TCR_Public/990402.MBX T R O U B L E D   C O M P A N Y   R E P O R T E R
     Friday, April 2, 1999, Vol. 3, No. 64


AHERF: Creditors to Receive Less Than Expected
AMERICAN RESOURCES: Announces Year-End Results
FAVORITE BRANDS: Case Summary & 20 Largest Creditors
HOMEPLACE: Files Reorganization Plan
INTERNATIONAL WIRELESS: Plan Confirmed Over Objections

IRIDIUM: Stock Prices Fall Due to Investors' Concerns
KCS ENERGY: Reports Fourth Quarter and Full-Year Results
KENNY ROGERS: Nathan's Completes Acquisition
KIWI: Court Orders Federal Trustee To Take Helm
LOEWEN: May Seek Bankruptcy Protection

MED-CHEM: CML Agrees to Acquire Laboratory Assets
MEDPARTNERS: Not in Default of Indentures
MJ DESIGNS: Michaels Announces Acquisition of 16 Stores
MOBILEMEDIA: TSR Wireless Makes Proposal
ORANGE COUNTY: Court Allows Suit Against Merrill Lynch

PARAGON TRADE: Notification of Late Filing
REFAC TECHNOLOGY: Annual Meeting of Shareholders
ROYAL OAK: Court Gives Two-Week Reprieve
SMARTALK: AT&T buys Smartalk                               
SOFTECH: Announces Q3 Fiscal 1999 Results

THE PENN TRAFFIC COMPANY: Releases Fourth Quarter Results
WILSHIRE: Announces Fourth Quarter and Year-End Results
ZENITH: Reports $275 Million Loss in 1998


AHERF: Creditors to Receive Less Than Expected
Creditors in the Allegheny Health Education and Research
Foundation (AHERF) bankruptcy will receive less than anyone
had expected from the sale of eight Philadelphia hospitals,
The Pittsburgh Post Gazette reported. An attorney
representing AHERF's trustee said at a hearing
yesterday that net proceeds amount to about $44.4 million,
compared to the selling price of $345 million. At one time,
attorneys for creditors had estimated that the net proceeds
might be as high as $100 million, but the trustee's
attorney said various expenses diminished the proceeds.
The largest single expense was $50 million that creditors
turned over to Drexel University so that it would manage
the Philadelphia medical schools that were part of the
AHERF bankruptcy. Creditors are still expected to get money
other than that from the hospital sales proceeds. (ABI 01-

AMERICAN RESOURCES: Announces Year-End Results
American Resources Offshore, Inc. (ARO) (Nasdaq:GASS)
announced results of operations for its fiscal year ended
December 31, 1998. Financial highlights were as follows:

ARO-owned production revenues increased 37% to $26.7
million as compared with $19.5 million for 1997. The
increase was primarily attributable to wells acquired and
drilled on acreage acquired from TECO Oil & Gas, Inc.
("TECO") during 1998. Gross revenues for 1998 decreased 5%
to $36.1 million from the $38 million reported for 1997.

Operating loss for the year was ($41.2 million) after
having been ($322,000) for 1997; and net loss for 1998 was
($46.2 million) as compared with ($1.85 million) for 1997.

As of December 31, 1998, ARO had current liabilities in
excess of current assets (excluding the current portion of
long-term debt) of approximately $6.3 million, was not in
compliance with its primary credit facility and bridge  
loans with DNB Energy Assets, Inc., of approximately $48
million and $15.7  million, respectively, and was in
default under its $18.5 million loan with TECO. This
situation is primarily the result of:  i) the lack of
available  outside funding to complete the scheduled
refinancing of the interim loans and capital expenditures  
associated with the acquisition and development of
properties from TECO; ii)  the marked decline in oil and
gas prices; iii) the more than 60% decline in ARO's two
largest producing wells; and iv)  trade payables incurred
in association with the capital requirements for the
development of additional wells.

ARO's management has taken steps in an attempt to remedy
its deficiencies, including, but not limited to, the
reduction of administrative expenses and settlement of
trade creditors for amounts less than face value; and ARO's
officers and directors are diligently pursuing additional
measures, including the sale of its Appalachian properties
and alternatives for debt restructuring.

