TCR_Public/990517.MBX T R O U B L E D   C O M P A N Y   R E P O R T E R
     Monday, May 17, 1999, Vol. 3, No. 94


AMERITRUCK: Seeks To Reject Five Leases
ARROW AUTOMOTIVE: Seeks Authority For Sale of Inventory
AUTOINFO: Announces First Quarter 1999 Results
CODED COMMUNICATIONS: Seeks Authority for Sale
CRIIMI MAE: First Quarter Results

EIP MICROWAVE: Case Summary & 20 Largest Creditors
FIRSTPLUS FINANCIAL: Committee Taps Lain Faulkner
GENEVA STEEL: Seeks Extension of Exclusivity
GOLDEN BOOKS: Disclosure Statement Gets Approved

LEASING SOLUTIONS: Preliminary 1998 Financial Results
LOT$OFF: Creditors Agree To Withdraw Bankruptcy Petition
MANHATTAN BAGEL: Creditors' Committee Seeks Trustee
PARAGON TRADE: Court Order On Waiver of Privilege
PARAGON TRADE: Files Reexamination With Patent Office

PETSEC ENERGY: Reports First Quarter Loss
PHILIP SERVICES: First Quarter Results
PHONETEL: Seeks Acceptance of Plan
PITTSBURGH PENGUINS: Lemieux Hires Zolfo Cooper
SGL CARBON : Bloomberg Seeks To Unseal Court Records

SEARCH FINANCIAL: Evans Seeks To Enforce Agreement
SERVICE MERCHANDISE: Broadens Internet Possibilities
SMITH CORONA: Reports Third-Quarter Financial Results
STUDIO MAGIC: Canadian Firm Avoids Bankruptcy
TELEGROUP: Cygnus Seeks Relief From Stay

THORN APPLE: Committee Seeks To Terminate Exclusivity
THORN APPLE: Restructures Sales Staff             
VENCOR INC: $19 Million Rental Due, Obtains Extension
WESTMINSTER CAPITAL: Reports First Quarter Results
WILSHIRE: Returns to Profitability in First Quarter


AMERITRUCK: Seeks To Reject Five Leases
The debtors, AmeriTruck Distribution Corp., et al., seek to
reject five (5)leases or subleases of nonresidential
property under which the debtors are lessees or sublessees.  
A hearing is set for this motion for May 18, 1999 at 1:45
PM in the courtroom of the Honorable Harold C. Abramson, US
Bankruptcy Judge, 1100 Commerce Street, 14th Floor, Dallas,
Texas 75242.

The debtors have implemented a program of contraction and
consolidation of their business including their liquidation
of their refrigerated trucking business. In the course of
the consolidation the debtors have determined that five
leases or subleases of nonresidential real property should
be rejected.  The debtors have no further use for these  
properties.  The leases pertain to facilities located at
Route 706, Wyalusing, PA; 3333 E. Bougainvillea, Tampa, FL;
9000 Empire Connector Drive, Florence, KY; and 1520
Terminal street, West Sacramento, CA.

ARROW AUTOMOTIVE: Seeks Authority For Sale of Inventory
Arrow Automotive Industries, Inc. seeks entry of an order
authorizing and approving the proposed sale of the debtor's
on-hand inventory.  The debtor seeks to sell the assets to
BPS Cores, Inc. for a total cash purchase price of $1.75
million.  The debtor believes that the proposed private
sale of the assets rather than a public auction is in the
best interest of the estate and the creditors.  An attempt
to sell the assets through a public sale or sales would
raise significant logistical problems that could depress
the estate's recovery.  The assets are made up of thousands
of inventory pieces located in four locations in two
states.  Any attempt to consolidate the assets in a single
location for a public sale would be prohibitively expensive
and result in material delay.  The debtor believes that the
proposed purchase price is fair and reasonable and appears
to represent a premium above the market value of the

AUTOINFO: Announces First Quarter 1999 Results
AutoInfo, Inc. (OTC BB:AUTO) announced results of its
operations for the first quarter ended March 31, 1999.

The Company reported revenues of approximately $36,000 and
a net loss of $480,000, or $.06 per share, as compared with
revenues of $25,000 and a net loss of $569,000, or $.07 per
share, for the quarter ended March 31, 1998, which included
a loss from discontinued operations of $186,000. During
1998, the Company ceased to operate as an automobile
finance company. In January 1999, the Company's wholly-
owned non-prime automobile subsidiary filed a voluntary
petition under Chapter 7 of the United States Bankruptcy
Code. Accordingly, the net liabilities of this subsidiary
have been reclassified as Investment in and advances to
subsidiary subject to compromise as they may be affected by
the outcome of this bankruptcy filing. Accordingly, the
results of  operations for its non-prime automobile
operations have been reclassified as  discontinued
operations for the period ended March 31, 1998.

