TCR_Public/990825.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, August 25, 1999, Vol. 3, No. 164                                              

ATC GROUP: Meeting of Creditors, Disclosure Statement Hearing
BEST PRODUCTS: NationsBank Signs Lease for Former HQ
BMJ MEDICAL: Seeks Extension of Exclusivity
BRAZOS SPORTSWEAR: Court Approves Rejection of Leases/Contracts
BRAZOS SPORTSWEAR: Court Authorizes Extension of Exclusivity

BRUNO'S: Examiner Seeks To Increase Fee Cap To $500,000
COHO ENERGY: Files Voluntary Chapter 11 Petition
EDISON BROTHERS: CODA Acquisition Group Obtains Most CODA Stores
FILENE'S BASEMENT: Paragon Capital Steps Up Second Time
FPA: Humana Transfers Operations of 6 Former FPA Centers

HECHINGER: Committee Seeks Authority To Hire Co-Counsel
NEWMONT MINING: Hedged Millions In Gold
OLD AMERICA: Home D‚cor Chain Closing; Stores Unable to Recover
ONE STOP WIRELESS: How do you leverage $2.7 M To Pay $6M?
PHILIP SERVICES: Court Authorizes Counsel For Committee

PHILIP SERVICES: Seeks Authority To Hire Ernst & Young
PITTSBURGH PENGUINS: Lemieux Expected to Close Deal This Week
PRIMARY HEALTH: Seeks Extension of Exclusivity
PRIMARY HEALTH: Seeks Extension of Time To Assume/Reject Leases
SILAS CREEK: Hearing To Consider Approval of Disclosure Statement

THE COSMETIC CENTER: Seeks Extension of Exclusivity
ZENITH: Case Summary & 20 Largest Unsecured Creditors
ZENITH: Prepack Bankruptcy With Strong Bondholder Support


ATC GROUP: Meeting of Creditors, Disclosure Statement Hearing
The debtors, ATC Group Services Inc., et al. filed voluntary
petitions for relief under chapter 11 on July 26, 1999.

A meeting of creditors will be held on September 9, 1999 at 2:30
pm in the office of the US Trustee, 80 Broad street, 2nd floor,
New York, NY.

A hearing will be held before the Honorable Jeffry H. Gallet, Us
Bankruptcy Court for the Southern District of New York, One
Bowling Green, New York, NY Room 523, September 24, 1999 at 11:00
AM to consider the application of the debtors for entry of an
order approving the Disclosure Statement as containing "adequate
information" with respect to the plan and authorizing the debtors
to solicit acceptances of the plan.

The deadline for filing proofs of claim against the debtors is no
later than 5:00 PM September 17, 1999.

BEST PRODUCTS: NationsBank Signs Lease for Former HQ
The headquarters of Best Products, off I-95 near Richmond, Va.,
has been vacant since the company closed in bankruptcy
proceedings in January 1998, but according to Virginia News
Network, NationsBank Corp. has signed a deal to lease the
285,000-square-foot building as it expands its operations out of
a nearby facility. (ABI 24-Aug-99)

BMJ MEDICAL: Seeks Extension of Exclusivity
The debtors, BMJ Medical Management, Inc. et al., seek entry of
an order extending for a period of 90 days the debtors' exclusive
periods within which to file and solicit acceptances of a plan or
plans of reorganization.

The debtors seek an extension of the plan proposal period through
and including November 18, 1999 and the Solicitation period
through and including January 18, 2000.  Both the creditors'
committee and the pre-petition and post-petition Lenders support
the extension.  The DIP financing facility currently in place
will be extended through January 18, 2000, subject to court

The debtors have submitted their plan of reorganization and they
are currently involved in negotiations with their creditor
constituents regarding proposed plan treatment, and are also
involved in negotiating settlements with certain Medical Groups
regarding assumption and/or rejection of the MSA's.  The debtors'
plan is premised upon the retention of core Medical Groups in the
southeast and eastern US.  The debtors continue to negotiate with
certain of the remaining 29 Medical Groups and prospective buyers
of the assets; the debtors anticipate that the reduction of non-
core Medical Groups will reduce corporate overhead and streamline
operation.  The debtors have already received over $17 million in
cash from the sale of five an ambulatory surgery center and the
termination of management relationships and the transfer of
assets and the debtors have received forgiveness of $897,727 in
unsecured claims.

There are 5 motions pending seeking approval of transactions with
four Medical Groups and one individual doctor that will result in
the termination of management relationships and the receipt of
approximately $4 million in cash. Certain of the debtors have
consummated an asset purchase agreement for the sale of the
Warner Park Surgery Center in a transaction that resulted in the
payment to BMJ of $5 million in cash.  BMJ has one pending motion
to sell a surgery center which will result in the transfer of
assets for $5 million in cash. There are other negotiations
underway and the debtors obtained a court order setting the
claims bar date for July 6, 1999.

