TCR_Public/990505.MBX T R O U B L E D   C O M P A N Y   R E P O R T E R
     Wednesday, May 5, 1999, Vol. 3, No. 86


203 N. LA SALLE: Supreme Court Sides With Creditors
BISCAYNE APPAREL: Subsidiaries File for Chapter 11
BUILDERS TRANSPORT: Proposed Dispute Resolution Program
CALDOR: Trustee Disbands Equity Committee
CFI MORTGAGE: Order Authorizes Retention of Accountant

CHERRYDALE FARMS: Last Date To File Proofs of Claim
CITYSCAPE FINANCIAL: Financial Statements
CITYSCAPE FINANCIAL: Seeks Approval To Pay Bonuses
CML GROUP: Deadline For Filing Proofs of Claim
CRIIMI MAE: Management Committee Taps Penta Advisory

DIXONS US: Seeks Extension of Exclusivity
FACTORY CARD: Committee Taps Co-Counsel
FIRSTPLUS FINANCIAL: Hearing Scheduled For May 4, 1999
FULCRUM DIRECT: Seeks Extension of Exclusivity
GARDEN BOTANIKA: BankBoston Provides $7M Credit Facility

IMAGE PHOTO: Letter From the President
KIWI: FAA Deal Gets Court Approval
LOGAN GENERAL: Gets Extension To File Plan
MONTGOMERY WARD: Summary of Treatment of Claims in Plan
PALM SPRINGS GAMING: Plans Liquidation

PITTSBURGH PENGUINS: Possible Partner For Mario
RAND ENERGY: Order For Limited Use of Cash Collateral
SGL CARBON: Business Bottomed Out; Recovery Expected
SGL CARBON: Settles Antitrust Case
SGSM ACQUISITION: Seeks OK To Return Inventory For Credit

SOWERS PRINTING: Files Chapter 11
SUN HEALTHCARE: S&P Lowers Rating on Securities
THE PENN TRAFFIC: Seeks More Time To Assume/Reject Leases


203 N. LA SALLE: Supreme Court Sides With Creditors
The United States Supreme Court delivered its decision
concerning the new value exception to the absolute priority
rule Monday in the case of Bank of America National Trust
and Savings Association v. 203 North LaSalle Street
Partnership, stating that pre-petition equity holders may
not, over the objection of a senior class of impaired
creditors, contribute new capital to and receive ownership
interests in a reorganized debtor when that opportunity is
given exclusively to the old equity holders. The majority
opinion (approved 8-1) was authored by Justice David H.
Souter, who wrote that the plan "is doomed" because it let
shareholders retain ownership "without extending an
opportunity to anyone else either to compete for that
equity or to propose a competing reorganization plan."

The plan at issue offered existing equity the exclusive
opportunity to participate in the reorganized debtor by
contributing new capital. This opportunity is property, the
high court said, and the very fact that it is an exclusive
right, that is not open to market valuation by competing
bids or even competing plans, means that it was given "on
account of" the pre-bankruptcy equity interests in
violation of the absolute priority rule. Absent some form
of competition or market exposure, the majority concluded
that the mere contribution of new value is insufficient to
permit cramdown under 11 U.S.C. ' 1129(b)(2)(B)(ii).
Importantly, the majority declined to declare a per se rule
rejecting the new value exception on the basis of statutory
construction or legislative history.

The lone dissenter was Justice Paul Stevens, who said he
believed the appeals court correctly approved the plan.
Justice Clarence Thomas (joined by Justice Antonin Scalia)
wrote a concurrent opinion.

BISCAYNE APPAREL: Subsidiaries File for Chapter 11
Biscayne Apparel, Inc., (Nasdaq OTC BB:BISD) Monday
announced that its subsidiary, Biscayne Apparel
International, Inc. ("BAII") and BAII's subsidiary,
Mackintosh of New England, Co. ("Mackintosh") filed for
protection under Chapter 11 of the Bankruptcy Code on April
30, 1999.

The Chapter 11 petitions were filed in the United States
Bankruptcy Court for the Southern District of New York.

The majority of the assets and the operations of both BAII
and Mackintosh, other than accounts receivable, were sold
to third parties during the fourth quarter of 1998.

Biscayne and its other subsidiary, M&L International, Inc.
("M&L"), had filed for protection under Chapter 11 of the
Bankruptcy Code on February 5,1999. On March 5, 1999
Biscayne sold the operations and a substantial portion
of the  assets of M&L, other than accounts receivable, to a
third party.

