TCR_Public/990318.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, March 18, 1999, Vol. 3, No. 53

                   Headlines

CFI MORTGAGE: Files Chapter 11
COMMERCIAL FINANCIAL: Assetbacked Security Holders Reply
CORNUCOPIA RESOURCES: Announces Substantial Reorganization
EATON'S: Big Fourth Quarter Loss
FINE HOST: Objection to Equity Committee

GLOBALSTAR TELECOMMUNICATION: Annual Meeting Set For May 18
GOLDEN BOOKS: Seeks Approval of Bidding Procedures
HAYES: Public Auction Set For March 17, 18
HOMEPLACE STORES: Announce Merger With Waccamaw
JUMBOSPORTS: Order Grants Time on Leases

MCGINNIS PARTNERS: Plan of Reorganization
MEDPARTNERS: Discusses Sale of Assets to KPC Global Care
MOBILE ENERGY: Order Extends Time On Leases
PHAR-MOR: Announces Completion of Merger
PINNACLE BRANDS: Seeks To Terminate Retirement Plan

PONDEROSA FIBRES: Gets Nod For Disclosure Statement
SERVICE MERCHANDISE: Board Authorizes Bankruptcy
SMARTALK: Auction Nets Only Stalking Horse AT&T Bid
THE J. PETERMAN: Fifth Agreed Interim Order
WESTERN FIDELITY FUNDING: Hearing on Disclosure Statement

                  *********

CFI MORTGAGE: Files Chapter 11
------------------------------
The Palm Beach Post reports on March 16, 1999 that CFI
Mortgage Inc. has filed for Chapter 11 bankruptcy
reorganization. In a news release Monday, West Palm Beach-
based CFI Mortgage (OTC-BB: CFIM, 10 cents) said the filing
was necessary because values have dropped on sub-prime
mortgage loans, its principal business.


COMMERCIAL FINANCIAL: Assetbacked Security Holders Reply
--------------------------------------------------------
The Official Committee of Assetbacked Security Holders
("ABS") reply to the objections of the U.S. Trustee and the
Official Committee of Unsecured Creditors and the response
of Commercial Financial Services, Inc., debtor, to the
application of ABS to employ Gable & Gotwals as attorney.

The ABS provides lengthy documentation establishing the
firm's disinteredness.  The ABS holders state that they
have enormous claims arising out of the Servicing Agreement
with the debtor and arising out of the sale of the
securities themselves.  The right and ability of the ABS
holders to recover on these claims against the debtor and
third parties all impact the ultimate resolution of the
cliam against the state and the ultimate formulation of a
plan.

The ABS also responds to the objections of the U.S. Trustee
to employ Fried, Frank, Harris, Shriver & Jacobson as
attorney and Houlihan, Lokey, Howard & Zukin as financial
advisors.  The ABS argues that Fried Frank and Houlihan
Lokey meet the disinterestedness standard despite the
objection of the U.S. Trustee, and that prepetiion payment
to the firms were proper and do not disqualify the firms
from representing the ABS, and that the disclosures
concerning payments to the firms were sufficient and
appropriate.


CORNUCOPIA RESOURCES: Announces Substantial Reorganization
----------------------------------------------------------
On March 2, 1999, Cornucopia Resources Ltd. announced that
it has entered into arrangements with arm's length parties
which will result in a substantial reorganization of the
Company and its business.  The reorganization, which is
subject to requisite regulatory and shareholder approvals
at the Company's Annual General Meeting, scheduled for May
19, 1999, will involve the disposition of the Company's
interest in a mining property, a consolidation and name
change, the acquisition of Stockscape Technologies Ltd., a
privately-held Internet investment research provider; and a
change of the Company's name and composition of Board of
Directors.


EATON'S: Big Fourth Quarter Loss
--------------------------------
The teetering retail empire of Canadian department store
chain T. Eaton Co. suffered a another blow Tuesday  
when the company posted a larger-than-expected fourth-
quarter loss.

The 130-year-old firm blamed sagging Christmas revenues for
a loss of C$17.9 million, or C$0.73 a share, in the quarter
ended Jan. 30.  That's better than the loss of C$48.5
million, or C$6.03 a share, posted in the year-before
quarter but double what analysts were expecting.

The Toronto-based company reported a net loss for the year
of C$72 million compared with C$155.9 million the year
before, when it emerged from bankruptcy protection.

