TCR_Public/990503.MBX T R O U B L E D   C O M P A N Y   R E P O R T E R
     Tuesday, May 4, 1999, Vol. 3, No. 85


BN1 TELECOMMUNICATIONS: Disclosure Statement Hearing Set
BRAZOS SPORTSWEAR: Gulf Coast Sportswear Division Sale
CFS: Earnings and Expenses For First Quarter
CITYSCAPE: Disclosure Statement Ok'd After Plan Amended
CORNUCOPIA: Reports Agreement To Acquire Stockscape

COVENTRY HEALTH CARE: Annual Meeting of Shareholders
DEGEORGE HOME: Blames Lender
DOW CORNING: Committee Re-Constituted
ELDER BEERMAN: Earnings Outlook Up
FACTORY CARD: Reports Year-End Results

FAVORITE BRANDS: Final Approval of $100 M Financing
FPA MEDICAL: Hearing on Confirmation Adjourned
IMAGYN MEDICAL: Comments on Outstanding Interest Payments
INTERACTIVE NETWORK: Reports Exchange Agreement

MONTGOMERY WARD: Files Plan of Reorganization
MONTGOMERY WARD: Restructuring Transactions Under Plan
PHP HEALTHCARE: Taps Shulman, Rogers To Collect on Debt
PHYSICIANS RESOURCE: Stockholder Files Derivative Suit

PITTSBURGH PENGUINS: Judge Appoints Mediator
PONDEROSA FIBRES: Seeks Approval of Settlement
STORMEDIA: Taps Dove Brothers as Auctioneers
SUN HEALTHCARE: Reports on Operations
SYSTEMSOFT CORP: Committee Taps Counsel

THE LOEWEN GROUP: Notice of Annual Meeting
USTEL, INC: Sale of Substantially All Assets
VENCOR: Elects Not To Make Interest Payment
WILSHIRE FINANCIAL: Still Looking For Business
WORLDCORP INC: Seeks Authority To Sell Shares of InteliData
ZENITH: Extends Credit Agreement

Meetings, Conferences and Seminars


BN1 TELECOMMUNICATIONS: Disclosure Statement Hearing Set
A hearing to consider approval of the Disclosure Statement
of BN1 Telecommunications, Inc. is set for May 14, 1999 at
10:30 AM before the Honorable Marilyn Shea-Stonum, Room
250, US Courthouse, 2 South Main Street, Akron, Ohio.

BRAZOS SPORTSWEAR: Gulf Coast Sportswear Division Sale
The debtors, Brazos Sportswear, Inc., Brazos Sportswear,
LLC , Brazos Embroidery, Inc. and Morning Sun, Inc. seek
entry of an order authorizing the sale of substantially all
of the operating assets of the debtors' Gulf Coast
Sportswear Division ("GCS Assets").  To date, the debtors
state that the offer of G.C. Sportswear, LLC for a price of
approximately $8.25 million in cash plus the assumption of
certain liabilities constitutes the highest and best offer
for the GCS Assets.

Any higher bid must provide for cash consideration of at
least $250,000 higher than the cash consideration set forth
in the Purchase Agreement.

CFS: Earnings and Expenses For First Quarter
The Daily Oklahoman reports on April 28, 1999 that in a
filing with the U.S. Bankruptcy Court for the Northern
District of Oklahoma, Commercial Financial Services
reported the following earnings and expenses for the first
quarter of 1999:

Revenue  $17.29 million

Restructuring Charges  $16 million

Operating Expenses   $31.2 million

Net Loss  $42.54 million

CITYSCAPE: Disclosure Statement Ok'd After Plan Amended
The court in White Plains, N.Y., approved Cityscape
Financial Corp.'s disclosure statement for its first
amended reorganization plan and scheduled a confirmation
hearing for June 9. According to the April 27 order, copies  
of the plan and plan ballots will be sent to all interested
parties within the week, with votes due back by June 1, the
same day as the objection deadline. The consumer finance
company filed an amended plan on March 26 that slashed the
treatment afforded to the holders of senior note claims,
general unsecured claims and subordinated debenture claims
after failing to line up exit financing. Subsequently,
Cityscape filed further amendments to the plan on April 27.
The company made the revisions "in light of the fact that
they have completed the preparation of their 1998 year-end
financial information and are in the process of completing
the preparation of their financial information for the
first quarter of 1999."  (The Daily Bankruptcy Review and
ABI Copyright c May 3, 1999)

CORNUCOPIA: Reports Agreement To Acquire Stockscape
On March 2, 1999, the Company announced that it had reached
an agreement in principle for the acquisition of a
privately-held Internet investment research provider,
Stockscape Technologies Ltd. which was subject to
completion of due diligence by both companies and the
execution and delivery of definitive documentation.

On April 26, 1999, the Company and Stockscape signed a
definitive agreement to proceed with the acquisition of
Stockscape and the reorganization of the Company. The
acquisition will be accomplished by the issuance of
10,000,000 post-consolidation shares of Cornucopia
Resources Ltd., at a deemed price of C$0.50 per share for
aggregate consideration of C$5,000,000. Further conditions
precedent to the acquisition are: the consolidation of the
Company's common share capital on the basis of ten (10) old
shares for one (1) new share, a change of name of the
Company from Cornucopia Resources Ltd. to Stockscape
Technologies Ltd.; restructuring of the Board of Directors;
and commitments for a 4,000,000 unit financing on a post-
consolidation basis at C$0.50 per unit to raise maximum
proceeds of C$2,000,000.