BUILDERS TRANSPORT: Proposed Dispute Resolution Program
The debtors seek an order approving and instituting a
program of alternative dispute resolution for all tort
claims against one or more of the debtors that arise from
motor vehicle accidents occurring before the commencement
of the debtors' Chapter 11 case on May 21, 1998.

The debtors estimate that pre-petition accident claims
aggregate more than $85 million and that the program will
resolve the allowability of those claims within six months
and a t a cost of no more than $75,000 exclusive of fees
and expenses of counsel.

Holders of claims must make an election; Either to never
seek collection of any settlement, judgment or other
recovery right for the pre-petition accident claim from    
the debtors' bankruptcy estates or to submit the claim for
liquidation.  Opt-out claimants will be able to immediately
pursue the claim.

CALDOR: Trustee Disbands Equity Committee
The United States Trustee, acknowledging that the Debtors'
cases are administratively insolvent and the assets
insufficient to pay all of the post-petition administrative
expenses, has disbanded the Official Committee of Equity
Security Holders effective April 30, 1999. (Caldor
Bankruptcy News Issue 33; 04-May-99 -  Bankruptcy
Creditors' Service Inc.)

CFI MORTGAGE: Order Authorizes Retention of Accountant
Judge Paul G. Hyman of the US Bankruptcy Court, Southern
District of Florida entered an order in the case of CFI
Mortgage Inc. approving the retention of Martin Leventhal
of Winick, Sanders, Leventhal as accountant for the debtor
on a general retainer.  The debtor is authorized to advance
a fee and cost retainer in the amount of $25,000.

CHERRYDALE FARMS: Last Date To File Proofs of Claim
The US Bankruptcy Court for the District of Delaware
entered an order establishing June 1, 1999 at 4:00 PM as
the last date and time for filing proofs of claim against
the debtor.

CITYSCAPE FINANCIAL: Financial Statements
For the year ended December 31, 1998, Cityscape Financial
Corp. reports total assets of $209,337,961 compared to
total assets of $394,001,809 for the year 1997.  The
company also reports total liabilities of $606,912,912 for
the year ended December 31, 1998 compared to total
liabilities for the year 1997 of $570,826,817.  

The company reports a net loss of $220,749,943 for 1998
compared to a net loss of $414,898,969 for 1997.

CITYSCAPE FINANCIAL: Seeks Approval To Pay Bonuses
Cityscape Financial Corp. and Cityscape Corp, as debtors,
seeks approval of the payment of 1998 bonuses to senior
management in the aggregate amount of $1,135,000; 1998 stay
bonuses to mid-level employees which total less than
$11,000 plus $18,000 to additional employees and approval
of 1999 stay bonuses for certain employees in the aggregate
amount of $462,441; assumption of 3 employment agreements
(the employee in charge of the debtors' sales of mortgage
loans, the employee in charge of the debtors' operations
and  the CFO) and approval of the terms of the continued
employment of the CEO.

The debtors assert that the continued employment of 20 key
employees together with senior management will contribute
greatly to the debtors' prospects for a successful

CML GROUP: Deadline For Filing Proofs of Claim
In the case of CML Group, Inc., the US Bankruptcy Court for
the District of Massachusetts, Western Division, entered an
order setting June 14, 1999 as the Bar Date in the case.  
All proofs of claim must be filed on or before June 14,
1999 at 4:00 PM.

CRIIMI MAE: Management Committee Taps Penta Advisory
The Official Committee of Unsecured Creditors appointed in
the case of CMI Management, Inc. filed an application to
employ PENTA Advisory Services LLC as accountants and
financial advisors.  Simultaneously, the Committee has
filed its withdrawal of its pending application to employ
Reznick, Fedder & Silverman as accountants and financial

The Committee discovered the existence of unusual financial
transactions by the debtor, including what appear to be
prejudicial distributions and/or uses of funds that are a
part of the management estate.  According to the Committee
these transactions occurred despite assurances by the
debtors that any such questionable activity would not
occur, at least not without prior notice.  The Committee
believes that it cannot rely solely on the debtors'
information and analysis and believes that it must receive
assistance from its own accountants and financial advisors
in order to protect the management estate and the rights of
its creditors.

The firm will advise the Committee with respect to monthly
operating reports, financial information from the debtor
and will advise the Committee with respect to potential
improper transactions, any plan of reorganization, the
financial condition of the debtor, and will provide
litigation support services.