FAVORITE BRANDS: Case Summary & 20 Largest Creditors
Debtor:  Favorite Brands International Holding Corp.
         2121 Waukegon Road
         Bannockburn, IL 60015

Type of business: Confections Company.

Court: District of Delaware

Case No.: 99-726    Filed: 03/30/99    Chapter: 11

Debtor's Counsel:  

David S. Kurtz
Skadden, Arps, Slate, Meagher & Flom
333 W. Wacker Dr.
Suite 2100
Chicago, Il 60606

Gregg M. Galardi                  
Skadden, Arps, Slate, Meagher & Flom                  
One Rodney Square
Wilmington, Delaware 19801                  

Total Assets:            $805,000,000
Total Liabilities:       $699,000,000

No. of shares of common stock         1,000  

20 Largest Unsecured Creditors:

   Name                              Nature         Amount
   ----                              ------         ------
Oaktree                         Senior Note      35,000,000
Chase Securities      Sr. Subordinated Note      31,500,000
Alliance Capital Management     Senior Note      29,500,000
Capital Research                Senior Note      21,000,000
NY Life Insurance Co.  Sr Subordinated Note      20,000,000
Northwestern Mutual Life        Senior Note      15,000,000
Northwestern Mutual
Life Ins. Co.         Sr. Subordinated Note     15,000,000
Prudential Mutual Funds            Sr. Note     12,500,000
Oppenheimer Funds, Inc.            Sr. Note     12,000,000
Metropolitan Life Private
Placement Unit        Sr. Subordinated Note     12,000,000
Equitable Life Assurance
Society of the U.S.            Sr. Sub Note     12,000,000
Southwest Securities
Partners LP            Sr Subordinated Note     10,500,000
Oak Hill Securities
Fund LP                Sr Subordinated Note     10,000,000
Delaware Investments                Sr Note     10,000,000
Great American Life
Insurance Co.       Senior Subordinated Note    10,000,000
CIGNA                            Senior Note     8,000,000
TCW Leveraged Income
Trust LP Senior            Subordinated Note    7,500,000
Eaton Vance Management           Senior Note    7,000,000
Merrill Lynch Assset Management  Senior Note    7,000,000
Teachers Insurance
Annuity Association              Senior Note    7,000,000

HOMEPLACE: Files Reorganization Plan
HomePlace Stores, Inc. announced that it filed its Joint
Plan of Reorganization and Disclosure Statement with the  
Bankruptcy Court today, representing a key step toward its
successful emergence from Chapter 11.  The hearing on the
adequacy of the Company's disclosure statement has been set
for April 28, 1999.

On March 17, 1999, HomePlace and Waccamaw Corporation
announced an agreement under which the two chains will
merge under the HomePlace. The merger agreement, which is
supported by HomePlace's unsecured creditors' committee
and the boards of directors of both companies, is subject
to the approval of the Bankruptcy Court and will be
submitted to a vote of HomePlace's creditors and  equity
holders.  Upon approval of the Plan by the Court, the
merger is expected to be completed by early June.

"Since filing to reorganize under Chapter 11 in January
1998, the Company has dramatically increased merchandise
productivity, increased operating efficiencies and
significantly reduced overhead, all while generating  
substantial increases in EBITDAR (earnings before interest,
taxes, depreciation, amortization and restructuring)," Mr.
Pollock said."

The Plan filed with the Court is premised upon the merger
of Waccamaw and HomePlace, and the conversion of the
existing prepetition unsecured claims against HomePlace
into common stock of the new combined post-merger company.  
Under the terms of the Plan, Waccamaw's shareholder will
initially receive 40 percent of the new common stock in the
combined company.  The Plan also provides a liquidity
feature for holders of unsecured claims who elect to  
receive a cash distribution equal to 50 percent of their
unsecured claims in lieu of their share of new common stock
in the combined company, the liquidity for which is being
provided by the additional purchase by Waccamaw's  
shareholder of 16.2 percent of the new common stock
outstanding on the effective date for $25 million.

As a result of the merger and the additional purchase of
new common stock, Waccamaw's shareholder will own 56.2
percent of the stock of the combined company, with the
balance of the new common stock remaining with the
HomePlace estates.