At March 31, 1999, the Company had cash and short term
investments of approximately $1.4 million.

William Wunderlich, President and Chief Financial Officer
of AutoInfo, stated, "We are continuing to work toward
the  further restructuring of our remaining debt. We have a
tax loss carryforward of approximately $27 million and are
seeking a transaction that will maximize the  benefit of
this asset and enable us to begin to rebuild shareholder

However, based upon the Company's poor financial condition,
the are no assurances that the Company will be able to
continue as a going concern.

CODED COMMUNICATIONS: Seeks Authority for Sale
Michael B. Joseph, the acting Chapter 7 trustee for the
estates of Coded Communications Corporation, Coded Mobile
Communications, Inc. and Decom Systems, Inc. is seeking a
court order authorizing the Trustee to sell substantially
all of the debtors' assets to GMSI, Inc. and Integrated
Management Solutions, Inc. for $800,000.

CRIIMI MAE: First Quarter Results
CRIIMI MAE Inc. (NYSE: CMM), reported results for
the first  quarter ended March 31, 1999, including higher
tax basis income for the period  compared to last year's
first quarter. Tax basis income to common shareholders  
increased 30 percent from the first quarter of 1998 to
1999.  Tax basis income, on a per share basis, increased
from 34 cents per share in 1998 to 37 cents per  share in
1999.  The company also reported a higher net interest
margin under  both generally accepted accounting principles
(GAAP) and on a tax basis.  GAAP  net income increased by
approximately $1.2 million, or 9.5 percent, from the  prior
year's first quarter, though net earnings per basic share
declined by  four cents due to the increase in the number
of shares outstanding.  GAAP net income for the first
quarter of 1999 included $5.5 million of reorganization  
expenses and $3.9 million of unrealized gains related to
its mortgage warehouse  purchase obligation.

CRIIMI MAE's shareholders' equity increased to
approximately $313 million ($4.83 per fully diluted share)
at quarter end, from approximately $308 million
($4.89 per fully diluted share) at December 31, 1998.  The
increase in shareholders' equity at March 31, 1999
consisted of $13.4 million in undistributed net income,
partially offset by a decrease in the fair value of  
securities of $8.7 million. As part of determining
shareholders' equity, the company calculated the estimated
fair market value of its portfolio of subordinated
commercial mortgage-backed securities (CMBS) using a
discounted cash flow method typically used in the
marketplace.  The company discounted its estimated cash
flow using a discount rate that in its view was
commensurate with the market's perception of risk and
value.  The company used a variety of information sources
to determine its discount rates including institutionally  
available research reports and communications with dealers
and active investors.

Under GAAP, the net interest margin increased by 31
percent, or approximately $4.7 million, to approximately
$19.8 million for the first quarter of this year
from approximately $15.1 million for last year's first
quarter.  The net interest margin increase was due
principally to an increase in CRIIMI MAE's holdings of
subordinated CMBS.

Net income available to common shareholders for the first
quarter was approximately $13.4 million (25 cents per basic
share), compared with approximately $12.3 million (29 cents
per basic share) for last year's first quarter.  This
year's first quarter included reorganization expenses of  
approximately $5.5 million and unrealized gains of
approximately $3.9 million on commitments related to the
company's mortgage warehouse purchase obligation.

Tax basis earnings available to common shareholders were
$19.6 million, up 30 percent from $15.0 million for the
prior year's first quarter. The increases in tax basis
earnings and net interest margin during the first quarter
of 1999 were primarily due to CRIIMI MAE's increased
portfolio of subordinated CMBS and, to a lesser extent,
earnings from the securitization of originated
loans. On a per share basis, tax basis earnings available
to common shareholders increased by three cents, to 37
cents from 34 cents.

After receiving initial proposals for equity investments by
institutional investors last month, CRIIMI MAE said that
within the next few weeks it expects to receive final
proposals that would be part of its plan of reorganization.  
A recently formed Special Reorganization Committee,
composed of the four outside members of the Board of
Directors, will evaluate the proposals.  The Committee is
also overseeing the ongoing development of the entire plan
of reorganization under which the company could emerge from
Chapter 11.