COVENTRY HEALTH CARE: Annual Meeting of Shareholders
The Annual Meeting of Shareholders of Coventry
Health Care, Inc., a Delaware corporation, will be held on
Thursday, June 17, 1999, at 9:30 a.m., Eastern Daylight
Savings Time, at the offices of Epstein Becker & Green,
P.C., Seventh Floor, 1227 25th Street, N.W., Washington,
D.C. 20037-1156, for the following purposes:

1. To elect four Class II Directors to serve until the
annual meeting of shareholders in 2002;

2. To ratify the selection of Arthur Andersen LLP,
certified public accountants, as the Company's independent
auditors for the year ending December 31, 1999.

DEGEORGE HOME: Blames Lender
The Hartford Courant reports on April 29, 1999 that  
DeGeorge Home Alliance touted itself as a runaway success.
Backed by a national lender, the company took an unusual
concept in home financing and increased its sales nearly
sevenfold in the past 18 months.

But Peter R. DeGeorge, the company's chairman and chief
executive officer, confirmed Wednesday what had been
rumored in recent weeks: The growth is over, the company is
closed and a bankruptcy filing is no more than a week or
two away.  DeGeorge angrily blamed his primary lender,
Residential Funding Corp., for cutting off his financing
last year and then poisoning his reputation among other
lenders with a damaging lawsuit filed in January.

"They acted like a bunch of thugs," said DeGeorge, a local
entrepeneur and majority stockholder in DeGeorge Financial
Corp., a publicly traded company that owns DeGeorge Home
Alliance and some other real estate subsidiaries.

"It's basically over," DeGeorge said.

DeGeorge said that a stream of lies and misinformation were
spread about his company by Residential Funding, a  
subsidiary of General Motors Acceptance Corporation.
Residential Funding filed suit in January, accusing
DeGeorge of failing to meet financial goals and of
abandoning more than 2,100 construction mortgage  
clients. Residential, which is making good on the loans,
says it is seeking $88 million in damages to cover the
residential loans that DeGeorge approved but did not fully

DeGeorge has countersued, basically accusing the giant
lender of destroying his company, by cutting off credit in
violation of their contract. He said the damages caused by
Residential could top $1 billion. Lorna Gleason, the
general counsel of Residential, said Wednesday her  
company stood by the claims in its lawsuit: Her company
gave DeGeorge notice in September it would not extend
credit beyond its $300 million credit limit or  
the June 1 end of the contract, whichever came first.

It cut off funding in December, when DeGeorge exceeded the
$300 million limit of its revolving credit line, she said.
The reason for the cutoff was the oldest story in the
lending trade -- the lender no longer had faith in the  
borrower, she said.

"The financial performance of the company was not meeting
their representations or our expectations," she said. "We
told them we were not comfortable with extending more
credit. We told them we wanted out."

Residential Funding contends that DeGeorge abruptly stopped
servicing 2,100 of its construction loans the day after
Christmas, trying to pressure Residential into continuing
DeGeorge's credit. "They literally abandoned those  
customers on our doorstep," she said.

DeGeorge reported a $17.7 million loss in 1997 and a $20
million loss in the first nine months of 1998. Residential
Funding panicked, even though the losses were attributable
to a massive expansion, DeGeorge said. The lender ignored
the fact that DeGeorge exceeded its business goals: its
sales force grew from 70 to 700; sales increased from 150
to 1,000 a month, he said.  DeGeorge hired Lehman Brothers,
the investment banking firm, to find a new equity investor
and source of credit, but Residential Funding had
effectively choked off credit by its allegations, said
Gregory J. Hendel, DeGeorge's president and chief operating
officer. (Hartford Courant-04/29/99)

DOW CORNING: Committee Re-Constituted
For a third time, the United States Trustee for Region IX
has reconstituted the Official Committee of Unsecured
Creditors appointed in the Debtor's chapter 11 case.  The
current members are:

          Ronald M. Goldstein
          Appaloosa Management, L.P.
          26 Main St., 1st Floor
          Chatham, NJ 07928

          Peter A. Langerman
          Franklin Mutual Advisers, Inc.
          51 John F. Kennedy Parkway
          Short Hills, NJ 07078

          Jeffrey H. Aronson
          Angelo, Gordon & Co.
          245 Park Avenue
          New York, NY 10167

          Janice M. Stanton
          Contrarian Capital Management, LLC
          411 West Putnam Ave., Suite 225
          Greenwich, CT 06830

          Paul J. Coughlin, III
          Comac Partners, LP
          Comac International, N.V.
          One Greenwich Office Park
          Greenwich, CT 06831

          John W. Stevenson
          The Bank of New York
          101 Barclay Street
          New York, NY 10286

ELDER BEERMAN: Earnings Outlook Up
The Cincinnati Enquirer reports on April 21, 1999 that  
Elder-Beerman Stores Corp. Tuesday posted higher earnings
for fiscal 1998 - its first full year out of bankruptcy -
and said it is positioning itself for years of steadier

"1998, if you put a headline on it, was a year of big
growth," said Scott Davido, executive vice president and
chief financial officer at Elder. "This is a year when we
step back, we take a breath, and we make sure our execution
is as good and sharp as it can be."