INTERNATIONAL WIRELESS: Plan Confirmed Over Objections
International Wireless Communications Inc.'s second amended
joint plan of reorganization has been confirmed by the
court, overcoming objections filed by the informal
committee of minority shareholders and other minority
shareholders, the Loeb Partners. The court ruled that the
plan was confirmable despite the objections, which included
charges that the plan involved a sale of assets at
substantially less than their value and improperly released
Vanguard Cellular Systems Inc. (VCELA) from liability.
(The Daily Bankruptcy Review and ABI Copyright c April 1,

IRIDIUM: Stock Prices Fall Due to Investors' Concerns
The Arizona Republic reports on March 31, 1999 that shares
of Iridium LLC, which runs the first global satellite
telephone network, fell as much as 19 percent Tuesday on
investor concern that sales will  miss forecasts and that
the company could default on its bank debt.

Washington-based Iridium fell 33/16, to 16 3/4 after
slipping to an all-time low of 16 1/8 earlier in the day.
The stock has fallen 74 percent in the past year, and its
bonds have lost about half their value.

The company, backed by a group led by Motorola Inc., went
public at $20 in June 1997 and more than tripled within a
year, boosted by the promise of offering phone service
anywhere. Now, Iridium is plagued by problems: Its  
phones are in short supply, and it lacks a trained sales

On Monday, Chief Financial Officer Roy Grant quit and
Iridium's banks gave it 60 days to meet sale goals or risk
a default on an $800 million credit line.

Iridium's phones may be hard to sell even with a strong
sales force. The brick-sized objects cost about $3,000,
almost 10 times as much as standard cellular phones the
size of a cigarette pack. The charges also are high, at $3  
to $7 a minute.

Iridium also is likely to run into strong competition.
Globalstar is building a $3.3 billion system with the
backing of Loral Space & Communications Ltd., which is
expected to be running by September. The phone will cost
$800 to  $1,100 to buy, and 65 cents to $1.50 a minute to

Also, London-based ICO Global Communications Ltd. is
working on a $4.6 billion system scheduled to begin service
in August 2000. The phone will cost $700 and the per-minute
charges run from 50 cents to $3 a minute. Both Globalstar
and ICO will offer phones that are smaller than Iridium's.

KCS ENERGY: Reports Fourth Quarter and Full-Year Results
KCS Energy, Inc. (NYSE: KCS) announced financial and
operating results for the fourth quarter and year ended  
December 31, 1998 Commenting on the Company's performance
during the year, KCS Energy President and Chief Executive
Officer James W. Christmas said, "Although total oil and
gas production during 1998 increased 11% to 60.5 billion
cubic  feet equivalent (Bcfe) compared to 54.6 Bcfe in
1997, the combination of very  low prevailing prices for
natural gas and crude oil and disappointing  performance in
the Rocky Mountain Region resulted in KCS incurring
significant  losses." Net loss for the year ended December
31, 1998 was $296.5 million, or  $10.08 per share, compared
to a loss of $92.1 million, or $3.19 per share, in 1997.
Ceiling test writedowns in 1998 were $268.5 million pretax
($174.5  million after tax) compared to $165.1 million
pretax ($107.3 million after tax)  in 1997.  

Earnings before interest, income taxes, depreciation,
depletion and amortization (EBITDA) and  cash flow from
operations decreased to $83.7 million and $53.1 million,  
respectively, as significantly lower average realized
commodity prices and  higher interest costs more than
offset the benefits of the 11% increase in  production.

As a result of the non-cash writedowns, the Company had
negative stockholders' equity of $154.2 million as of
December 31, 1998, and has violated certain  covenants in
its revolving credit agreements.  While the default
continues, the Company cannot borrow under the credit
facilities.  The lenders have not declared the principal
balance due and payable, but have the right to do so at  
any time.  The Company has requested a waiver of the
defaults from the banks.   However, there can be no
assurance that a waiver will be granted or for what period
of time.  As a result, the Company's independent auditors
have issued a  modified report indicating there is
substantial doubt with respect to the Company's ability to
continue as a going concern.  