The company anticipates filing a reorganization plan by
August 2, 1999, which is the conclusion of the period
during which CRIIMI MAE Inc. and two affiliates have the
exclusive right to file a reorganization plan with the

EIP MICROWAVE: Case Summary & 20 Largest Creditors
Debtor: EIP Microwave, Inc.
109 Bonaventure
San Jose, CA 95134

Court: Northern District of California

Case No.: 99-53102    Filed: 05/03/99    Chapter: 11

Debtor's Counsel:  

Todd C. Ringstad
4 Park Plaza, 16th floor
Irvine, California 92614
(949) 857-7450                 
20 Largest Unsecured Creditors:

   Name                              Nature         Amount
   ----                              ------         ------
Cutler, Jim              term note plus int.       508,750
Platinum Software Corp.  Consulting Services       142,000
Cascade Microwave           Convertible note       200,000
Bainbridge Group              Legal Services        93,252
Resources Connection LLC Consulting services        85,756
Aerotek, Inc.                     Trade Debt        64,301
MAI Industries, Inc.      Leasehold Improve.        60,979
Fibres International              Trade Debt        48,468
Accountants on Call      Consulting Services        40,095
Works Systems SMBH                Trade Debt        33,900
Electronic Resources, Inc.        Trade Debt        33,822
Thomas Lovato Co.                 Trade Debt        32,463
Mahal, Charanbir S.            Wages and PTO        30,385
Oak Frequency Control             Trade Debt        26,219
DCI Inc.                          Trade Debt        24,303
Wodiske, Ernest          Consulting Services        23,460
Hunter Technology                 Trade Debt        22,915
BDO Seidman LLP          Accounting Services        22,818
AT&T                              Trade Debt        21,448
Design Masters           Consulting Services        20,756

FIRSTPLUS FINANCIAL: Committee Taps Lain Faulkner
The Official Unsecured Creditors' Committee of Firstplus
Financial Inc. and Firstplus Special Funding Corp. seeks
authority to employ and retain Lain Faulkner & Co. as
accountants for the Committee.  A hearing to consider the
application has been set for May 21, 1999 at 2:00 PM.

GENEVA STEEL: Seeks Extension of Exclusivity
The debtor, Geneva Steel Company seeks an order extending
the exclusive periods during which the debtor may file a
plan of reorganization to August 31, 1999 and an extension
of the period within which the debtor has the exclusive
right to solicit acceptances to November 1, 1999.  

The debtor reviews its progress in its Chapter 11 case.  
Liquidity has been a critical issue for the debtor.  After
the DIP facility was in place the debtor was required to
devote a substantial amount of time to maximize the
borrowing availability under the facility.  The debtor has
had two meetings with Bondholder Committee representatives
during which reorganization plan concepts were discussed.  
The debtor has also discussed plan concepts with Creditors'
Committee counsel and has begun drafting portions of a
disclosure statement and plan document.  The debtor and its
financial advisors have been developing a long-term
operating and financial business plan.  Termination of the
exclusivity periods may signal to vendors, customers and
employees loss of confidence in the debtor and its
reorganization efforts; and the debtor believes this would
severely undermine the debtor's business operations and the
successes achieved to date.  In addition it would create
serious distractions for management.  The debtor believes
that there exists reason for optimism about the steel
market, and that market conditions will permit Geneva to
emerge from Chapter 11 prior to year-end.

GOLDEN BOOKS: Disclosure Statement Gets Approved
Golden Books Family Entertainment Inc. won court approval
of the disclosure statement following a hearing Monday,
according to a spokesman for the children's book publisher.
There were no objections to the disclosure statement and
only minor modifications were made to the document after
the hearing. A reorganization plan confirmation hearing
likely would be in July but has not yet been scheduled.
(The Daily Bankruptcy Review and ABI Copyright c May 14,

Harvard Industries Inc., an auto-parts supplier to Ford
Motor Co. and General Motors Corp., may sell a unit that
makes molded rubber seals to reduce its debt and raise
money for acquisitions. Harvard Industries hired Lehman  
Bros. to advise the company on alternatives such as the
sale of its Kingston-Warren subsidiary, which also makes
weather stripping and plastic seals. Kingston-Warren, based
in Newfields, N.H., has 1,300 employees and generated  
about $140 million of the company's 1998 revenue of $690
million. The company said it identified possible businesses
to buy as it seeks to bolster its units that supply parts
for aerospace-and construction-equipment makers. Harvard  
Industries, which has about $70 million in debt, emerged
from Chapter 11 bankruptcy reorganization in late November.
(Record New Jersey -05/13/99)

LEASING SOLUTIONS: Preliminary 1998 Financial Results
Leasing Solutions, Inc. (NYSE:LSN) announced preliminary,
unaudited financial results for the fourth quarter and full
year 1998.

The company also provided an update regarding a forbearance
agreement with its lenders.

For the three months ended Dec. 31, 1998, Leasing Solutions
expects to post revenues of approximately $79 million,
compared to $64 million reported for the same period in
1997. However, the company estimates a net loss of
approximately  $(58) million for the quarter, compared to
$4.1 million in net income for fourth quarter 1997.