"Those are some tough numbers. It's worse than what people
were expecting,"  Dominion Bond Rating Service retail
analyst David Schroeder said of the  
quarterly net loss.

The 7.9 percent decline in sales at Eaton's 64 outlets
during the 12-week Christmas season was worse than feared.

Eaton shares fell C$0.09, or 4.2 percent, to C$2.06 in
moderate midday trade on the Toronto Stock Exchange
Tuesday.  After the retailer's initial public offering last
June, Eaton stock opened at C$15 a share and its market
capitalization was C$175 million.  Now its market
capitalization stands at C$48.36 million based on 23.48  
million common shares worth C$2.06 each.  Analysts,
investors and insurers had anxiously awaited the fourth-
quarter results and found nothing in them to assuage their
concerns.  The stock's value soared 30 percent on February
8 on rumors Macy's and Bloomingdale owner Federated
Department Stores Inc.  might make a bid for  
Eaton's.

But on the day Federated was expected to unveil a deal to
buy Eaton's, the U.S. company instead announced the
takeover of catalogue and Internet retailer Fingerhut Cos
Inc.  Sources said merger talks with Federated broke down
when one of the Eaton brothers insisted the stores retain
the name of the founding family, which holds 52 percent of
the company's stock. ($1=$1.53 Canadian)


FINE HOST: Objection to Equity Committee
----------------------------------------
The debtor, Fine Host Corporation, objects to the motion of
Kirkland Investors LLC seeking an order directing the
appointment of an official committee of equity security
holders.

The debtor points out that the United States Trustee
already has determined that the appointment of an equity
committee is neither warranted nor appropriate.  Moreover,
the debtor asserts that if Kirkland truly believes its
analysis that Fine Host has an equity value in excess of
$100 million, Kirkland will reap a huge windfall if it is
successful in its effort, based upon what it paid for its
shares.  The debtor states that the simple issue is whether
Fine Host is insolvent.  And the debtor alleges that its
financial analysis performed by BTAlex.Brown definitively
demonstrates insolvency and is based upon sound valuation
principles supported by real numbers.

The debtor finds no reason for an equity committee to be
appointed.  The debtor states that this is a simple case
with a very simple capital structure, and that appointment
of an equity committee would result in significant delay
and substantial unwarranted costs and expenses.


GLOBALSTAR TELECOMMUNICATION: Annual Meeting Set For May 18
-----------------------------------------------------------
The Annual Meeting of Shareholders of Globalstar
Telecommunications Limited will be held in the Grand Salon,
The Essex House, 160 Central Park South, New York, New York
10019, at 9:30 A.M., on Tuesday, May 18, 1999 for the
purpose of:

1. Electing to the Board nine directors whose terms have
expired;

2. Acting upon a proposal to increase the number of
authorized preference shares, par value $.01 per share, of
the Company (the "Preferred Stock")from 10,000,000 to
20,000,000;

3. Acting upon a proposal to amend the Company's 1994 Stock
Option Plan to increase the number of common shares, $1.00
par value, of the Company(the "Common Stock") available for
issuance from 2,500,000 to 5,000,000;

4. Acting upon a proposal to ratify the appointment of
Deloitte & Touche LLP as independent auditors for the year
ending December 31, 1999; and

5. Transacting any other business which may properly come
before the meeting.


GOLDEN BOOKS: Seeks Approval of Bidding Procedures
--------------------------------------------------
The debtors, Golden Books Family Entertainment, Inc. et al.
seek authority and approval of bidding procedures in
connection with the proposed sale of substantially all of
the debtors' assets related to their Adult Book Business to
St. Martin's Press, Incorporated. Any overbid shall be at
least the value of the consideration being offered,
approximately $11 million plus $750,000.  A hearing will be
held on March 25, 1999.


HAYES: Public Auction Set For March 17, 18
------------------------------------------
Assets of Hayes Microcomputer Products Inc., are set to go
on the auction block Wednesday, March 17 and 18, in the
company's ongoing spiral into bankruptcy liquidation.

The United States Bankruptcy Court appointed Emerald Asset
Management LLC to conduct a two-day public auction of the
Hayes' headquarters facilities in Norcross, Ga.

Emerald says the two-day auction event features: Automatic
Insertion, Manufacturing Equipment, Large Scale Testers,
Optical Inspection, Electronic Test and Measurement,
Personal Computers, Executive Office Furnishings, and  
Facility Equipment.