KENNY ROGERS: Nathan's Completes Acquisition
Nathan's Famous Inc. has completed the acquisition of all
of Roasters Corp. and Roasters Franchise Corp.'s
intellectual property rights, including trademarks, recipes
and franchise agreements. As a result, the "Kenny Rogers
Roasters" franchise system emerged from bankruptcy.

Nathan's says it purchased the assets for $1.25 million
according to the terms of a Plan of Reorganization which
was approved during the Roasters Corp. proceedings in the
U.S. Bankruptcy Court. Nathan's will own, operate
and  intends to further develop Kenny Rogers Roasters in
the U.S. and internationally under the management of NF
Roasters Corp., a wholly-owned subsidiary of Nathan's

KIWI: Court Orders Federal Trustee To Take Helm
A bankruptcy judge on Thursday ordered a federal
trustee  to take the helm of grounded Kiwi International
Air Lines to assess if the tiny carrier should be
liquidated or allowed to fight to fly again.

Kiwi, awash in debt and without planes to fly or permission
to fly passengers, consented, telling U.S. Bankruptcy Judge
Rosemary Gambardella its efforts to reverse last month's
emergency revocation of its license to fly have failed.

Gambardella said the trustee must examine if it is
worthwhile to keep the company alive until mid-April, when
Kiwi can appeal the revocation by the Federal Aviation
Administration to the National Transportation Safety Board.

Some 500 workers could lose their jobs if the trustee, who
was not immediately named, persuades the judge to pull the
plug before the hearing. They represent less than half the
1,200-person workforce which owned a controlling share of
Kiwi at its peak in the mid-'90s, when the Newark-based  
airline had 15 leased jets. The employees lost their
ownership stake when a Baltimore surgeon rescued  
Kiwi from its first bankruptcy in July 1997, but the
airline continued on a  downward spiral, shedding workers,
routes and planes.

The FAA on March 24 stunned Kiwi by immediately revoking
the license to fly, asserting the carrier was unable to fly
its six-city schedule safely. The action came a day after
the U.S. Department of Transportation threatened
to revoke Kiwi's certificate in two weeks, charging that
the airline did not have adequate managers or financing.

That day, Kiwi filed for bankruptcy protection, offering a
rescue plan based  on a $3 million sale to Pan Am Airways.
But shortly after Kiwi lost its flight certificate, Pan Am
quit the deal.

LOEWEN: May Seek Bankruptcy Protection
Loewen Group Inc., Burnaby, British Columbia, is
considering seeking bankruptcy protection in
Canada or the United States, after reporting a record
quarterly loss of $606.8 million for the fourth quarter and
an announcement that its standing as a going concern is
questionable, The Wall Street Journal reported. The funeral
services concern also said it took a $302 million loss
on its recent $193 million sale of certain U.S. funeral
homes and cemeteries. The company is cutting its 14-person
board of directors in half to streamline the decision-
making process. Prior to the announcement, Standard &
Poor's lowered the company's credit rating on about $1.8
billion of the company's debt, citing concerns about
liquidity, poor operating performance and limited progress
in selling its assets. (ABI 01-Apr-99)

MED-CHEM: CML Agrees to Acquire Laboratory Assets
The Canada Newswire reports on March 31, 1999 that Canadian
Medical Laboratories Limited (TSE:CLC), a leading edge
healthcare company, announced that through a recently
incorporated, wholly-owned subsidiary it has agreed to
purchase from PricewaterhouseCoopers Inc. substantially all
of the laboratory assets of Med-Chem Health Care Limited
and its subsidiary and related companies for a purchase
price of approximately $105,000,000. CML will finance the
total purchase price through a banking syndicate led by
Canadian Imperial Bank of Commerce which has provided a  
committed offer to finance.

The agreement to purchase the laboratory assets of Med-Chem
is subject to court approval and regulatory approvals,
including the Ministry of Health. Subject to the
satisfaction of these conditions, the transaction is
scheduled to close on April 15, 1999.

CML expects that the acquisition of the Med-Chem assets
would immediately add over $80 million to CML's annual
revenue elevating CML to a one-third share of the Ontario  
laboratory testing market with consolidated revenues in
excess of $150 million.