For the twelve months ended Dec. 31, 1998, Leasing
Solutions expects to report revenues of approximately $299
million, compared to $225 million in 1997. The company also
estimates a net loss of approximately $(53) million for the
full year 1998, compared to net income of $13.1 million in

Leasing Solutions notes that these expected financial
results for fourth quarter and full year 1998 (as well as
the detail provided in the following background section)
are unaudited and preliminary and may change, and are  
subject to final review by the company's outside auditors.

Leasing Solutions continues to negotiate with its senior
lenders regarding payment defaults and other related
matters, including a three-month forbearance  agreement.

Based on current limitations of financing, the company has
suspended new operating lease financing activity in the
U.S. Any future operating lease business will be dependent
on the company's ability to finance such business.

LOT$OFF: Creditors Agree To Withdraw Bankruptcy Petition
San Antonio-based LOT$OFF Corporation (OTC BB:LOTS)
announced today that certain trade creditors have
agreed to withdraw their involuntary bankruptcy petition
against the Company.

Such nine creditors alleged claims totaling $1,318,547.05
against the Company in their petition filed April 8, 1999,
in the United States Bankruptcy Court for the Western
District of Texas, San Antonio Division. The Company had  
planned to contest the involuntary filing at a Court
hearing on May 18, 1999, and had filed a counter-claim
against the petitioning creditors. The Company and the
petitioning creditors have agreed to the dismissal of both
the involuntary petition and the counter-claim and will
attempt to work out their differences out-of-court. In this
regard, the Company and its retail subsidiaries have agreed
to the setting up of an ad hoc committee of 24 trade  
creditors, including the nine petitioning creditors, to
attempt to resolve  disputes between trade creditors and
the Company and its subsidiaries.

LOT$OFF Corporation, which had been pursuing the merger or
sale of all or a part of the Company's retail subsidiaries,
announced on Jan. 21, 1999, that it planned to accelerate
the sale of its retail assets.

While an event of default occurred and is continuing under
the Company's revolving credit facility with General
Electric Capital Corporation and under its Senior
Subordinated Notes, GECC has been providing limited working
capital to the retail subsidiaries to effect the sale
discussed above.

The initial sales, in-store inventories, began, with the
counsel of Universal Capital Group LLC, in the retail
subsidiaries' 47 stores Jan. 27, 1999. After 14 weeks of
inventory clearance sales, LOT$OFF's retail subsidiaries
have consolidated inventories into five Texas stores and,
with the support of GECC and the continuing counsel of
Universal, are currently augmenting such inventories with
new product to enhance recoveries. Certain store leases
have been assigned, and others have been terminated.
Negotiations continue with landlords and potential
assignees with respect to remaining store leases and with
potential purchasers of other assets, principally furniture
and fixtures.

As previously reported, on Dec. 4, 1997, a court entered a
judgment against Chase in the Company's favor for
$148,575,000 plus costs of court and post-judgment interest
at 5.42% from Dec. 4, 1997. Subsequently, Chase filed five  
post-judgment motions with the court, and, on Feb. 23,
1998, the court, having considered such motions, the
supplements to such motions, the response of the  Company
to such motions and the entire record in the cause, denied
all of Chase's post-judgment motions. Chase appealed the
judgment entered by the court to the Fifth Circuit Court of
Appeals in New Orleans.  

MANHATTAN BAGEL: Creditors' Committee Seeks Trustee
The Official Unsecured Creditors' Committee of Manhattan
Bagel company, Inc. submits an application for a court
order approving the appointment of Donald F. Conway as the
Trustee of the Manhattan Bagel Unsecured Creditor Trust in
order to settle and reconcile claims and administer assets
of the Trust.

PARAGON TRADE: Court Order On Waiver of Privilege
The Official Committee of the Equity Security Holders of
Paragon Trade Brands, Inc. asked that the court order the
Proctor & Gamble Company ("P&G")to produce all privileged
documents and communications relating to the subject matter
of debtor's motion to approve its settlement with P&G.  The
Equity Committee contends that in the course of P&G's
briefing and testimony in connection with the Settlement
Motion, P&G impliedly waived the attorney-client privilege
as to those matters.  P&G opposes the Equity Committee's
request.  The Equity Committee seeks to undertake discovery
to obtain what would otherwise be privileged documents and
communications relating to the Appeal, the Contempt Motion,
and the P&G proof of claim.

The Equity Committee contends that the implied waiver
occurred because P&G "injected" the issue of its
probability of success against the debtor into the
litigation of the settlement motion.