The Dayton, Ohio-based retailer, which emerged from Chapter
11 bankruptcy  protection in December 1997, said earnings
after factoring in gains and charges  rose to $25.5
million, or $1.76 a diluted share. That compares with a net
loss of $29 million for fiscal year 1997.

Earnings before gains and charges rose to $13.8 million, or
95 cents a diluted share. The charge relates to integration
costs of Elder's Stone & Thomas acquisition last year.
Gains are related to the sale of real estate,  
reorganization income and tax benefits. The $13.8 million
figure excludes those items and is based on a 38 percent
income tax rate.

Sales, which include receipts from the 11 Stone & Thomas
stores, advanced 8.8 percent, to $632.4 million from $581.4
million in 1997.

Analysts said the performance is in line with expectations
for an extremely active year. Since emerging from Chapter
11 bankruptcy, Elder posted a secondary stock offering and
opened 14 new department stores, which include Stone &
Thomas. It runs 60 department stores.

Elder-Beerman plans to open three stores in 1999, each
following a prototype that involves a smaller format but
equal volume. Elder also is developing a process to closely
track sales and replenishment at each store.

FACTORY CARD: Reports Year-End Results
Factory Card Outlet Corp. (Nasdaq: FCPYQ) announced today
results for its fiscal year ended January 30, 1999.

Net loss for the 52-weeks ended January 30, 1999 was $28.4
million or $3.82 per fully diluted share compared to net
income of $2.2 million or $0.28 per fully diluted share for
the 53-weeks ended January 31, 1998. The Company's results  
for the latest fiscal year include a provision of $11.3
million or $1.52 per share (diluted) for merchandise which
is to be discontinued from the Company's ongoing
assortment, as well as inventory with excess quantities on
hand and certain seasonal inventory remaining from past
holidays; and a charge of $3.6 million or $0.49 per share
(diluted) for lease termination costs related to  
executed leases for new stores which the Company no longer
plans to operate, employee severance and the write-off of
new store closing costs and additional depreciation expense
resulting from the change in the depreciable lives of  
certain technology equipment.

Sales for the 52-weeks ended January 30, 1999 rose
approximately 30% to $226.5 million from $174.5 million for
the 53-weeks ended January 31, 1998. On a comparable store
basis, sales for the fiscal year rose 0.8%. Comparable
store sales were adversely impacted during the Spring of
1998 by an uneven flow of merchandise resulting from the
Company's conversion to a new distribution facility and
during the Fall of 1998 by lower seasonal sales partially  
resulting from significant levels of carryover merchandise
from prior years.

Stewart M. Kasen, the Company's Chairman, President and
Chief Executive Officer, said, "We have taken several steps
since the commencement of the Company's chapter 11 case on
March 23, 1999 to improve our financial and operating
position.  These steps include our previously announced $50
million debtor-in-possession financing facility and the
closing of 27 stores beginning in May 1999. The repayment
of the previous credit facilities with the debtor-in-
possession financing will result in an  extraordinary
charge of $1.3 million and the closing of the 27 stores
will  result in a charge of approximately $7.0 million in
the first quarter of fiscal  1999.  In addition, landlord
claims arising from the rejection of leases for these
closed stores may aggregate, but not exceed, $5.0 million.

Factory Card Outlet is a chain of company owned stores
offering a vast assortment of party supplies, greeting
cards, gift wrap and other special occasion merchandise at
everyday value prices.

FAVORITE BRANDS: Final Approval of $100 M Financing
Favorite Brands International Inc., the nation's fourth
largest confectionery company, today announced it was  
granted final court approval for $100 million debtor-in-
possession (DIP)  financing.  The company filed for Chapter
11 protection on March 30, 1999 and an interim order
approving the facility was issued the following day.
The financing is being led by Chase Manhattan Bank.

The company said that it is experiencing strong sales of
its newly licensed Fruit Snacks products, which are sold in
grocery and mass merchandising stores nationwide.  
Additionally, the company's Trolli branded gummies achieved
record sales in March, led by its new novelty items Trolli
Mini Burger and Brite Crawlers.

Favorite Brands' products include Jet-Puffed(R)
Marshmallows, Farley's(R) Fruit Snacks and Fruit Rolls,
Trolli(R) Gummies, Farley's(R) General Line Candy,  
Sather's(R) Packaged Candy and Snacks, a variety of
seasonal confections and Favorite Brands Ingredients.  The
company is based outside Chicago, in Bannockburn, Illinois,
and operates 13 facilities in 9 states with  
approximately 4,000 employees. In fiscal 1998, the
company's revenues exceeded $750 million.

FPA MEDICAL: Hearing on Confirmation Adjourned
FPA Medical Management Inc., et al., adjourned the hearing
on confirmation of the Second Amended Joint Plan of
Reorganization scheduled for May 11, 1999 until May 13,
1999 at 6:00 PM before the Honorable Peter J. Walsh, Chief
US Bankruptcy Court, 824 market Street, 6th Floor,
Wilmington, Delaware.

IMAGYN MEDICAL: Comments on Outstanding Interest Payments
IMAGYN Medical Technologies, Inc. (OTC Bulletin Board:
IMTI) commented that it did not pay before the  
end of the April 30th grace period, the scheduled April 1,
1999 interest payment on its $110 million 12 1/2% Senior
Subordinated Notes.  In addition, the Company stated that
it also did not pay the approximately $2.1 million of  
accrued interest on the Company's $50 million Convertible
Subordinated Debentures also due as a result of an
extension, on April 30, 1999.