The firm will be paid on an hourly basis.  The standard
hourly rates for members of the firm range from $195 to
$275; for managers and supervisors, they range from $155 to
$165 and for seniors and staff they range from l$100 to

DIXONS US: Seeks Extension of Exclusivity
The debtors, Dixons US Holdings, Inc. and its debtor
affiliates seek an extension of the exclusive periods in
which to file a plan of reorganization and to solicit

The debtors seek an extension of approximately 60 days,
from April 26, 1999 through and including June 25, 1999, of
the period during which the debtors will maintain the
exclusive right to file a plan or plans resolving these
cases, as well as an extension through August 25, 1999 of
the period during which the debtors will have the exclusive
right to solicit acceptances to such a plan.

The debtors state that they are very close to resolving
these cases.  The global settlement agreement between the
debtors, the Committee, Fretter, the Fretter Creditors'
Committee and certain other related third parties became
effective in October, 1998.  The proceeds from the Global
Settlement will be used to fund a liquidating plan of
reorganization.  The debtors seek the extension to afford
them time to complete negotiations with the Committee and
the plan confirmation process.  

The debtors are also requesting an additional 30 days to
file a disclosure statement.  Pursuant to previous orders
of the court, the debtors have until April 26, 1999.

FACTORY CARD: Committee Taps Co-Counsel
The Official Committee of Unsecured Creditors of Factory
Card Outlet Corp. and Factory Card Outlet of America Ltd.
seeks to retain Klehr, Harrison, Harvey, Branzburg & Ellers
LLP as co-counsel to the Committee, effective as of April
6, 1999.

The firm will generally attend hearings pertaining to the
cases; review applications and motions filed in connection
with the cases; communicate with OSH&R and advise the
Committee; provide expertise with respect to these cases
and any procedural rules and local rules.

FIRSTPLUS FINANCIAL: Hearing Scheduled For May 4, 1999
A hearing on the emergency joint motion of Firstplus
Financial Inc. ("Financial") and Firstplus Special Funding
Corp to approve a Forbearance Agreement and expedited
motion of Firstplus Financial, Inc.; and an interim order
authorizing postpetition secured financing and authorizing
the debtor to enter into a postpetition mortgage loan
purchase and sale agreement has been scheduled for May 4,
1999 at 2:15 PM.

The letter agreement provided to the court for approval
resolves Ernst & Young's audit concerns regarding FirstPlus
Bank, allowing a clean audit opinion to be issued.  This
will eliminate the emerging threat to Western Interstate
Bank Corp.,("WIB") owner of FirstPlus Bank.  WIB is now
servicing approximately $7 billion in mortgage loans that
have substantial value to Financial.  Financial believes
that its interest in these mortgage loans will form the
basis for plan payments to Financial's creditors.

FULCRUM DIRECT: Seeks Extension of Exclusivity
Fulcrum Direct, Inc. and its debtor affiliates seek an
extension of the Filing Period through and including July
30, 1999 and the Solicitation Period through and including
September 30, 1999.  Fulcrum states that the current
deadline does not afford Fulcrum a realistic opportunity to
formulate a comprehensive plan of liquidation.  

Until Fulcrum has had additional time to further analyze
and pursue all potential causes of action against third
parties, it is not able to fully assess the recoveries that
will be available to the estates and, accordingly, is not
in the position to formulate a plan of liquidation.

GARDEN BOTANIKA: BankBoston Provides $7M Credit Facility
BankBoston Retail Finance Inc. announced that it has
provided a $7 million DIP line of credit, subject to the
final approval of the bankruptcy court, to  Garden
Botanika, Inc. Headquartered in Redmond, WA, Garden
Botanika, Inc. is a specialty retailer of botanically-based
personal care products. The funds will provide the working  
capital necessary to execute its long-term operating

"Garden Botanika has a clear vision and the ability to
capitalize on business opportunities," said Ward K. Mooney,
president of BankBoston Retail Finance Inc. "This financing
will allow them to pursue their strategic objectives while
continuing to meet their customers' needs."

"BankBoston Retail Finance has given us great support and
assistance," said Arlee J. Jensen, president and chief
executive officer of Garden Botanika, Inc. "This credit
facility should return us to our operating potential."

Garden Botanika, Inc. is a mall-based specialty retailer
and catalog company offering a broad selection of
cosmetics, skin and body care products and fragrances. Its
products incorporate natural plant oils, botanical extracts
and  herbal infusions and use no animal by-products or
animal testing. Following the completion of 95 store
closings as part of its reorganization efforts, the
company will have 150 stores nationwide and will continue
to operate its own production and distribution facilities.