The debtors state that the case is enormous and enormously
complex.  The debtors claim that the evaluation of the 34 MSAs
and the operations of the 34 Medical Groups to select those
"core" groups was a gargantuan task.

BRAZOS SPORTSWEAR: Court Approves Rejection of Leases/Contracts
The US Bankruptcy Court for the District of Delaware entered an
order authorizing the debtors to reject executory contracts with
Lucent Technologies and AT&T and four unexpired leases .

BRAZOS SPORTSWEAR: Court Authorizes Extension of Exclusivity
By order dated August 10, 1999, the US Bankruptcy Court for the
District of Delaware entered an order extending the exclusive
periods during which the debtors may file a plan or plans of
liquidation and solicit acceptances for such plan.

The plan proposal period is extended through and including
September 29, 1999.  The solicitation period is extended through
and including November 29, 1999.

BRUNO'S: Examiner Seeks To Increase Fee Cap To $500,000
The cost of the Leveraged Recapitalization Investigation is,
essentially, being paid for by the parties who have the economic
interests in these chapter 11 cases, the Debtors observe.  If
they consent to a 150% increase in the fee cap, so be it, the
Debtors conclude.  The Debtors suggest, however, that any
increase in the fee cap this time around should be the
last.  Chapter 11 is not the optimal environment for the Debtors
to operate a competitive grocery store operation.  The Debtors
would like to leave the Court sooner rather than later, and don't
want to see delays in the presentation of the Examiner's Report
as the cause for further delay in confirming a plan and emerging
from chapter 11.  If the Examiner cannot conclude his
investigation in 12 weeks for under a half-million dollars,
now's the time to say something . . . not on the eve of his
September 15 deadline.  

W.R. Huff tells Judge Robinson that the important issue isn't how
much money the Examiner will spend or the timing of his report.  
Rather, Huff suggests, Judge Robinson should be looking past the
September 15 deadline and seeing that regardless of what the
Examiner concludes one side will be disappointed.  That
disappointment will generate further discovery, litigation, and,
quite likely, a hotly contested confirmation process.  
Rather than having the participants sit back and wait until
September 15, now is the time, Huff recommends, for the Court to
open the investigation process (meaning the Examiner should
conduct formal depositions rather than informal interviews and
should open his document room to each of the core parties in
interest) for participation by all of the players.  An
open process, Huff believes, will foster negotiation and
settlement talks; a closed process will only fuel further

Hold on a second, the Debtors urge in a Reply to Huff's
suggestion that Judge Robinson implement some type of "discovery
protocol" in connection with the Examiner's investigation.  Any
elaborate protocol should have been discussed some time ago and
will only serve to delay these chapter 11 cases.  

Mr. Goldin is an experienced and capable Examiner, the Debtors
argue.  Let him do the work he thinks he needs to do how he knows
to do it best.  The Debtors view Huff's motives for this
eleventh-hour request for a discovery protocol with a high level
of suspicion.  The Debtors suspect that Huff's real motive is to
delay and impede the Leveraged Recapitalization Investigation and
the Debtors' emergence from chapter 11 because Huff
fears that the Examiner won't concur with Huff's conclusions.  An
elaborate discovery protocol, the Debtors suggest, may give Huff
the ability to manipulate the Investigation and intimidate the
Examiner.  Just let the Examiner do his job, the Debtors urge,
without a mid-course correction in the process. (Bruno's
Bankruptcy News Issue 25; Bankruptcy Creditors' Service, Inc.)

COHO ENERGY: Files Voluntary Chapter 11 Petition
Coho Energy Inc. (OTC BB:COHO) announced that this morning in
Federal Bankruptcy Court, Dallas, the Company filed a petition
for Chapter 11 bankruptcy protection.

The decision to seek protection was taken by Coho and certain
subsidiaries because the Company now believes that the resolution
of a restructuring cannot be completed without the protection and
assistance of the bankruptcy court. Timing of the bankruptcy
filing was imposed by several factors including the
acceleration of the Company's $ 240 million indebtness by its
bank creditors on Aug. 19, the inability of the banks and the
bondholders (the two large creditor groups) to reach a
satisfactory agreement with each other, and the potential for
one of the bondholder's being granted a summary judgment in its
lawsuit against the Company for full payment of principal and
past due interest. The lack of liquidity during the restructuring
period has made the process of working through this problem more
difficult. Coho is continuing to discuss a solution to
its capital needs with the banks, the bondholders and other
potential investors. The Company expects to file a plan of
reorganization with the bankruptcy court in the near future.