The purchased assets include all of the licenses held by
Med-Chem under the Laboratory and Specimen Collection
Centre Licensing Act, all of the specimen collection
centres and ECG clinics leased or occupied by Med-Chem
(other than those excluded by the Purchaser at its option),
subject to and including its "Corporate Cap" ($69,865,000
in 1997 - 1998). Specifically excluded from the purchase is
the main laboratory of Med-Chem located at 8150 Sheppard
Avenue East, Toronto.

PricewaterhouseCoopers Inc. was appointed by the Ontario
Court (General Division) as receiver of Med-Chem on
February 1, 1999, and at the same time was appointed
trustee in bankruptcy of Med-Chem Health Care Limited.

MEDPARTNERS: Not in Default of Indentures
According to a PR Newswire report on March 31, 1999,
MedPartners, Inc. (NYSE: MDM) responded to a report aired
on CNBC about the Company.

After consulting with its legal advisors, it is
MedPartners' position that the Company is not in default of
indentures pertaining to the Company's 7-3/8  
percent Senior Notes due 2006, its 6-7/8 percent Senior
Subordinated Notes due 2000, or its Threshold Appreciation
Price Securities ("TAPS") as a result of the bankruptcy
filing by the conservator appointed by the California
Department of Corporations of one of the Company's
subsidiaries, MedPartners Provider Network, Inc. ("the

MedPartners further stated that it has taken the position
that the actions taken by the Department of Corporations
are unwarranted and has brought suit in both the US
Bankruptcy Court and the California State Superior
Court challenging the Department's actions.  MedPartners
believes that it is inappropriate for anyone to make
assumptions regarding any impact of the Department's
actions when litigation challenging the validity of such
actions has not yet been resolved.

Mac Crawford, Chairman and CEO of MedPartners, said:  "We
are optimistic that we will be able to resolve our dispute
with the Department of Corporations in a manner that will
allow MedPartners to continue the orderly transition of its  
California PPM operations."  

MJ DESIGNS: Michaels Announces Acquisition of 16 Stores
Michaels Stores, Inc. (Nasdaq: MIKE) announced that its bid
to acquire 16 leases for stores operated by MJDesigns,  
Inc., currently in Chapter 11 proceedings, was approved by
the bankruptcy court on March 30, 1999.  The Company closed
on the acquisition today.

Michael Rouleau, President and Chief Executive Officer,
said, "We are very excited about this opportunity.  These
stores are predominantly located in Maryland and Virginia.  
This acquisition will quickly make us the dominant arts
and crafts retailer in the area, including the very
important Baltimore/Washington D.C. market.  In one
transaction we have attained what could have taken years to

Rouleau added, "We expect that these stores will re-open as
Michaels stores this summer, and that at least some of them
will be in addition to our current plan of sixty-two new
Michaels stores.  We anticipate that the incremental  
expense associated with opening these stores will have a
slightly negative impact on this year's earnings."

Michaels owns and operates 511 Michaels stores in 47
states, Canada, and Puerto Rico, and 79 Aaron Brothers
stores, located primarily on the West Coast.

MOBILEMEDIA: TSR Wireless Makes Proposal
TSR Wireless LLC confirmed that, at the invitation of
certain creditors in the MobileMedia Corporation bankruptcy
proceedings, it has submitted a proposal to acquire  

TSR's proposal would combine TSR and MobileMedia, each a
national paging carrier, into a new corporation owned by
the current owners of TSR, including TSR's management,
affiliates of TA Associates, Inc., Spectrum Equity
Investors, and Telephone & Data Systems, Inc., and by
unsecured creditors of MobileMedia.

TSR is being advised in the transaction by Jefferies &
Company, Inc. TSR has received favorable indications from
Banc One Capital Markets, Inc. (formerly known as First
Chicago Capital Markets, Inc.) and The First National Bank
of Chicago, a BANK ONE company, with respect to a senior
bank financing and from nationally recognized investment
banking firms with respect to the senior and subordinated
debt financings in connection with the proposed

TSR's proposal has been submitted pursuant to
bankruptcy proceedings authorizing the submission of an
alternative to the current plan. TSR's proposal is
contingent upon, among other things, satisfactory
completion of due diligence, receipt of its financing
commitments, approvals of governmental authorities,
acceptance by creditors of MobileMedia, and approval of the
Bankruptcy Court.