BankBoston Retail Finance Inc. is one of the leading asset-
based lenders in the country exclusively devoted to the
retail industry. The company's staff, many of whom are
former retailers, bring a wide range of expertise to each  
relationship. BankBoston Retail Finance provides inventory-
based working capital loans, long-term capital for
expansion, turnaround financing, capital markets advisory
services, global trade finance and cash management

The company has agented more than $3 billion in financing
to retailers across the U.S., Canada and the U.K.
BankBoston (NYSE: BKB), with assets of $75.7 billion and
some 25,000 employees, is the nation's oldest commercial

BankBoston is engaged in consumer and business banking in
New England; delivering sophisticated financial solutions
to corporations and governments nationally and
internationally; and full-service banking in leading Latin  
American markets. The Corporation's common stock is listed
on the New York and Boston stock exchanges.

IMAGE PHOTO: Letter From the President
In a letter to the shareholders of Image-Photo Systems,   
Inc., Manuel Lopez, President, stated that the current lack
of investor and shareholder confidence has made it
impossible for Image-Photo Systems, Inc. (OTC BB:FOTG) to
secure the financing required for its wholly owned
subsidiary, Phototek International, Inc.

The Company announced a Letter of Intent with respect to
Phototek becoming a joint venture between the Company and
Agora Holdings, Inc.

Under the terms of the proposed joint venture, Agora will
provide an initial funding for Phototek in the amount of
$250,000 and the Company will provide Phototek with
subsequent financing in the amount of $150, 000.

The restructuring of the Company, including the 1 for 10
reverse split of its stock, also announced yesterday, are
necessary in order to assist the Company in meeting its
present obligations as well as the obligation that will
result  from the proposed joint venture with Agora. The
Board of Directors and shareholders owning a majority of
stock have approved this action believing it to be in the
best interest of our shareholders and our best opportunity
to  improve the Company's current situation.

In just over one year, the Company has had four different
names, ticker symbols, Presidents and Boards of Directors.
Earlier this year, the Board was asked to consider a new
business plan for the Company, shifting focus away from
Phototek to again focus the Company in the Internet sector.
Considering all of the changes and instability that the
Company had experienced to date, as well as the
understandable lack of investor confidence and the
company's difficulty in securing funding, the Board decided
against this new direction. Mr. Marshall resigned as
President and Mr. Lopez was appointed President by the

KIWI: FAA Deal Gets Court Approval
Kiwi International Air Lines took another step Monday to
returning to the skies. U.S. Bankruptcy Judge Rosemary
Gambardella approved a deal struck last month  between the
carrier and the Federal Aviation Administration.

"With the court's approval in hand, we can now begin the
process to work with the FAA which will lead to the restart
of service," said Charles Stanziale, Kiwi's court-appointed

The airline, in debt and without planes or permission to
fly, will soon meet with FAA officials to begin a review
process. Stanziale did not specify a date.

Kiwi, based in Newark, N.J., has been grounded since March
24, a day after Kiwi entered bankruptcy for the second time
in its seven-year history. The FAA suddenly pulled Kiwi's
license, asserting that the carrier was unable to
fly its six-city schedule safely. Thousands of travelers
were left without flights or reservations.

The revocation derailed Kiwi's plans to be acquired for $3
million by Pan Am Airways, a former commercial airliner
that flies charters out of Portsmouth, N.H.

Kiwi laid off nearly all of its 500 workers and surrendered
its four leased jets, but won permission from the
bankruptcy judge to keep a skeleton staff in  place to
press its appeal of the revocation.

On April 17, just days before the appeal was to be heard by
the National Transportation Safety Board, the FAA changed
the revocation to a suspension and said it would assess no
fines or penalties.  The suspension could last up to four
months while the FAA completes a review, Kiwi has said.

Before being grounded, Kiwi served just Newark; Miami,
Orlando and Palm Beach, Fla.; and San Juan and Aguadilla,
Puerto Rico. It recently relinquished routes to Atlanta and

At its peak in the mid-'90s, Kiwi had 1,200 workers, and
they owned a controlling share of the airline, which had 15
leased jets. The founding pilots and flight attendants
named Kiwi for a flightless bird to symbolize how they had
lost their wings and jobs when Eastern and other  
carriers failed.