Coho Energy Inc. is a Dallas-based independent oil and gas
producer focusing on exploitation of underdeveloped oil
properties in Oklahoma and Mississippi.

EDISON BROTHERS: CODA Acquisition Group Obtains Most CODA Stores
The CODA Acquisition Group announced today that it has acquired
the national chain of CODA, JW/Jeans West and J Riggings stores
from Edison Brothers, Inc. to be developed into a chain
of stores under the CODA umbrella. The stores will feature high-
profile brands catering to the contemporary (urban) fashion

James Khezrie, owner and operator of Jimmy Jazz stores, a
successful tri-state retail chain, will head the new venture
along with Stuart Feldman, principal of Chelsea Capital, and a
management team consisting of key individuals from the original
CODA Company. Willam B. Wachtel, of the law firm Wachtel & Masyr,
assisted in the transaction.

"I see this as a great opportunity to expand upon our Jimmy Jazz
concept nationally, sharing with CODA the principles that have
guided our success to date," said Mr. Khezrie. "We will continue
to assume that the customer is as smart as we are, offer the best
selection and availability of the hottest styles, and make sure
that the presentation is top-notch."

The chain will consist of 155 stores and information regarding
the rollout will be announced shortly. No financial terms were
discussed. (Edison Brothers Bankruptcy News Issue 35; Bankruptcy
Creditors' Service Inc.)

FILENE'S BASEMENT: Paragon Capital Steps Up Second Time
As Filene's Basement files for Chapter 11 Bankruptcy protection
today, Paragon Capital LLC announced that, along with General
Electric Capital Corporation, it will provide an expanded $ 135
million in debtor-in-possession financing.

This arrangement is $ 10 million higher and provides greater
availability than the line of credit Filene's Basement secured
from Paragon and GE just last month.

Nearing the final holiday shopping season of the century, the
Basement looked to Paragon Capital LLC, of Needham, Mass., and
General Electric Capital Corporation, of Stamford, Ct., in July
for a $ 125 million revolving line of credit that would replace
and provide considerably more availability than the company's
previous line of credit with a different lender. The financing
was intended to help drive the expansion of the Basement's new
Aisle 3 stores and support the continued repositioning of its
core business. Since then, despite having the necessary
liquidity, the Basement has encountered a lack of trade
support and had difficulty obtaining enough inventory. Filene's
Basement and its lenders agree that Chapter 11 will give the
company an opportunity to receive the needed inventory for a
critical time of year and facilitate its restructuring and

"We stand committed to ensuring that all our resources are
available to assist the Basement at this very important time,"
said Paragon CEO Stewart Cohen, and President Andrew Moser. "We
are confident that this company, with its capable management,
long-standing reputation and rich history, will demonstrate
and capitalize on its full potential. The Basement now has a
platform from which the vendors can fully support its efforts."

Paragon Capital is an asset-based lender whose management is
comprised of experienced former retailers and lenders. The
company has been defining a new, specialized retail lending niche
since it was founded in 1997. Paragon has experienced dramatic
growth, completing almost $ 300 million in new financing
with retailers like: Learningsmith, Crown Books, The Big Party,
Weathervane, Golf America, Pacific Eyes & T's, Harvey Electronics
and Bikes USA. One of the main reasons for Paragon's success is
that, as retailers and merchants with lending expertise, the
management team applies a true merchant's perspective in
lending to retailers.

Paragon Capital is a partnership between one of America's premier
"boutique" asset valuation firms, The Ozer Group LLC of Needham,
Mass., and a leader in the asset-based lending industry, Foothill
Capital Corporation of Los Angeles. Foothill is a subsidiary of
Wells Fargo & Company, a $ 202 billion financial services
company. With the backing of Wells Fargo and Foothill, Paragon
functions autonomously as an entrepreneurial company that
provides financing solutions to North American retail and
consumer products companies.

FPA: Humana Transfers Operations of 6 Former FPA Centers
Humana Inc. (NYSE: HUM) has entered into partnerships with three
medical organizations to operate six South Florida medical
centers formerly operated by FPA Medical Management Inc.

The agreements are effective September 1, 1999.  Terms were not

Humana assumed operational responsibility for 50 former FPA
centers nationwide June 1 as part of an agreement with FPA,
approved by the federal bankruptcy court overseeing FPA's Chapter
11 reorganization.

Since then, as a result of this and similar transactions over the
past several weeks, Humana no longer operates 21 of the 50
centers. The transactions are consistent with Humana's intention
to transfer operation of all the former FPA centers to other
provider groups, enabling Humana to focus exclusively on its core
business of health insurance.