The court found that, "the Equity Committee's attorney may
have led P&G close to the line between the privilege and
its waiver but P&G did not cross it this time."    The
request to produce all privileged document and
communications relating the debtor's motion to approve its
settlement with P&G is denied.

PARAGON TRADE: Files Reexamination With Patent Office
The Official Committee of Equity Security Holders of
Paragon Trade Brands, Inc. filed a Reexamination Request
with the US Patent and Trademark Office for a patent owned
by the Procter & Gamble Company.

The Committee asserts that it is clear that the newly
identified prior art in question renders the alleged
invention of the patent in controversy unpatentable, and
establishes a substantial question of patentability with
respect to the claims underpinning the judgment against
Paragon Trade.

The Committee presents a chart evidencing the similarities
of the P&G patent with a certain Japanese patent in order
to prove the unpatentability of the patent in question,
which patent covers the design of the cuff of disposable

PETSEC ENERGY: Reports First Quarter Loss
Petsec Energy, an independent oil and gas exploration and
production company, announced an after tax net loss for the
quarter ended March 31, 1999 as US$5.8 million, as compared
to a net loss for the same period last year of US$8.9
million.  In American Depositary Receipts this compares to
a net loss in 1999 ADR of US$ .27 over the net loss in 1998
of US$ .41 per ADR.  Petsec Energy's head office is in
Sydney, Australia, while its operation is in the offshore
Gulf of Mexico, based in Lafayette, Louisiana.  No wells
were drilled in the first quarter of 1999 but the company
states it expects to commence drilling this quarter.
The company was the high bidder for two leases at the OCS
Central Gulf of Mexico Lease Sale in March 1999.  A sole
bid of US$1.7 million on Vermilion 258 was successful, and
a joint bid with Coastal Corp. for West Delta 113
was also successful.  Petsec's share of the latter bid was
US$0.3 million.  The leases are expected to be awarded
within the next two months.  Petsec indicated it's first
quarter poor showing was due to the sale, effective January
1, 1999, of a 50% working interest in seventeen
production leases and six exploration leases.  Normal
decline over the same first quarter period accounted for
additional losses.  On February 1, 1999 Petsec finalized
the sale of the above interests to Apache Corp. for
US $68.3 million.  The proceeds were used to repay bank

PHILIP SERVICES: First Quarter Results
Philip Services Corp. (TSE/ME: PHV) announced its financial
results for the first quarter ended March 31, 1999.  All
currency figures are stated in US dollars.

Allen Fracassi, interim Chief Executive Officer said,
"Since the end of the first quarter, we have executed a
lock-up agreement with our secured lenders and are moving
ahead with a plan of reorganization that will ensure
business as usual throughout our financial restructuring.

Revenue for the first quarter of 1999 was $169 million less
than the revenue reported in the same period in 1998. The
Industrial Services Group revenue for the first quarter of
1999 was $280.4 million, compared with revenue of $286.8  
million in the first quarter of 1998. The Metals Services
Group revenue for the first quarter of 1999 was $98.6
million, compared with $260.9 for the first quarter in
1998.  The decrease in revenue from the metals operations
was  primarily attributable to the sale of the Company's
steel distribution business in July 1998 and a 35 percent
drop in ferrous scrap average selling prices in the first
quarter of 1998. Income from operations (before corporate
expenses) was $2.2 million in the first quarter of 1999
compared with income of $25.9 million in the first  
quarter of 1998.

PHONETEL: Seeks Acceptance of Plan
PhoneTel Technologies Inc., Cleveland, announced that it
has begun solicitation of acceptances of its pre-packaged
reorganization plan from holders of its 12 percent Senior
Notes due 2006 and holders of its 14 percent Cumulative
Redeemable Convertible Preferred Stock, according to a
newswire report. The terms of the pre-packaged plan are
summarized in the disclosure statement mailed on May 11 to
holders of record as of April 23. The voting deadline is
June 11. Under the plain, the claims of employees, trade
and certain other creditors, other than senior note claims,
would be paid in full in the ordinary course, with the
company retaining its rights and defense with respect to
such claims. (ABI 14-May-99)

PITTSBURGH PENGUINS: Lemieux Hires Zolfo Cooper
Former Pittsburgh Penguin star Mario Lemieux announced
yesterday that he hired Leonard LoBiondo of Zolfo Cooper,
New York City, to work on his reorganization plan for the
Pittsburgh Penguins franchise, which filed chapter 11 last
year, The Pittsburgh Post-Gazette reported. LoBiondo's
mission will be to examine team finances to determine
whether the Penguins can be viable in Pittsburgh, said
attorney Robert G. Sable of Sable, Makoroff & Gusky P.C.,
Pittsburgh. Sable said LoBiondo's input will add
credibility in the financial world if he thinks the team
can succeed. Separately, Mayor Murphy and Allegheny County
Commissioners Mike Dawida and Bob Cranmer yesterday said
they would not consider a new arena for the team until its
finances are in order. "Discussions or assurances of a new
arena should not be a part of any negotiations at this
point," they said in a statement. So reorganization
plans for the team will be required to demonstrate that the
team can return to profitability at its 38-year-old Civic
Arena, the oldest facility in the National Hockey League.
(ABI 14-May-99)