The employees lost their ownership stake when a Baltimore
surgeon, Dr. Charles C. Edwards, rescued Kiwi from its
first bankruptcy in July 1997 and invested a reported $21

LOGAN GENERAL: Gets Extension To File Plan
Logan General Hospital has been granted additional time to
file its bankruptcy reorganization plan. Judge Ronald G.
Pearson gave the hospital a 45-day extension Friday so it  
could formulate its plan. The plan would have been due

Logan General filed for Chapter 11 bankruptcy protection
last October after  missing payments on a $31 million bond
issue. Acting Logan General Chief Executive Officer Ted
Hatfield said the hospital asked for an extension so it can
complete the sale of Fountainplace Shopping Center in Logan
and other assets, including several land parcels and

The 132-bed hospital raised about $750,000 to pay off its
debts from auctioning off construction equipment and non-
medical-related real estate last month.  (WV Gazette Mail
Sunday - 05/02/99)

MONTGOMERY WARD: Summary of Treatment of Claims in Plan
            Description             Amount    Treatment     Recovery
Class       of Claims            of Claims    of Claims     Estimate
-----       -----------          ---------    ---------     --------
N/A         Professionals'     Unspecified    Cash within     100.0%
            Fee Claims                        90 days after
                                              the Effective

N/A         Administrative     Unspecified    Cash on the     100.0%
            Priority Claims                   Effective
                                              Date or as
                                              and when due

N/A         Priority           Unspecified    Deferred        100.0%
            Federal Tax                       payments
            Claims                            through the
                                              of the
                                              date with

N/A         Priority           $35,000,000    Deferred        100.0%
            Non-Federal                 to    payments
            Tax Claims         $40,000,000    through the
                                              of the
                                              date with

            Description             Amount    Treatment     Recovery
Class       of Claims            of Claims    of Claims     Estimate
-----       -----------          ---------    ---------     --------
MW 1        Claims (other               $0    Cash on the     100.0%
and         than                              Effective Date
Lechmere 1  Adminmistrative
            Claims and
            Priority Tax
            entitled to
            priority under
            11 U.S.C. Sec.

MW 2A       Secured Claims     $61,800,705    At the          100.0%
and         (other than an                    Proponents'
Lechmere 2A Intercompany                      Option (a)
            Claim or a Tax                    reinstated,
            Claim)                            or (b) paid
                                              in Cash on
                                              the Effective
                                              Date, or (c)
                                              delivery of
                                              or (d) as
                                              agreed to by
                                              and the

MW 2B       Secured Tax        $27,330,534    Cash on the     100.0%
and         Claims                            Effective
Lechmere 2B                                   Date or
                                               through the
                                                of the
                                            date with

            Description             Amount    Treatment     Recovery
Class       of Claims            of Claims    of Claims     Estimate
-----       -----------          ---------    ---------     --------
MW 3        Unsecured,     $2,202,000,000     On the           28.0%
and         non-priority               to     Effective          to
Lechmere 3  claims against $2,290,000,000     Date, Cash       29.0%
            the Debtors                       equal to a
            (other than                       Pro Rata
            Lechmere),                        share of the
            including GE                      $650,000,000
            Capital Trade                     pool (plus
            Claims against                    interest from
            Montgomery                        April 30,
            Ward, but                       1999, net of
            excluding GE                    expenses),
            Capital                           inclusive of
            Deposit                           the
            Claims, GE                        distributions
            Capital                         that would
            Non-Trade                       not be paid
            Claims, GE                      to holders of
            Capital Credit                  Allowed
            Card Claims,                   Lechmere
            and                            Class 3
            Intercompany                    Claims, on
            Claims                         the later of
                                           Date and the
                                          date such
                                          Claim becomes
                                          an Allowed MW
                                             Class 3

            Description             Amount  Treatment     Recovery
Class       of Claims            of Claims  of Claims     Estimate
-----       -----------          ---------  ---------     --------
Lechmere 3  Unsecured,         $67,000,000  On the           14.0%
            non-priority                to  Effective          to
            Claims against     $70,000,000  Date, Cash       14.5%
            Lechmere,                       equal to 50%
            including any                   of the amount
            GE Capital                      the holder of
            Trade Claims,                   such Claim
            but excluding                   would have
            GE Capital                      received as a
            Deposit                         holder of an
            Claims, GE                      Allowed Class
            Capital                         3 Unsecured
            Non-Trade                       Claim under
            Claims, GE                      the terms of
            Capital Credit                  this Plan
            Card Claims,                    from the
            Intercompany                    $650,000,000
            Claims, and                     pool (plus
            any Secondary                   interest from
            Liability                       April 30,
            Claims                          1999, net
                                            had such
                                            Claim been
                                            Ward and had
                                            Lechmere been