TSR Wireless LLC ("TSR Wireless"), founded in 1974, is a
privately owned paging company. The company has about 250
retail locations nationwide under the TSR Wireless name.

ORANGE COUNTY: Court Allows Suit Against Merrill Lynch
The state Supreme Court on Wednesday allowed 14
public  agencies in an Orange County investment pool to sue
Merrill Lynch & Co., the  brokerage they accuse of helping
to bankrupt the county in 1994.

The court unanimously denied review of a lower-court ruling
reinstating the  suit by government agencies from around
the state who turned down the county's  offer to share in
its settlement. The suit seeks nearly $80 million in
damages, interest and legal fees.

The suit accuses Merrill Lynch, the nation's largest
brokerage, of taking part in former Orange County Treasurer
Robert Citron's violations of his duties to taxpayers and

Citron's failed bets on interest rates led to $1.64 billion
in losses for the county's investment pool, a savings bank
for schools, cities and water and sewer districts. The
losses forced the county to seek federal bankruptcy  
protection in December 1994. Citron pleaded guilty to
falsifying records and violating state securities  
laws and served eight months in a prison work-release

Merrill Lynch agreed last year to pay the county $437.1
million to settle a suit accusing the firm of giving bad
advice that contributed to the financial collapse. The
company later agreed to pay $2 million to settle Securities
and Exchange Commission accusations that it was negligent
in warning investors about the risk of buying the county
bonds it underwrote.

The county and nearly 200 members of the investment pool
who agreed to take part in its suit have shared $781
million in settlements so far, including the money from
Merrill Lynch.

The agencies that declined were paid $24.5 million for
dropping their suit against the county. Their suit against
Merrill Lynch was dismissed in 1997 by Contra Costa County
Superior Court Judge Walter Rogers, who ruled that only
the  county could sue on behalf of pool members.

The 1st District Court of Appeal disagreed last December,
ruling that pool members could try to prove the broker
violated an independent legal duty to them. The agencies
say Merrill Lynch fraudulently induced them to invest
about  $200 million.

In seeking state Supreme Court review, Ronald L. Olson, a
lawyer for Merrill Lynch, said the appellate ruling
allowing a separate suit by members of a trust fund would
open the door to multiple suits in the same case, with
potentially conflicting results.

PARAGON TRADE: Notification of Late Filing
Paragon Trade Brands Inc. notified the SEC of a late filing
of its form 10K. Due to the conversion of its operating and
accounting systems beginning in November 1998, the closing
of the company's books for the fiscal year ended
December 27, 1998 has been delayed, which has resulted in
the company's inability to complete its  financial  
statements in time to file the Report on Form 10-K on March
29, 1999.

REFAC TECHNOLOGY: Annual Meeting of Shareholders
annual meeting of Stockholders will be held at the Board of
Governors' Room of the American Stock Exchange, 86
Trinity Place, New York, New York, on Monday, May 10, 1999,
at 10:00 A.M., New York City time, for the following

1. To elect directors of the Corporation;

2. To approve an amendment to the Restated and Amended
Certificate of Incorporation to change the Corporation's
name to "REFAC."

ROYAL OAK: Court Gives Two-Week Reprieve
An Ontario Court judge Thursday granted Royal Oak
Mines Inc. two weeks to come up with a restructuring plan
that satisfies the court and its creditors.

Kirkland, Washington-based gold mining company Royal Oak
has teetered on the edge of bankruptcy for the past several
months as low gold prices, cost overruns at its rich Kemess
mine in British Columbia and debt exceeding $320  
million dragged down its cash flow.

The court has given Royal Oak several extensions since it
first granted the company protection from creditors on Feb.
15. But Judge James Farley made it clear Thursday that this
was Royal Oak's last chance to come up with
an  acceptable plan and that if it is not successful it
will be put into receivership.

The Toronto Stock Exchange said Thursday it would remove
Royal Oak from its benchmark TSE 300 Composite Index on
April 16 because it is too thinly traded. That's the same
date the company must return to court.