IMAGYN continues to work with its financial advisor BT
Alex. Brown Inc. to explore available alternatives with
respect to a possible reorganization, restructuring or
recapitalization of the Company.  The Company is in  
discussions with its current lenders to find other
liquidity solutions.

The Company stated that under the terms of the governing
indenture and the Company's Senior Secured credit
agreement, the indenture trustees, the holders  
of the Notes and Debentures, and the Company's senior debt
lenders will have the right to declare the $110 million
principle amount of the Notes, the $50 million principle
amount of the Convertible Subordinated Debentures and
approximately $47.5 million principal amount of the senior
debt together with accrued and unpaid interest, immediately
due and payable.  If the above obligations are accelerated,
the Company's business will be materially and adversely
impacted, and as a result, it may be forced to seek
protection under federal bankruptcy laws.

IMAGYN Medical Technologies, Inc. is a designer,
manufacturer and marketer of urological, gynecological and
general surgery medical products for the health  
care market.

Integrated Packaging Assembly Corporation is an independent
North American semiconductor packaging foundry.  The
Company receives wafers from its customers and assembles
each integrated circuit in a protective plastic package.

Revenues increased 18% to $23.3 million in 1998, from $19.7
million in 1997. The company reports a net loss of $29.7
million for 1998 compared to a net loss of $15 million in
the previous year. In December 1998, the Company obtained
an additional $7 million bank line of credit.  This line,
which is guaranteed by a third party, is available to
finance operations and working capital needs through May
31, 1999.  The line provides for monthly borrowings and
interest acquired at the bank's prime rate, (7 3/4% per
annum at December 31, 1998).

INTERACTIVE NETWORK: Reports Exchange Agreement
On April 23, 1999, Interactive Network Inc. consummated the
transactions contemplated by the Exchange Agreement entered
into between the Registrant, TCI Programming Holding
Company, III, TCI Development LLC, National Broadcasting
Company, Inc., Sprint Corporation and Motorola, Inc. dated
as of April 15, 1999.

MONTGOMERY WARD: Files Plan of Reorganization
Montgomery Ward & Co., Incorporated announced on April 30,
1999 that it filed a Plan of Reorganization and Disclosure
Statement with the United States Bankruptcy Court in
Delaware which, if approved, will allow the company to
emerge from bankruptcy in August 1999. The Plan is in the  
furtherance of the agreement in principle announced earlier
this year between  the Creditors' Committee, GE Capital and
Wards.  GE Capital, Wards' majority shareholder and
substantial creditor, is a co-proponent of the Plan along
with Wards. The Plan provides for fair and equitable
treatment of all stakeholders and will allow Wards to
successfully reorganize and emerge from Chapter 11, as  
previously announced.  The Bankruptcy Court has scheduled a
confirmation hearing for July 15, 1999.

If the Plan as filed is confirmed, funding for the
distribution to unsecured creditors will be provided
through a $650 million deposit in an escrow account on
April 30, 1999.  When Wards emerges from bankruptcy, this
money and the interest it earns will be distributed to
those creditors as specified in the Plan.

As part of the restructuring provided for in the Plan, GE
Capital will acquire The Signature Group, the direct
marketing arm of Wards. Signature, which was not part of
Wards' Chapter 11 case, will continue to have the
right to market  to Wards' customers.  In the Plan, GE
Capital will obtain rights to all the equity in the
reorganized retailer in exchange for its claims against

Key accomplishments which have contributed to the Company's
turnaround include:

-- Focusing on one core strategy  --  Wards full line
retail stores; -- Closing  more than 100 under-performing

-- Developing and successfully introducing a new store
prototype; -- Upgrading merchandise offerings and focusing
on customer service;

-- Introducing a new marketing strategy targeted at core
customers; --  
Enhancing operations and technology infrastructure; and

-- Cutting costs on a company-wide basis.

The Company's three initial prototype stores have reflected
sales increases over the prior year in excess of 40
percentage points above the combined performance of the
entire chain since their opening in September 1998.
Wards will convert 40 additional stores to the new
prototype in 1999 and intends to remodel half the chain in
the next two years.

In 1998, Wards dramatically reduced its losses from
continuing operations (before taxes and reorganization
costs and Signature earnings) and showed an improvement of
$585 million in earnings from continuing operations over
1997.  Gross margin dollars, a major focus of the Company,
were up 18% over 1997 with increased margins in nearly
every merchandise category.  The Company anticipates a
positive EBITDA (Earnings Before Interest Taxes
Depreciation and Amortization) in Fall 1999 and for the
year 2000, and profitability in 2001.

MONTGOMERY WARD: Restructuring Transactions Under Plan
The Joint Plan of Montgomery Ward is premised on the
formation of a new Limited Liability Corporation, known as
the New Retailer.  The New Retailer will receive all
of Montgomery Ward's retail assets designated by the
Proponents, excluding Signature and other Retained Assets,
including the excess funds from the Pension Plan.  
Montgomery Ward will issue a New Note to the New Retailer
for the fair market value of the assets it gives up less

Montgomery Ward will distribute the LLC interests in the
New Retailer in compromise the GE Capital Non-Trade Claims,
leaving GE Capital as the owner of the New Retailer.  