MW 4        GE Capital        $660,000,000  On the         Unknown
and         Non-Trade                   to  Effective
Lechmere 4  Claims,           $700,000,000  Date, (a) all
            excluding GE                    New LLC
            Capital Credit                  Interests and
            Card Claims                     all of the
            and GE Capital                  stock of the
            Deposit Claims                  New Retailer

            Description             Amount  Treatment     Recovery
Class       of Claims            of Claims  of Claims     Estimate
-----       -----------          ---------  ---------     --------
MW 5        Old MW Holding             N/A  Stock             N/A
            Preferred Stock                 interests
                                            that, if the
                                            Sale Event
                                            and the
                                            Pension Plan
                                            Event occur
                                            on or before
                                            January 1,
                                            200, the Old
                                            MW Holding
                                            Stock shall
                                            be converted
                                            into 389,962
                                            shares of
                                            Class B Old
                                            Common Stock
                                            in MW
                                            a 1,000:1
                                            reverse stock

Lechmere 5  Lechmere Bank   $1,058,700,000  Cash equal to     0.2%
            Guaranty                        a Pro Rata
            Claims,                         share of
            pursuant to                     $1,723,083.38,
            certain                         plus
            guaranties                      interest,
            dated as of                     held by The
            December 23,                    Bank of Nova
            1996                            Scotia as
                                            agent under
                                            the Credit

            Description             Amount  Treatment     Recovery
Class       of Claims            of Claims  of Claims     Estimate
-----       -----------          ---------  ---------     --------
MW 6        Old Common                 N/A  Pro Rata        $0.02
            Stock in MW                     share of          per
            Holding                         $71,000         Share
            interests held
            by Bernard F.
            Brennan and GE

Lechmere 6  Lechmere                        Canceled          0.0%
            Claims, being
            Claims of the
            pursuant to
            dated as of
            March 29, 1997

MW 7        Old Common                     Canceled          0.0%
            Stock Options
            in MW Holding

Lechmere 7  Lechmere Old                   Canceled          0.0%
            Common Stock

PALM SPRINGS GAMING: Plans Liquidation
Ontario, Calif.-based Palm Springs Gaming Corp., which had
planned to build an entertainment facility near the Palm
Springs Aerial Tramway, converted its chapter 11 filing to
chapter 7 after the company failed to obtain enough
signatures to establish a casino, according to The Business
Press. The company filed chapter 11 in Riverside, Calif. in
October, intending to reorganize and resume its plans for
the entertainment facility, the Odyssey Center. The company
paid American Petition Consultants $2 million to gather the
necessary 1.1 million signatures that would have revised
the state law to permit gambling at the site, but American
Petition backed out of the contract. Palm Springs Gaming
listed $4 million in assets and $4.4 million in liabilities
at the time of its filing, and the company owes roughly $3
million on deeds of trust for the 40 acres on which
it planned to build the entertainment facility.

PITTSBURGH PENGUINS: Possible Partner For Mario
A new potential partner for retired Mario Lemieux, flush
with cash from The Internet s World Wide Web, emerged
suddenly as a potential partner in Lemieux's bid to rescue
the Pittsburgh Penguins.

Lemieux met yesterday with the brother and lawyer for chairman Mark Cuban in talks that were
described by Cuban's brother Brian as productive. is about to be sold to Yahoo! for more than
$6 billion.

Lemieux also met with the owners of the Pittsburgh Civic
Arena yesterday with the fate of the Penguins hanging in
the balance. At issue is the renegotiation of a lease with
Spectacor Management Group Inc. that is costing the
bankrupt Pens $7 million per, compared to far more
favorable leases enjoyed by other professional sports
franchises in the Steel City.

We had a good exchange of information, said Lemieux's
attorney.  SMG's lawyer confirmed Lemieux and Spectacor
will meet again.  Meanwhile, deliberations concerning the
fate of the Pittsburgh NHL franchise continue today in
United States Bankruptcy Court.(Interactive Sports -

RAND ENERGY: Order For Limited Use of Cash Collateral
The US Bankruptcy Court for the Northern District of Texas,
Dallas Division, entered a sixth agreed order authorizing
the debtor, Rand Energy Company to use the cash collateral
of Bank One, Texas, NA on a limited basis in accordance
with the terms and conditions of the order.