Emerald's Web site advertises the auction as "complete
liquidation" of "corporate headquarters, manufacturing,
research and development and warehouse facilities" plus
"over $24 million at cost inventory and parts offering."

Products listed up for auction range from Fuji CP-IV, CP-
III and CP-II Chip Shooters, to MPM Ultraprint Automatic
ScreenPrinters, to Electrovert Econpak Plus EPK+400/F and
Sensbey LGC-400FM wave solder machines, to Hewlett Packard  
3070 Series II In-Circuit board testers, to Cyberoptics
Laser Section microscopes, all the way down to hundreds of
PCs and notebooks. The auction is a "live" event only
at Hayes' Norcross, Ga., location; while more details are  
available from Emerald's Web site, interested parties
cannot make bids online.  Reported by Newsbytes News
Network, 03/16/99


HOMEPLACE STORES: Announce Merger With Waccamaw
-----------------------------------------------
HomePlace Stores Inc. and the Waccamaw Corp. plan  
to merge, creating one of the nation's largest home
furnishings retailers.

The merged company will have 120 stores in 27 states, with
annual sales of more than $600 million.

Under the terms of the agreement, expected to close by
June, a new corporation will be formed as "HomePlace of
America Inc." and the current HomePlace stores, Waccamaw
Stores and future new stores will operate under the  
"HomePlace" nameplate.

Waccamaw's president, Greg Johnson, will serve as president
and chief executive officer of the new entity, to be based
at Waccamaw's headquarters in Myrtle Beach, S.C.

HomePlace's existing corporate offices in suburban
Cleveland will be closed, resulting in about 180 layoffs.

HomePlace, which last year filed for Chapter 11 bankruptcy
protection, must secure court agreement for the merger, as
well as agreement from its unsecured creditors' committee
and the directors of both companies.

HomePlace, founded in 1994, operates 75 stores in 23
states. Waccamaw, founded in 1977, is a 45-store chain
operating in 11 states.

The combined company will form a national chain of 120
fashion home furnishings superstores in 27 states, offering
bed and bath, housewares and home decor items.


JUMBOSPORTS: Order Grants Time on Leases
----------------------------------------
The U.S. Bankruptcy Court for the Middle District of
Florida, Tampa Division, entered an order extending the
time to assume or reject unexpired leases of non-
residential real property until the entry of an order
confirming a plan  of reorganization. The court made a few
exceptions with respect to particular leases; the court
will make a separate order with respect to the lease in
Columbia, South Carolina, and with respect to the lease in
Boca Raton Florida and New Orleans, Louisiana.  The debtors
sought an extension of time to assume or reject more than
sixty leases of non-residential real property.


MCGINNIS PARTNERS: Plan of Reorganization
-----------------------------------------
The debtors, McGinnis Partners Focus Fund, LP and related
proceedings proposed a plan of reorganization and
Disclosure Statement.

The debtors are performance-oriented investment funds
formed for the purpose of achieving long-term capital
appreciation through investing in global markets.  The
debtors are comprised of two separate hedge funds.  Among
other things, the funds traded in Russian Bonds and
derivative contracts.  The debtors began experiencing
financial difficulties in August 1998 as a result of
upheavals in the international financial markets, and in
particular the financial crisis in the Russian Federation.   
The circumstances surrounding the termination of the
debtors' leveraged debt positions and seizure of the
various collateral of the debtors supporting those
positions, led to the collapse of the funds.  The plan as
proposed by the debtors essentially provides for the
consolidation of the debtors' assets and liabilities,
collection of accounts receivable owed to the debtors, and
the use of such funds to pay creditors on a pro rata basis.

Treatment of Classes of Claims and interests in the plan:

Class 1 - Secured Claims. Impaired. Estimated Recovery
percentage:100%

Class 2 - Priority Non-Tax Claims. Unimpaired. Estimated
Recovery Percentage: 100%

Class 3 - General Unsecured Claims Total Claims $5000
Impaired Estimated Recovery Percentage: 50%

Class 4 - Bank/Brokerage Claims Impaired Total Claims:
Focus: $60,850,709 Global:$31,044,789 Impaired Estimated
Recovery Percentage: Undetermined

Class 5 - Rescission Claims. Total Claims: Global:
$1,358,419 Impaired. Estimated Recovery Percentage:
Undetermined.

Class 6 - Investor Interests. Focus : $91,729,409
Global:$58,136,420 Impaired. Estimated Recovery Percentage:
undetermined.