SGL CARBON : Bloomberg Seeks To Unseal Court Records
Bloomberg News, a division of Bloomberg LP filed a motion
to intervene in the case of SGL Carbon and unseal the court
record.  Bloomberg argues that there is significant public
interest in disclosure in this case, due to collusive
activities in the industry.  Bloomberg asserts that it does
not seek access to documents containing trade secrets or
truly proprietary information.  It seeks access to
information which may explain the activities of the parties
in this case.  Bloomberg asserts that unless the Creditors'
Committee in this case can show with articulated and
factually supported particularity that a certain sealed
Docket puts them at a competitive disadvantage by releasing
bona fide trade secrets, or contains truly scandalous and
defamatory material within the meaning of the Bankruptcy
Code, "then the record in this case must be open to the

SEARCH FINANCIAL: Evans Seeks To Enforce Agreement
George Evans filed a motion to enforce an employment
agreement between Evans and Search Capital Group, Inc.
referencing the employment of Evans as President, CEO and
member of the Board of Directors.   Evans filed an amended
proof of claim for an unsecured nonpriority claim of
$1,098,000 plus attorney fees. A hearing to consider the
motion is scheduled for May 14, 1999 at 9:30 AM, US
Bankruptcy Court, 1100 Commerce Street, 14th Floor, Dallas,
Texas 75242.

SERVICE MERCHANDISE: Broadens Internet Possibilities
The Tennessean reports on May 11, 1999 that in a move to
put greater focus on the business potential of the
Internet, retailer Service Merchandise Co. Inc. is creating
an electronic commerce division.

David Seifert, former senior vice president of B.A. Pargh,
a Service Merchandise subsidiary selling office supplies
and equipment to businesses, has been promoted to the
position of vice president of e-commerce, assuming
responsibility for the division.

The new area will incorporate the company's Web-page sales,
mail-order call center operations, fulfillment department
and commercial sales, as well as B.A. Pargh.

The creation of the e-commerce division comes at a time
when the company is restructuring under the protection of
Chapter 11 bankruptcy laws. The company, which had $3.2
billion in net revenues in 1998, filed its bankruptcy
petition in March.

Service Merchandise's Web site currently includes an online
catalog, gift registry, store locator and information on
sales and events.

SMITH CORONA: Reports Third-Quarter Financial Results
Smith Corona Corp. (NASDAQ:SCCO) announced its financial
results for the third quarter ended March 31, 1999.

The company reported a net loss of $4.6 million, or $1.51
per share, on sales of $11.9 million, a 27 percent
improvement in performance from its second-quarter net loss
of $6.3 million, or $2.10 per share. For the third quarter  
last year, the company reported a net loss of $2.9 million,
or $1.04 per share, on sales of $15.1 million.

For the nine months ended March 31, 1999, Smith Corona
reported a net loss of $16.5 million, or $5.51 per share,
on sales of $35.8 million compared with a loss of $2.2
million, or $0.81 per share, on sales of $46.9 million for
the same period last year.

Results this year included nonrecurring restructuring
expense of $1.3 million, while last year's results included
a $3.7 million gain from the sale of the  manufacturing
facility and a $.5 million extraordinary gain from the
company's  financial reorganization.

Sales declines were partially offset by newly sourced
product sales of $2.1 million and $5.7 million for the
three and nine months respectively, compared with new-
product sales of $1.5 million and $2.0 million for the same
periods last year.

Gross margin improvement is anticipated in the fourth
quarter as a result of two nonrecurring actions affecting
the three- and nine-month periods: the successful
elimination of negative margin inventories and the
recording of retroactive price increases related to the
core products procurement contract.

"While we will continue to make improvements in our
company, we began to turn the corner in the third quarter,"
stated John A. Bermingham, president and chief executive
officer of Smith Corona.

"The company's cash position was positively affected by
third-quarter sales of excess telephony and facsimile
product inventories and an additional $2.0 million boost in
April from the sale of the company's former plant. With the  
reductions in operating expense achieved due to our
restructuring program, we believe that Smith Corona is
making real progress on the road back to  profitability."