Montgomery Ward, as the owner of Signature and the holder
of roughly $233,000,000 (before payment of approximately
$89,000,000 in Federal taxes) of excess funds from the
Pension Plan, will sell Signature to GE Capital for
$885,000,000 in a separate transaction.  The $650,000,000
escrowed by GE Capital on April 30, 1999, is a set-off to
the $885,000,000 purchase price.  Montgomery Ward will
satisfy creditors' claims (excluding the GE Capital Non-
Trade Claims) from the cash to which its estate has
been reduced, and any residual amounts will revert to GE

The Debtors indicate that they intend to seek substantive
consolidation of their estates (excluding Lechmere) with MW
Holding for all purposes related to the Joint Plan,
including voting, confirmation and distribution.  
Confirmation of the Joint Plan is predicated on the
Debtors' obtaining entry of an order permitting substantive

The Joint Plan proposes a compromise of Montgomery Ward's
$423,024,780 Intercompany Claim against Lechmere to the
extent necessary to permit distribution of a 14% to 14.5%
dividend to Lechmere creditors.  The Debtors insist that
Montgomery Ward's claim against Lechmere is fully
secured and would withstand any attack under theories
attempting to recharacterize the loan as an equity
contribution or otherwise equitably subordinate the
Intercompany Claim, and believe that any litigation would
wind-up with (i) Montgomery Ward holding an allowed, albeit
significantly undersecured, $113,000,000 claim and (ii)
unsecured Lechmere creditors still out of the money.  This
compromise pays out roughly up to $10,000,000 to Lechmere
creditors in exchange for a complete settlement of
all contests concerning the Intercompany Claim.

The Joint Plan grants broad releases to the Creditors'
Committee, the Post-Effective Date Claims Resolution
Committee, the GE Capital Entities, the DIP Lenders, and
all of these parties' agents, advisors, accountants,
investment bankers, consultants, attorneys and other
representatives of any of the foregoing or of the Debtors,
and operates as an injunction against Class 3 Creditors who
accept distributions under the Joint Plan.

To fund payment of all administrative claims (including
payment of all DIP Facility borrowings) as required under
the Plan, GE Capital says that it will arrange any
Borrowing Facility that may be required.  Montgomery Ward
says that, based on preliminary discussions with potential
lenders, the Debtors believe they will be able to negotiate
and effectuate an Exit Financing Facility to fund the New
Retailer's on-going working capital needs.  The Debtors
believe, based on their ability to meet certain
borrowing base criteria and GE Capital's guarantee of a
portion of the facility, they will obtain an Exit Financing
Facility in the form of revolving credit with a maturity
date of March 31, 2003, in the aggregate principal amount
of $1,300,000,000.  

All Montgomery Ward officers currently employed will retain
their positions with the New Retailer, at the same rate of
pay.  The consummation of the Joint Plan is not deemed to
be a change in control as that concept may be used in any
employment agreement to which the Debtors or GE Capital are
a party.  GE Capital will designate the individuals who
will serve as New Directors for the New Retailer.  Further,
the Joint Plan amends the Employee Retention and Incentive
Program to provide that, notwithstanding the occurrence of
the Confirmation Date, no Emergence Incentive Bonus
Payments will be made to Executives.  

The Proponents tell creditors that the Joint Plan is the
product of extensive negotiation among the Debtors, GE
Capital and the Creditors' Committee.  The Proponents are
convinced there is no better plan for the reorganization of
the Debtors.  (Montgomery Ward Bankruptcy News Issue 39
5/1/99; Bankruptcy Creditors' Services)

Oxford Health Plans, Inc. (NASDAQ:OXHP) announced net
earnings of $3.2 million, or $0.04 per common share, for
the quarter ended March 31, 1999. The first quarter results
were favorably affected by a one-time after tax gain of
$7.8 million associated with the disposition of its New
York Medicaid business. Excluding the impact of the
one-time gain, Oxford posted a loss of $4.6 million, or
$0.06 per common share.  "The Company's first quarter
operating results are better than previously expected and
reflect Oxford's improved premium pricing and initiatives
to control medical and administrative spending," said
Oxford Health Plans' Chief Executive Officer, Norman C.
Payson, M.D.

"Based on our first quarter results, we now believe Oxford
can report positive earnings per share for 1999, although
we continue to expect losses in the second quarter,
principally due to seasonal increases in health care costs
and small increases in administrative spending as a
percentage of operating revenue," stated Dr. Payson.

Revenues for the quarter ended March 31, 1999 were $1.06
billion, down 6.0% from the fourth quarter of 1998. As of
March 31, 1999, Oxford's total membership was approximately
1,691,000 compared to 1,881,400 at December 31, 1998. This
reduction resulted from withdrawals from the New York and
Pennsylvania Medicaid programs (97,800 members), decreases
in Medicare membership (42,700 members) and reductions in
commercial membership (49,900 members).

Founded in 1984, Oxford Health Plans, Inc. provides health
plans to employers and individuals in New York, New Jersey
and Connecticut, through its direct sales force,
independent insurance agents and brokers. Oxford's services
include traditional health maintenance organizations,
point-of-service plans, third-party administration of
employer-funded benefits plans and Medicare plans.

