software and telecommunications company. The reorganization
plan is already negotiated, WorldCorp said, and it expects
to implement the plan in the second quarter.


                   *********

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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-
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