Bermingham also noted positive shifts in the company's core
typewriter business. "Industry data indicates that the
sales decline in worldwide typewriter markets, which has
been steep for the past several years, is now leveling off
and remains a substantial worldwide business. This trend
and Smith Corona's historical success in its core business
have supported our current refocus on our typewriter
business," he said.

STUDIO MAGIC: Canadian Firm Avoids Bankruptcy
Business Press Ontario CA reports on May 10, 1999 that  
Studio Magic, a video production company in Temecula, has
dropped its bankruptcy proceedings following several
financial moves that eased its short-term cash problems.

"We've got the problem covered," said Brian Padberg,
company president. "We've revised arrangements with a
landlord and two suppliers and are working on new

Additionally, Studio Magic is negotiating with private
investors who will take an equity position in the company,
Padberg said. He declined to name them, however. Although
the company had plenty of assets, a shortage of cash led to
its initial Chapter 11 bankruptcy filing on March 22.

TELEGROUP: Cygnus Seeks Relief From Stay
Cygnus Telecommunications Technologies, LLC requests an
order granting Cygnus relief from the automatic stay and to
enjoin the debtor from infringing activity.

Cygnus claims that the debtor, Telegroup, Inc. has and
continues postpetition to generate substantial revenues
from the sale and provision of long distance telephone
service utilizing the Cygnus patented system and method for
International Call-back without Cygnus' consent. The debtor
recently announced a transfer of substantially all of its
assets to Interoute, and Cygnus believes that Interoute
intends to continue the sale and provision of International
Call-back services to the debtor's and its subsidiaries'
retail customers.  Cygnus seeks relief from the automatic
stay to take all actions necessary to commence and
prosecute an Infringement Lawsuit against the debtor.

THORN APPLE: Committee Seeks To Terminate Exclusivity
The Official Committee of Unsecured Creditors requests that
the court terminate exclusivity immediately because the
debtor, Thorn Apple Valley Inc. has consented to an order
which deprives the debtor of the right to negotiate a plan
of reorganization.  The Committee alleges that it is unable
to negotiate a plan with the debtor and the only way for
the Committee to obtain plan provisions which it favors is
for the Committee to propose its own plan.

An interim order was entered by the court whereby the
Lender has the right to veto any plan of reorganization
proposed by the debtor due to language in a section
regarding best efforts to effect a sale.  The section
states that the debtor will use its best efforts to
effectuate a sale of its assets, or "if acceptable to
Lenders in their sole and absolute discretion, a plan of

The Committee believes that it is at an unfair disadvantage
with respect to the lender, and that it is in an impossible
position because any negotiation concerning a plan of
reorganization must take place with the Lender, which has
veto power over any plan, but the Committee is arguably
precluded from negotiating with the Lender while the
debtors' exclusivity continues.

THORN APPLE: Restructures Sales Staff             
Thorn Apple Valley, Inc. (OTC Bulletin Board: TAVIE), a
Southfield, Michigan based meat producer, announced  
they have completed a strategic reorganization of their
sales staff that began more than six months ago with the
appointment of Mike Rozzano as Executive Vice President of
Sales.  As part of the new restructuring, Thorn Apple
Valley announced the appointment of two new retail sales
vice presidents, Ed Knoblich and Larry Swafford.  There
were several other promotions and additions of new  

The addition of the two new vice presidents and the
restructuring of the sales department are part of a number
of new changes taking place. TAV is changing their logos
and packaging, as well as improving products for taste
and texture.   The company is also in the process of
implementing what it believes will be the most
comprehensive food safety program in the industry.

TAV also announced that 8 sales representatives in Michigan
left the company.

VENCOR INC: $19 Million Rental Due, Obtains Extension
Vencor Inc., a long-term healthcare provider operating
hospitals, nursing centers and contract ancillary services
in 46 states, failed to pay rental to Ventas, Inc. when
payment fell due May 7, 1999.  Ventas served notices
of non-payment under the Master Leases, however, the
parties have since entered into further amendments of their
prior Standstill and Tolling Agreements.  Extended until
June 6, 1999 is the time during which no remedies may be
pursued by either party.  Vencor now has until June 11,
1999 to cure it's failure to pay May rents.  Chairman and
CEO of Vencor, Edward L. Kuntz, while cautioning that
uncertainties exist, states that he is optimistic that
continuing discussions with Ventas, senior bank lenders,
and holders of the company's 9 7/8% Guaranteed Senior
Subordinated Notes, will lead to an improved capital
structure for the Company.  Mr. Kuntz cites as a key
element in his optimism the approximately 60,000 employees
dedicated to providing quality care and services to the
Company's patients and nursing center residents.