PHP HEALTHCARE: Taps Shulman, Rogers To Collect on Debt
The debtor, PHP Healthcare Corporation, seeks court
authority to employ Shulman, Rogers, Gandal, Pordy & Ecker,
PA as special counsel for the debtor to pursue Jack M.
Mazur, the debtor's former CEO, who allegedly owes the
debtor more than $4.8 million in outstanding and unrepaid

PHYSICIANS RESOURCE: Stockholder Files Derivative Suit
On April 20, 1999, Robert Alpert, a stockholder of
Physicians Resource Group, Inc. filed in the state district
court of Harris County, Texas a derivative lawsuit on
behalf of the Company.  The Suit names David
Meyer, M.D. and Lucius E. Burch, III as defendants.  Claims
set forth in the pleadings include claims that the
Company's Board of Directors is improperly constituted and
claims that the Company's previously announced
restructuring activities are not in the best interests of
the Company and its stockholders.  Relief sought includes
(i) a request that the Court compel a special meeting of
stockholders to allow the election of new directors of the
Company, (ii) a request for an injunction seeking to enjoin
the Company from pursuing its previously announced
restructuring activities and (iii) payment of damages by
Dr. Meyer and Mr. Burch to the Company.

PITTSBURGH PENGUINS: Judge Appoints Mediator
U.S. Bankruptcy Judge Bernard Markovitz on Friday appointed
a mediator, U.S. Bankruptcy Judge Bruce McCullough, to be
available to both sides of the Penguins-SMG conflict
outside of court. One side, headed by retired hockey star
Mario Lemieux, wants to renegotiate the Penguins' Civic
Arena lease and get a new arena by the 2003 season. Daniel
Shapira, attorney for landlord SMG, said the company has a
number of concerns about Lemieux's reorganization
plan, which includes the potential for a government
takeover of the lease. He said the team is obligated to
play at the Civic Arena until 2012. "There is a clear and
distinct possibility that the lease will remain in effect
as it currently stands,'' Shapira said. Lemieux on Friday
introduced his 10 business partners in his bid to purchase
the Pittsburgh Penguins team: Ronald Burkle, Robert
Brooks, Angelo Falconi, Mark Hofmann, Robert Hofmann II,
Anthony Liberati, William Kassling, Madison Realty Group,
Millstein Industries and Bruce Zoldan. Markovitz said the
creditors can vote on the Lemieux plan; no vote has been
scheduled as yet, according to the Associated Press. The
National Hockey League has set a deadline of May 31; if no
reorganization plan has been approved, the league has
threatened to dissolve the franchise. (ABI 03-May-99)

PONDEROSA FIBRES: Seeks Approval of Settlement
The debtor, Ponderosa Fibres of Washington, LP seeks court
approval of a settlement among, the debtor, Ponderosa
Fibres of America, Inc., Parson's Corporation, Parson's
Main, Inc., St. John's Place Consultant's Inc. and the
unofficial Bondholders' Committee.  The original claim
filed by Parson's Main Inc. (PMI) was in the amount of
$22.9 million and arose from a certain contract for the
engineering , procurement, construction and commissioning
of a mixed office waste chemical fiber deinking mill (the
"EPC Contract")

Pursuant to the terms of the settlement the Parsons Parties
shall be obligated to pay the debtor the sum of $26.6
million in immediately available funds in settlement of the
debtor's claims for liquidated damages under the EPC
Contract.  PMS's claim shall be allowed as a Class 4 claim
under the amended plan in the amount of $13.6 million; and
any secured claim shall be withdrawn.  The PMI debt and the
Ponderosa Debt shall be offset, and PMI shall pay to the
debtor $13 million in immediately available funds, which
sum the debtor shall distribute under the plan as
litigation proceeds.

STORMEDIA: Taps Dove Brothers as Auctioneers
The debtors, StorMedia Incorporated and debtor affiliates
seek authority to employ Dove Brothers, LLC as their
auctioneers.  The firm will conduct several piecemeal
auctions of certain of debtors' domestic and foreign

The debtors tell the court that it is necessary for the
debtors to employ an auctioneer because it is the most
efficient manner in which to dispose of certain assets
which are no longer of use to the debtors.  Dove shall
charge a 10% Buyer's Premium at the auction for its own
account as its compensation for auction services.  Debtors
have authorized an expense budget not to exceed $100,000
for actual and reasonable costs of the auction.

SUN HEALTHCARE: Reports on Operations
Sun Healthcare Group, Inc. amended its Annual Report on
Form 10-K for the fiscal year ended  December 31, 1998 by
attaching  an exhibit, the financial data schedule.

The company reports total revenues of $3,088,460 and a net
loss of $753,693.

SYSTEMSOFT CORP: Committee Taps Counsel
The Official Committee of Unsecured Creditors request that
the court enter an order authorizing the employment of the
law firm of Hanify and King, PC as counsel to the

The firm will assist in the investigation of the acts and
financial condition of the debtor, give advice with respect
to any offers to purchase debtor's assets; give advice with
respect to any proposed plan; assist in preparing pleadings
and documents; determine the existence of causes of action;
analyze the status and priority of claims; and direct
activities of accountants or other professionals.