The debtor agrees that as of the Petition Date the lender
holds a valid claim against the debtor in the aggregate
principal amount of not less than $18.9 million.  The
debtors estimate a use of $1.4 million for the month of
April and ending cash of $7.17 million.

SGL CARBON: Business Bottomed Out; Recovery Expected
SGL CARBON reports that during February 1999, the operating
business of SGL CARBON (NYSE: SGG) bottomed out.  January
and February, as already communicated and expected, still
showed effects from the Asian crisis and subsequent
economic slowdown. With Group sales of DM 411 million (-13%
compared to last quarter) and an operating result of DM 18
million, the low point was reached.  Since March and April
sales have picked up and order income levels are
increasing, SGL CARBON is confident that the second quarter
will show considerable improvement.

In the US graphite electrode business, SGL CARBON has
recorded initial success in our drive to become the quality
leader for the quality- and service-oriented growth area of
large-volume graphite electrodes.  New accounts were won
thanks to the improved product quality.  In the second half
of 1999, rationalization measures are expected to produce
cost savings of around DM 30 million announced for 1999.  
As the steel industry gradually recovers, we expect global
graphite electrode consumption to return to its long-term
growth trend of c. 1-2% per annum.

SGL CARBON sees also positive impetus for the future coming
from the further development of our fuel cell components
and our carbon-fiber based composites for high-performance
brake discs.

Group sales in the first quarter of 1999 reached a low
point at DM411 million.  In comparable terms, i.e. without
the integration of HAW LININGS, decline actually amounted
to -15%.  However, March saw our core business,  
graphite electrodes, pick up considerably, following
extremely weak sales in January and February due to
destocking and a reluctance to order on the part of
our customers.  Thus, it seems that the sudden recession in
the European and North American electric steel industry
starting in Q4 1998, which was due to the Asian crisis, is
continuing to stabilize.

Due to the extremely low sales in the first two months of
1999, the comparable operating result (without DM 90
million restructuring charge) as against the previous
quarter declined to DM 18 million.  The fact that the  
quarterly result was produced almost entirely in March
points to a turnaround.  Cost savings from the accelerated
restructuring program are not included in this figure, and
are expected for the second half of the year.

The financial and extraordinary result improved from DM -25
million (including costs for early repayment of DM 150
million Exchangeable Bond) the previous quarter to DM -12
million.  Earnings before taxes amounted to DM 6 million.  
As  a result of profits made in overseas countries, Group-
wide corporate taxes amounted to DM -5 million, thus
producing earnings after tax of DM 1 million.  DVFA/SG
earnings per share thus amounted to DM 0.20.

SGL CARBON: Settles Antitrust Case
SGL CARBON AG (NYSE: SGG) announced that it has entered
into plea agreements, settling the antitrust investigation
by the United States Department of Justice (DoJ) regarding  
graphite electrodes.  As a result, the Company will pay a
total fine of US-$145 million, made up by US-$ 135 million
for the Company and US-$ 10 million, respectively, for the
Chairman of the Board of Management, Robert J. Koehler.   
As a consequence, the DoJ has agreed not to take any action
against any of the Company's other employees in connection
with any related charges.  With these agreements, the DoJ
has concluded its investigation into the business
activities of SGL CARBON AG and its subsidiaries.

The amount of US-$ 145 million will be payable in six
annual installments interest-free.  As a result, the net
present value of the agreements is significantly below the
nominal value and improves the cash flow position  

The Company stated that it has agreed to this settlement
with the U.S. authorities in order to resolve nearly two
years of antitrust investigations and to avoid potentially
lengthy litigation with further burdens on its  
employees and business.  Also, the Supervisory Board who
has been closely monitoring these developments, fully
supports this decision on the grounds that it is in the
best interest of the entire company, its shareholders and
all its employees and it allows to refocus full attention
and resources on its businesses.

With regard to the civil proceedings in North America,
further progress has been made.  The Company confirmed
today that settlements have been reached with all
plaintiffs in Canada over the past two weeks.  After
reaching additional agreements in the past weeks, SGL
CARBON has now also settled a significant number of
outstanding claims in the USA.