WESTMINSTER CAPITAL: Reports First Quarter Results
Westminster Capital Inc., (PCX:WI), a holding company that
makes opportunistic value-added  investments in publicly-
held and private companies, today reported net earnings
of $402,000, or $0.05 per share diluted, for the three
months ended March 31, 1999, compared to net income of
$2,511,000, or $0.32 per share diluted, for the
three months ended March 31, 1998.

Revenues for the quarter were $6,999,000, compared to
$8,577,000 for the three months ended March 31, 1998. The
decrease in revenues resulted in part from a decline in
sales at the Company's wholly owned subsidiary, Westland
Associates, as well as the effect of $2,644,000 in interest
earned on a franchise tax claim that was recorded in the
three months ended March 31, 1998. Cash and marketable  
securities as of March 31, 1999 totaled $22,942,000.

In January 1999, the Company announced that it had acquired
an 80 percent interest in One Source Industries LLC, a
privately held company that provides turnkey packaging and
point-of-sale displays for a broad spectrum of consumer  
products ranging from computer software to food products,
for a purchase price of $4.8 million at closing and up to
an additional $2.6 million in deferred contingent payments
over the next four years. Last year One Source reported net
profits before income taxes of $1.8 million on revenues of
$10.2 million.

Westminster Capital's operations include, Westland
Associates Inc., a group purchasing services for new-car
dealerships, Global Telecommunications, a telephone service
to military personnel on U.S. Navy bases, and One Source  
Industries, a provider of packaging and point-of-display
materials. The Company also engages in certain lending
activities, including origination and purchasing loans, as
well as investing in securities which principally consists  
of U.S. Government securities and to a limited extent other
equity based securities.

WILSHIRE: Returns to Profitability in First Quarter
Wilshire Real Estate Investment Trust Inc. (Nasdaq:WREI) a
hybrid REIT specializing in diversified real estate
investments, reported net income of $1.8 million, or $0.15  
per share, for its first quarter ended March 31, 1999.

Funds from operations were $3.3 million, or $0.29 per
share. The results follow two quarters of net losses caused
by the adverse market conditions of 1998. The Company
commenced operations in April 1998, and did not report
financial results for the comparable period last year.

"We are pleased to report a return to profitability for the
first quarter, which reflects improvement in the market for
mortgage-backed securities as well as our intense
activities during the past few months to stabilize our
balance sheet and position the Company for this rebound,"
said Andrew Wiederhorn, chairman and chief executive

"As we resume acquisition activities, we plan to increase
our investments in loans and to de-emphasize new
investments in commercial operating properties.  We believe
that investments in loans provide higher yields and
allow us to more  efficiently leverage existing capital,
thereby providing a higher return on  equity. Consistent
with our strategy, we also see attractive opportunities for  
additional investments in Europe, particularly in France.
In addition to the direct acquisition of loans and other
investments, we may seek to invest in other companies that
invest in real estate related assets, especially in cases  
where the market capitalizations of such companies do not
reflect the inherent  values of the underlying assets or

On April 29, 1999, the Company sold a loan held for sale
secured by commercial properties in the United Kingdom with
a carrying value of approximately $47.9 million as of March
31, 1999. As a result of this sale, the Company reversed  
$3.9 million of a valuation allowance previously provided
for in the provision for losses in the accompanying interim
consolidated statement of operations for  the quarter ended
March 31, 1999. This valuation allowance had been
established in 1998 based upon management's estimate at
that time of the ultimate  recoverability of the asset in a

Interest income for the quarter was $7.1 million and net
interest income before provisions for losses was $3.4
million, generated primarily from investments in mortgage-
backed securities and mortgage loans. Provision for losses
was a net recovery of $1.1 million, which reflects reversal
of $3.9 million taken in prior periods for the above-
referenced loan held for sale.

WFSG, through its subsidiary, Wilshire Realty Services
Corporation, manages the Company's investment affairs and
advises it pursuant to a management agreement.  WFSG was
negatively impacted by adverse market conditions in 1998
and incurred  significant losses. WFSG filed a prepackaged
plan of reorganization as part of a Chapter 11 Bankruptcy
filing, which was subsequently approved by the Bankruptcy
Court. In connection with the restructuring, the Company
agreed to  provide WFSG with DIP financing of up to $10
million as part  of a settlement of a $17.0 million
receivable from WFSG.

To the extent the Company funds less than $10 million of
this facility, the unfunded prorated portion of the
receivable is to be treated pari passu with claims of
WFSG's unsecured senior note holders. The Company funded $5
million of the facility and has decided not to fund the
remaining $5 million. As a result, during the quarter, a
$2.7 million provision for loss was recorded to  
recognize the net economic impact of converting the
remaining 50% of the $17.0 million receivable to new WFSG
common stock.


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Troubled Company Reporter is a daily newsletter, co-
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