THE LOEWEN GROUP: Notice of Annual Meeting
The Annual General Meeting of the holders of Common shares
without par value of The Loewen Group Inc. will be held at
the Radisson Hotel Burnaby, 4331 Dominion Street, Burnaby,
British Columbia, Canada, at 10:30 a.m. on Friday, the 4th
day of June, 1999, for the following purposes:

1.    To receive the report of the Directors to the
shareholders and the financial statements of the Company
for the year ended December 31, 1998, together with the
report of the auditors thereon;

2.    To elect two Directors for terms of office as more
particularly described in the accompanying Proxy Statement
and Information Circular;

3.    To appoint auditors for the ensuing year;

4.    To authorize the Directors to fix the remuneration to
be paid to the auditors;

5.    To consider and, if thought advisable, to approve an
amendment to the 1994 Outside Director Plan to increase the
number of Common Shares issuable thereunder by 200,000
Common Shares.

USTEL, INC: Sale of Substantially All Assets
The debtors, USTEL, Inc. and Arcada Communications Inc. are
seeking approval of a sale of substantially all of the
assets of the debtors to Rocky Mountain Internet, Inc.

The consideration offered by Rocky Mountain Internet is $17
million cash with an adjustment up or down based on a
comparison of the debtors' February revenues with revenues
in the month prior to closing of a sale.  The assets
include equipment and other tangible personal property,
customer accounts, intellectual property, including
licenses and sublicenses; certain leases and executory
contracts, deposits and prepayments , franchises and rights
from government agencies and state PUC Authorizations and
FCC registrations.

VENCOR: Elects Not To Make Interest Payment
Vencor, Inc. (NYSE: VC) announced that it has elected not
to make the interest payment of approximately $14.8 million
due today on the Company's $300 million 9 7/8%  Guaranteed
Senior Subordinated Notes due 2005 (the "Notes").  The
indenture under which the Notes were issued provides for a
30-day grace period before an Event of Default will occur
due to the nonpayment of interest.  If the interest payment
is not made within the 30-day grace period, the Notes  may
be declared immediately due and payable. However, if the
Company's senior bank debt has not been accelerated, the
Notes may not be accelerated until five  days after notice
is given to the Company's senior bank lenders. The Notes
are  a general unsecured obligation of the Company and rank
subordinate in right of  payment to the Company's senior
bank debt and lease obligations. As previously announced,
the Company continues to negotiate with its senior bank
lenders and with Ventas, Inc. (NYSE: VTR) in an effort to
obtain a  sustainable capital structure for the Company and
a reduction in the rents paid  by the Company to Ventas.
The Company also intends to negotiate with the  holders of
the Notes as part of this effort.  Vencor is a long-term
healthcare provider operating hospitals, nursing centers  
and contract ancillary services in 46 states.

WILSHIRE FINANCIAL: Still Looking For Business
The National Mortgage News reports on April 26, 1999 that
Wilshire Financial Services Group announced that courts in
Delaware had approved its bankruptcy reorganization plan.
Less than a week later, Wilshire senior vice president Zan
Hamilton was at the MBA National Secondary Market
conference, looking for new business.

Bankruptcy filing is the beginning of the end for most
firms, but for Wilshire, it represents a new beginning
after volatility in the capital markets wiped out the
firm's equity last fall and forced a restructuring of long-
term  debt.

Unlike other firms that securitize subprime mortgages,
Wilshire's trouble did not disrupt its access to warehouse
credit and Wall Street financing. And Wilshire's
subsidiaries continued to originate, buy and service
subprime and distressed mortgage loans.

"You have the stigma of a bankruptcy, but what kind of
bankruptcy is it where you have no creditors and no lenders
impaired?" Mr. Hamilton asked.

Today, $184 million of long-term debt affected by the
bankruptcy has been  converted to 100% of the common stock
of the reorganized company, with nearly  unanimous support
from bondholders and approval of the bankruptcy
courts. And  the firm is once again looking to grow.

While most subprime firms that filed bankruptcy plans were
headed for the exits, some distinct features about Wilshire
created a viable restructuring opportunity.  The firm's
subsidiaries, which include a bank and divisions that
acquire and service "scratch and dent" mortgage loans both
in the United States and abroad, remained in operation
throughout the process.

Mr. Wiederhorn points out that Wilshire has not defaulted
on any of its credit lines. It continues to have access to
warehouse lines of credit and other funding sources.
By converting debt to equity, The restructuring plan has a
tax advantage for the firm, because the debt exchanged for
equity in a restructuring does not create the tax liability
that ordinary debt forgiveness would create.

Mr. Wiederhorn said the tax issue was a major reason the
firm was forced to seek a restructuring through bankruptcy

Wilshire Financial and Wilshire's REIT were forced to shed
assets in the third and fourth quarters, and for a time the
company was not purchasing assets. The company's servicing
portfolio, which stood at $4.5 billion last September,
today totals $3 billion. Wilshire owns about $1.3 billion
of the servicing and provides third-party servicing on the
rest. The company is now eager to reverse the trend and
start growing again.

Mr. Hamilton said the company expects to grow its third
party servicing business, capitalizing on the firm's
expertise in managing distressed loans.

First Bank of Beverly Hills, one of Wilshire's
subsidiaries, is actually overcapitalized.

Wilshire hopes to grow the bank's asset size from $600
million to about $1 billion this year.

Already, the company is focused on growth opportunities in
the business of buying distressed commercial real estate
loans and providing default servicing overseas.