Royal Oak will continue to trade on the TSE but the
demotion from the TSE 300 Composite is another blow
following its delisting from New York's American  
Stock Exchange two months ago.  Royal Oak shares closed
down C$0.02 at C$0.12 in high volume on Thursday after
touching a 52-week low of C$0.09. It's highest level was
set December 5, 1996, at C$5.25.

Royal Oak owes C$185 million to Trilon Financial Corp., its
major backer. Trilon's motion to push the company into
immediate receivership Thursday was dismissed by the court.
($1=$1.50 Canadian)

Royal Oak Mines Inc. has received notice from James H.
Wood, Chief Financial Officer, of his resignation for
personal reasons.  Mr. Wood will terminate his
employment with the Company on May 15, 1999.

SMARTALK: AT&T buys Smartalk                               
AT&T says it has completed the bankruptcy-court approved
purchase of substantially all of the assets of SmarTalk
TeleServices, Inc. for approximately $145 million.

AT&T says that nearly all of SmarTalk's approximately 170
employees will be offered employment.

SmarTalk, a leading provider of prepaid cards and prepaid
wireless services, has distribution agreements with the
U.S. Postal Service and leading mass merchandisers, as well
as retailers and supermarkets.

Separately, AT&T also announced it has completed the sale
of its Language Line Services over-the-phone interpretation
business to an affiliate of Providence Equity Partners Inc.

SOFTECH: Announces Q3 Fiscal 1999 Results
SofTech, Inc.  (Nasdaq:SOFT) announced results for the
third quarter ended February 28, 1999. Revenue was
approximately $8.9 million as compared to $5.2 million for  
the same period in fiscal 1998, an increase of about 71%.
Operating income for the third quarter of fiscal 1999 was
$921,000 as compared to $384,000 for the same period in
fiscal 1998, an increase of 140%. Net income for the third  
quarter of fiscal 1999 was $550,000, or $.07 per share. Net
income for the third quarter of fiscal 1998 was $373,000,
or $.06 per share.  EBITDA (earnings before interest,
taxes, depreciation and amortization) for the current
quarter was approximately $1,795,000 as compared to
$768,000 for the same period in fiscal 1998.

EBITDA for the nine months ended February 28,  1999 was
$2,357,000 as compared to $1,997,000 for the same period in
fiscal  1998.  "I am happy to report a solid quarter of
performance following the problems we experienced in Q2,"
said Mark Sweetland, President and CEO of SofTech.

The Company's Credit Agreement with its Bank included a
financial covenant  that required EBIT (earnings before
interest and taxes) of $1, 250,000 for the  current
quarter. The actual performance for the quarter was
approximately  $300,000 lower than required and therefore
the Company is in default on its Credit Agreement. SofTech
has made all principal and interest payments on this debt
on a timely basis and expects to continue to do so. The
Company is in discussions with the Bank to negotiate a
standstill agreement while this debt is refinanced. In that
regard, the Company signed a proposal from an alternative
lending source and is working to replace its current
lender. The Company is optimistic that this new banking
relationship can be in place prior to the end of its fiscal
year (May 31).

THE PENN TRAFFIC COMPANY: Releases Fourth Quarter Results
The Penn Traffic Company (OTC:PNFT) announced that revenues
for the fourth quarter ended January 30, 1999 were
approximately $690.5 million compared to $750.6 million a
year ago, a decrease of 8.0 percent. Revenues for the 52-
week period ended January 30, 1999 were approximately
$2.828 billion, a decrease of 6.0 percent from the 52-week
period ended January 31, 1998. Same store sales decreased
3.8 percent in the fourth quarter.

Cash flow (EBITDA) for the fourth quarter was $25.2
million, compared to $42.5 million in the prior year, a
decrease of 40.8 percent. EBITDA for the 52-week  
period ended January 30, 1999 ("Fiscal 1999") was $99.5
million compared to $165.3 million in the prior year, a
decrease of 39.8 percent.

The Company reported a net loss for the fourth quarter
(before consideration of the unusual items described below)
of $22.4 million, or $2.11 per share, compared to a net
loss of $11.2 million or $1.06 per share in the prior year.  
Net loss for the 52-week period ended January 30, 1999
(before consideration of unusual items) was approximately
$103.9 million or $9.83 per share, compared to a net loss
of $48.8 million or $4.61 per share in the prior year.