MEDPARTNERS: Discusses Sale of Assets to KPC Global Care
--------------------------------------------------------
MedPartners Inc., Birmingham, Ala., has entered talks to
sell certain physician practices to KPC Global Care Inc., a
health management company in Riverside, Calif., according
to The Wall Street Journal. The companies have signed an
exclusive-negotiating agreement, but further details were
not available. Last week California regulators took over
MedPartners' health plan unit, MedPartners Provider
Network, and installed a conservator, which then filed
chapter 11 for the unit. Eugene Froelich, the conservator,
said any transactions would have to be reviewed
and that his interest is to protect the assets of
MedPartners Provider Network.(ABI 17-Mar-99)


MOBILE ENERGY: Order Extends Time On Leases
-------------------------------------------
The U.S. Bankruptcy Court for the Southern District of
Alabama entered an order extending the time within which
the debtors must assume or reject unexpired leases of
nonresidential real property to an including September 11,
1999.


PHAR-MOR: Announces Completion of Merger
----------------------------------------
On March 15, 1999, Phar-Mor, Inc. issued a press release
announcing, among other things, the completion of the
merger of its wholly owned subsidiary Pharmacy Acquisition
Corp. with and into Pharmhouse Corp. pursuant to the
Agreement and Plan of Merger dated as of December 17, 1998
among Phar-Mor, PAC and Pharmhouse.  The Merger was
completed on March 15, 1999.  

As a result of the Merger, Pharmhouse became a wholly owned
subsidiary of Phar-Mor.  In addition, subject to the terms
of the Merger Agreement, each share of the common stock of
Pharmhouse was converted into the right to receive $2.88 in
cash.  The total purchase price payable in connection with
the Merger is approximately $33.51 million, consisting of
$7.51 million in cash plus the assumption of approximately
$26.0 million in debt.

The purchase price and the other terms and conditions of
the Merger were negotiated over a period of approximately
two months between representatives of Phar-Mor and
Pharmhouse.  Jefferies & Co., Inc. acted as financial
adviser to Pharmhouse in connection with the Merger and
delivered a written opinion to the Board of Directors of
Pharmhouse to the effect that the purchase price was fair
from a financial point of view for the holders of
Pharmhouse's common stock.  At a special meeting of
Pharmhouse's stockholders held on March 4, 1999, the
stockholders of Pharmhouse voted upon and approved the
Merger.

Phar-Mor and PAC financed the payment of the purchase price
and all other fees and expenses associated with the Merger
through cash from operations and from borrowings under
Phar-Mor's revolving credit facility, the Amended and
Restated Loan and Security Agreement, dated as of September
10, 1998, among Phar-Mor and BankAmerica Business Credit,
Inc.

In connection with the Merger Agreement, certain
stockholders of Pharmhouse who collectively owned 740,715
shares of Phar-Mor's common stock entered into Voting and
Payment Agreements with Phar-Mor pursuant to which
they agreed, among other things, to vote their shares of
Pharmhouse common stock with respect to the Merger in
accordance with the recommendation of the Pharmhouse Board
of Directors.

Pharmhouse, which is based in East Brunswick, New Jersey,
operates 32 discount drug stores in eight mid-Atlantic and
New England states under the names "Pharmhouse" and "The Rx
Place" and has annual revenues of approximately $200
million.  Phar-Mor intends to continue to operate the
Pharmhouse and Rx Place stores under their current names,
and no store closings are currently expected as a result of
the acquisition.


PINNACLE BRANDS: Seeks To Terminate Retirement Plan
---------------------------------------------------
The debtors, Pinnacle Brands Inc. and affiliates seek an
order authorizing the debtors to terminate the Pinnacle
Brands, Inc. Retirement Plan.

Approximately 95 current and former employees of the
debtors currently have an account balance under the plan.  
AS of December 31, 1998, the plan held approximately $2.6
million.  In view of the imminent consummation of the
Optigraphics sale with Performance, and the fact that the
debtors will thereafter no longer have any business
operations and only a sufficient number of employees to
complete the wind-down of the debtors' affairs, the plan is
no loner a necessary or meaningful component of the
debtors' operations or bankruptcy estates.  As long as it
is in existence, the plan continues to incur expenses.

On March 2, 1999 the Board of Directors resolved to
terminate the plan and make the appropriate distributions
to the participants.