Currently, Wilshire has some $200 million in distressed
assets in Europe. Mr. Wiederhorn expects to see growth in
both the overseas and commercial businesses. Wilshire also
expects to grow its business of acquiring charged off
consumer and real estate debt. As for the restructuring in
bankruptcy courts, both Mr. Hamilton and Mr.  Wiederhorn
credit the firm's lenders and Wall Street partners for
being supportive during the restructuring. But Mr.
Wiederhorn sees the bankruptcy  issue in the past tense.

"We finished that. It's over with."

Going forward, he said the firm will still rely on deposits
at its bank subsidiary, credit lines and securitization as
means of funding its businesses.  While the securitization
market for subprime mortgage loans has not returned to  the
favorable spreads and subordination levels that prevailed
last summer, Mr.  Wiederhorn said he has seen improvement,
and investors are interested in buying  the senior parts of

"Our difference today is that we are much more focused on
the different financial strategies on the securitization
side," he said.(Copyright 1999) (National Mortgage News-

WORLDCORP INC: Seeks Authority To Sell Shares of InteliData
The debtor, WorldCorp, Inc. seeks authorization to sell
shares of InteliData Technologies Corp., a Delaware
corporation, from time to time and to substitute the net
proceeds of sale as collateral for the obligations
currently secured by the InteliData shares - the world
airways Loan or the Atlas Stockholder Notes, as applicable.  
Given a recent change in the market price of InteliData
shares, the debtor believes it makes good business sense to
be in a position to sell shares into the market so long as
market prices remain favorable.

ZENITH: Extends Credit Agreement
Zenith Electronics Corp. has extended its  
credit agreement with a lending group led by Citicorp
through Aug. 31, 1999.  The Citicorp facility, which
previously had been extended through April 30, provides for
up to $125 million in revolving loans. The facility must be
repaid by the earlier of the company's court filing for its
prepackaged plan of reorganization and Aug. 31.

Meetings, Conferences and Seminars
May 13-15, 1999
      Partnerships, LLCs, and LLPs: Uniform Acts, Taxation,
      Securities, and Bankruptcy Conference
         Savannah, Georgia
            Contact: 1-800-CLE-NEWS

May 28-31, 1999
      51st Annual New England District Meeting
         Equinox Resort, Manchester Village, Vermont
            Contact: 1-413-734-6411   

June 3-6, 1999
      Central States Bankruptcy Workshop
         Grand Traverse Resort, Traverse City, Michigan
            Contact: 1-703-739-0800

June 17-19, 1999
      Fundamentals of Bankruptcy Law Conference
         Crowne Plaza Hotel, Seattle, Washington
            Contact: 1-800-CLE-NEWS

July 1-4, 1999
      Western Mountains Bankruptcy Law Institute
         Jackson Lake Lodge, Jackson Hole, Wyoming
            Contact: 1-770-535-7722
July 10-15, 1999
      105th Annual Convention
         Chateau Mont Tremblant, Mont Tremblant, Quebec
            Contact: 1-312-781-2000 or

July 15-18, 1999
      Northeast Bankruptcy Conference
         Mount Washington Hotel & Resort
         Bretton Woods, New Hampshire
            Contact: 1-703-739-0800

August 4-7, 1999
      Southeast Bankruptcy Workshop
         The Ritz-Carlton, Amelia Island, Florida
            Contact: 1-703-739-0800

August 26-28, 1999
      Real Estate Defaults, Workouts and Reorganizations
         San Francisco, California
            Contact: 1-800-CLE-NEWS

August 29-September 1, 1999
      1999 Convention
         Grove Park Inn, Asheville, North Carolina
            Contact: 1-803-252-5646 or

September 16-18, 1999
      Southwest Bankruptcy Conference
         The Hotel Loretto, Santa Fe, New Mexico
            Contact: 1-703-739-0800

September 27-28, 1999
      Conference on Corporate Reorganizations
         Regal Knickerbocker Hotel, Chicago, Illinois
            Contact: 1-903-592-5169 or   

October 6-9, 1999
      73rd Annual Meeting
         San Francisco Marriott, San Francisco, California
            Contact: 1-803-957-6225

November 29-30, 1999
      Distressed Investing '99
         The Plaza Hotel, New York, New York
            Contact: 1-903-592-5169 or   

December 2-4, 1999
      Winter Leadership Conference
         La Quinta Resort & Club, La Quinta, California
            Contact: 1-703-739-0800


The Meetings, Conferences and Seminars column appears in
the TCR each Tuesday.  Submissions via e-mail to are encouraged.  Bond pricing,
appearing in each Friday edition of the TCR,
is provided by DLS Capital Partners, Dallas, Texas.

S U B S C R I P T I O N   I N F O R M A T I O N     
Troubled Company Reporter is a daily newsletter, co-
published by Bankruptcy Creditors' Service, Inc.,
Princeton, NJ, and Beard Group, Inc., Washington, DC.  
Debra Brennan and Lexy Mueller, Editors. Copyright 1999.  
All rights reserved.  ISSN 1520-9474.  

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

Information contained herein is obtained from sources
believed to be reliable, but is not guaranteed.   
The TCR subscription rate is $575 for six months delivered
via e-mail. Additional e-mail subscriptions for members of
the same firm for the term of the initial subscription or
balance thereof are $25 each.  For subscription
information, contact Christopher Beard at 301/951-6400.  
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