The company is seeking to implement a pre-negotiated
financial restructuring with the holders of its senior and  
subordinated notes. 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 the  Company's existing
common stock outstanding immediately prior to the  
restructuring will be converted into one share of new
common stock for a total of approximately 110,000 shares of
additional new common stock.

The Company expects that its store rationalization program
will lead to the sale of approximately 18 stores in Ohio
and eastern Pennsylvania  (17 of which have been sold to
date) and the closing of an additional 38 unprofitable
stores (30 of which have been closed to date). The Company
estimates that the sale of these 18 stores will ultimately
generate net proceeds of approximately $40 million.

WILSHIRE: Announces Fourth Quarter and Year-End Results
Wilshire Real Estate Investment Trust Inc. (Nasdaq:WREI) a
hybrid REIT specializing in diversified real estate
investments, today reported a net loss of $10.5 million or
$0.92 per share, for its fourth quarter ended December 31,

The loss was primarily due to adverse market conditions,
which resulted in write-downs of $5.3 million to securities
and $8.8 million of provision for loan losses during the
quarter. Excluding these items and excluding gains
on  sales of certain other securities and loans, net income
for the quarter would have been $2.3 million, or $0.20 per

For the year ended December 31, 1998 the company reported a
net loss of $56.4 million, or $4.94 per share. The loss was
primarily attributable to a total of $54.8 million of
market valuation adjustments and $11.8 million of
provisions for loan losses. Excluding these significant
items and gains on the sale of certain other loans and
securities totaling $2.3  million, net income for the year
would have been $8.0 million or $0.70 per  share.

Following negotiations with an unofficial committee of
holders of WFSG's 13% and 13% Series B Notes due 2004 ("the
Notes"), WFSG agreed to a restructuring plan, which calls
for the Notes to be converted to new common stock of WFSG.  
The plan, in the form of a prepackaged Chapter 11
bankruptcy filing, was subsequently approved by a vote of
the note holders. The confirmation hearing is scheduled for
April 12, 1999.

ZENITH: Reports $275 Million Loss in 1998
Zenith Electronics Corp. reported a 1998 year end loss of
$275.5 million and said its bondholders have agreed to a
financial restructuring plan.

Zenith said the bondholders informed the company that they
own or control over 50 percent of Zenith's outstanding 6-
1/4 percent convertible subordinated debentures due 2011.

Zenith also said its largest stockholder and creditor, LG
Electronics Inc., has advised the company that it has
received necessary Korean regulatory approvals to provide
Zenith with additional financing and to convert debt to  
equity as part of Zenith's planned reorganization.

Zenith said it would include the terms of the bondholder
agreement in documents currently being reviewed by the U.S.
Securities and Exchange Commission (SEC). After the
documents are reviewed, Zenith said it will begin  
to solicit bondholder votes for approval of a prepackaged
plan of  reorganization under Chapter 11.

The agreement provides that bondholders will receive $50
million of new 8.19 percent debentures maturing in November
2009, after Zenith is reorganized. The company will not
make principal and interest payments due on April 1,
1999, under the existing debentures.

Under an agreement with Zenith, LG Electronics has agreed
to exchange $200 million of its claims for 100 percent of
the equity of the reorganized Zenith.  In another
development, Zenith said secured on March 31 a commitment
from Citicorp North America Inc. for $150 million DIP
financing to cover the period during the restructuring. It
also secured a new three-year,  $150 million credit
facility to cover the period following completion of
the  company's restructuring.

Zenith reported a 1998 net loss of $275.5 million, or $4.08
per share, compared with a 1997 net loss of $299.4 million,
or $4.49 per share. Results for 1998 include $202.3 million
of restructuring charges, and 1997 results include $63.7
million of asset impairment charges.  Total sales were $985  
million in 1998 and $1.173 billion in 1997, reflecting
planned sales reductions in lower-margin color televisions
and changes in VCR distribution.


The Meetings, Conferences and Seminars column appears
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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-
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Debra Brennan and Lexy Mueller, Editors. Copyright 1999.  
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