PONDEROSA FIBRES: Gets Nod For Disclosure Statement
---------------------------------------------------
Ponderosa Fibres Of Washington L.P.'s disclosure statement
related to its amended reorganization plan won court
approval after the partnership amended the document on the
eve of the hearing to include language suggested by Parsons
Main Inc. describing the pending litigation against the
builder of Ponderosa's unfinished paper de-inking facility
in Wallula, Wash. Ponderosa had filed a first amended plan
and related disclosure statement that altered the
treatment of Class 4 unsecured claims from impaired with no
distribution to unimpaired.  (The Daily Bankruptcy Review
and ABI Copyright c March 17, 1999)


SERVICE MERCHANDISE: Board Authorizes Bankruptcy
------------------------------------------------
Service Merchandise Co. Inc. said on Tuesday  
five of its vendors have filed an involuntary bankruptcy
petition asking a court to supervise the restructuring
efforts of the troubled jewelry and home products retailer.

Despite the involuntary Chapter 11 bankruptcy petition,
Service Merchandise said it will be permitted to operate
normally unless the court decides otherwise. It added that
the petition will not affect its subsidiaries and  
affiliates.

The company, the nation's largest catalog showroom
retailer, said it expects to pay for wages, severance, and
new product shipments from vendors without interruption.

"Our stores are open for business as usual," Chief
Executive Bettina Whyte said. "We intend to operate our
businesses vigorously and to meet our customers' needs."
Service Merchandise, which has been trying to reorganize
its operations, said the five vendors that filed the
petition were not part of an "unofficial" vendors committee
formed at the company's request.

Citicorp U.S.A., a division of Citigroup Inc., the agent
for the company's revolving credit facility, is preparing a
waiver that would allow Service Merchandise to borrow
regardless of the involuntary filing.

The company said it has over $50 million in undrawn
revolving credit through Citicorp and planned a voluntary
filing after completing negotiations for DIP financing,
expected to be completed in late March.  When the waiver
from Citicorp is in place, Service Merchandise said, it
expects to have enough funding to meet obligations while
the DIP financing is finalized.

Service Merchandise said its board on Monday authorized the
commencement of bankruptcy proceedings as soon as possible
to maximize the company's value and to fend off possible
litigation related to an involuntary filing.

In January, the company secured a 30-month, $750 million
credit facility from Citibank and BankBoston, which
replaced its previous bank facility.

Service Merchandise stock did not trade on Tuesday morning.
A spokeswoman at the New York Stock Exchange said Service
Merchandise's stock was delayed at the opening for news
dissemination.

Last week, Service Merchandise announced it would lay off
about 150 people at its corporate headquarter staff and
close its Dallas distribution center, cutting 120 jobs
there, or 1.5 percent of its total work force. The latest
cuts came on top of a restructuring plan announced Feb. 9
in which the company said it would close up to 134
underperforming stores, or 40 percent of its total  
operations, within the next three months.

Service Merchandise employs 25,000 people nationwide.


SMARTALK: Auction Nets Only Stalking Horse AT&T Bid
---------------------------------------------------
Stalking horse bidder AT&T Corp. [T] was the only bidder at
last week's auction of SmarTalk Teleservices Inc.'s assets.
As widely reported, AT&T Corp. announced a definitive
agreement on Jan. 19 to purchase the prepaid calling card
provider's assets for up to $192.5 million in cash,
subject to substantial downward closing adjustments that
may reduce the deal by as much as $45 million. The sale and
corresponding bidding procedures, which required bidders to
make a $10 million deposit to qualify for the auction and
that all bids be 80 percent cash, drew numerous objections
from the committee, the U.S. Trustee, and indenture trustee
Wilmington Trust Co. A sale hearing is scheduled for today.
(The Daily Bankruptcy Review Copyright c March 17, 1999)


THE J. PETERMAN: Fifth Agreed Interim Order
-------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of
Kentucky, Lexington Division entered a fifth agreed interim
order authorizing the debtor, The J. Peterman Company to
incur post-petition secured indebtedness. The lender has
agreed subject to the terms of the order to loan to the DIP
up to a gross amount of $3.939 million during the interim
financing period.  The final hearing on the motion is
continued to April 1, 1999 at 10:00 AM.


WESTERN FIDELITY FUNDING: Hearing on Disclosure Statement
---------------------------------------------------------
The debtor, Western Fidelity Funding Inc. filed a Third
Amended Plan of Reorganization on March 9, 1999.  A hearing
will be conducted before the court to consider the adequacy
of the statement on April 19, 1999 at 9:00 AM.

                  *********

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