With regard to the remaining open cases in the USA with the
class action and a group of plaintiffs, the U.S. subsidiary
SGL CARBON Corporation filed a voluntary petition under
Chapter 11 on December 16, 1998, in order to protect  
itself against unreasonable demands.  On April 23, 1999,
the judge responsible for the Chapter 11 proceedings denied
a motion to dismiss the case.  Following this development
SGL CARBON is still committed to pursuing an expeditious
and  amicable resolution to these pending cases.

With all these developments and since net present value
calculations cannot be considered in the formation of
reserves according to German accounting principles, SGL
CARBON decided to review the existing reserve of DM 410
million taken approximately a year ago.  This became
necessary mainly due to the insufficient reserve for the
DoJ fine, but also because of the recent agreement
with the Canadian plaintiffs and an updated assessment of
all remaining risks including those outside the USA.  As a
result, the overall reserve will be increased by DM 125
million and booked in the second quarter of 1999.

With these agreements SGL CARBON has put behind it major
parts of the antitrust case and is committed to conclude
the remaining parts as soon as possible.

SGSM ACQUISITION: Seeks OK To Return Inventory For Credit
The debtor, SGSM Acquisition Company, LLC seeks court
authority to return product and inventory to vendors for
credit against such vendors' prepetition claims.

The debtor relies on the return of magazines and newspapers
and pharmaceutical products in establishing inventory
levels and stocking its shelves.  The debtor states that an
order approving the return of merchandise contemplated
herein is in the best interest of the debtor's estate
because it will enable the debtor to receive value from
otherwise valueless inventory.

SOWERS PRINTING: Files Chapter 11
Sowers Printing of Lebanon, Pa., a printing company founded
117 years ago, filed chapter 11 last week in the U.S.
Bankruptcy Court for the Middle District of Pennsylvania in
Harrisburg, according to The Patriot News. The company,
which prints catalogs, magazines, study books, directories
and promotional materials for clients in New York, New
Jersey and Central and Eastern Pennsylvania, says its
financial strength was compromised in the wake of the loss
of its sales force and roughly half of its customer service
representatives, who left when company president Geoffrey
Sowers, grandson of one of its founders, was planning his
retirement. Sowers said the company plans to reorganize,
and said he sees "encouraging signs of a full recovery."
(ABI 04-May-99)

SUN HEALTHCARE: S&P Lowers Rating on Securities
Standard & Poor's today lowered its rating on Sun Financing
I's $345 million 7% convertible trust issued preferred
securities  (guaranteed by Sun Healthcare Group Inc.) to
'D' from single-'C'. The rating is removed from

At the same time, Standard & Poor's lowered its corporate
credit and bank loan ratings for Sun Healthcare Group Inc.
to double- 'C' from triple-'C'. The subordinated debt
rating was also lowered to single-'C' from double-'C'.
These ratings remain on CreditWatch with negative
implications, where they were placed Feb. 2, 1999.

Standard & Poor's lowered its rating on the 7% convertible
trust issued preferred securities to 'D' because the
dividend payment due May 1, 1999 was deferred.  Although
the company has exercised its right to defer the preferred  
dividend payment, Standard & Poor's policy is that a
deferred payment on preferred stock is a default on timely
payment. The missed dividend payment, however, does not
trigger cross defaults on other debt.

The company also announced that it is delaying payment of
interest on its $150 million 9.375% subordinated notes due
2008 that was due May 1, 1999.  If payment is not made
within the 30 day grace period, Standard & Poor's expects
to lower its ratings on Sun Healthcare Group to 'D'.  

THE PENN TRAFFIC: Seeks More Time To Assume/Reject Leases
The debtors, The Penn Traffic Company, et al., seek an
extension of time within which the debtors shall assume or
reject unexpired leases of nonresidential real property.

The debtors are currently parties to approximately 265
unexpired nonresidential real property leases.  The debtors
seek entry of an order extending the time in which they
must assume or reject the unexpired leases to the earlier
of the Effective Date or June 29, 1999.    The debtors
assert that these cases are large and complex.  The debtors
need more time to analyze each remaining store location and
their businesses as a whole to determine if the unexpired
leases are necessary for the debtors' reorganization.  The
debtors have already rejected 26 leases.  The debtors
anticipate that they will have made their decisions as to
whether to assume or reject the unexpired leases on or
before the Confirmation Date.  


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S U B S C R I P T I O N   I N F O R M A T I O N     
Troubled Company Reporter is a daily newsletter, co-
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Debra Brennan and Lexy Mueller, Editors. Copyright 1999.  
All rights reserved.  ISSN 1520-9474.  

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