Humana assumed operational responsibility for the 50 centers to
ensure continuity of care for 121,000 Humana health plan members
in South Florida, Kansas City, San Antonio, Orlando, Tampa and
Jacksonville.  The six South Florida centers serve 9,500 Humana

The three South Florida provider groups that have entered into
partnerships with Humana are Primary Care Associates, Dr. Olivia
Graves and South Florida Medical Centers, Inc.

"Humana's number one priority is the health of our members," said
Tom Wyss, executive director for Humana's South Florida market.  
"The new partners have agreed to maintain five of the existing
medical center locations for the members' convenience and
continuity of care, as well as assume the physicians and staff
and Humana's disease management programs.  Members of the
sixth center have been transferred to an adjoining medical

In explaining Humana's decision to assume operational authority
for the 50 former FPA centers in June, Senior Vice President Mike
McCallister said, "Humana wanted to solidify and stabilize the
relationship between physicians and members and therefore
eliminate the uncertainty related to the FPA bankruptcy process.
Now that we've done so, we are successfully transferring
operational responsibility for the centers to provider groups
with a proven ability to offer our members high-quality care."

Humana provides health insurance products and services to 1.3
million Floridians.

Humana Inc., headquartered in Louisville, Ky., is one of the
nation's largest publicly traded managed health care companies
with approximately 6.1 million medical members located primarily
in 15 states and Puerto Rico. Humana offers coordinated health
care through a variety of plans -- health maintenance
organizations, preferred provider organizations, point of service
plans and administrative service products -- to employer groups,
government- sponsored plans and individuals.

HECHINGER: Committee Seeks Authority To Hire Co-Counsel
At the request of the  US Bankruptcy Court for the District of
Delaware, counsel for the firm Pepper Hamilton LLP submitted a
proposed order authorizing the employment and retention of Pepper
Hamilton LLP nunc pro tunc to June 24, 1999 as co-counsel for the
official committee of unsecured creditors.

NEWMONT MINING: Hedged Millions In Gold
Newmont Mining Corp., the world's second-largest gold producer,
said it acquired put-option contracts giving it the right to sell
2.85 million ounces of gold at $ 270 an ounce.

The contracts cover a two-year period between this month and July
2001, the company said in its quarterly filing with the
Securities and Exchange Commission. Newmont produced 4.07 million
ounces of gold in 1998.  Denver-based Newmont said last month
that it would hedge its production for the first time in seven
years. Gold, which has fallen 11 percent this year, is still
trading near 20-year lows.

OLD AMERICA: Home D‚cor Chain Closing; Stores Unable to Recover
Two area home decor stores are in the process of closing after
their parent company, Old America Stores, was unable to recover
from a Chapter 11 bankruptcy filing in August 1997.

The two local subsidiaries affected are in Martinez and North
Augusta. A company official said the company is liquidating its
remaining 59 stores.

Old America, which sells home decor merchandise, will keep its
stores open until mid-October. Both stores have discounted their
merchandise by 20 percent.  Old America, which is headquartered
in Dallas, still is in the process of reorganizing and will make
additional announcements as changes occur, Mr. Hunt said.

Old America, which was an arts and crafts store chain, closed
14 of its unprofitable stores and eliminated 20 percent of its
corporate staff. In January 1998, bankruptcy court approved the
sale of Old America to Robert E. Kirkland. Four days later the
stock price dropped to zero.  After ownership changed hands, the
company's remaining stores switched over to selling home decor

ONE STOP WIRELESS: How do you leverage $2.7 M To Pay $6M?
BCD News and Comment reports on August 18, 1999 that the debtors,
who include One Stop Wireless of America, Inc. and two other
jointly administered and substantively consolidated cases, used
to sell prepaid cellular phone cards nationwide. While they
initially managed to raise 53 million through 53 separate limited
liability partnerships, the estate is now worth only 2.7 million
or thereabouts.

How do you leverage 2.7 million in order to satisfy investors
with about 53 million in claims, trade creditors with 5 million
to 6 million in claims, and claims by class action plaintiffs,
the executive committee, employees and a large judgment creditor?

The attorneys who took over this case - James Bastian, Richard
Marshack and Mark Bradshaw of Marshack Shulman & Hodges LLP in
Irvine, Calif. - did satisfy most creditors, to the extent that
is possible, with a plan that is quite ingenious.

Originally, the plan was to do business in Canada, but the
debtors couldn't reach agreement with the major carriers so they
switched their focus to the U.S.  and made plans to expand to
"everything under the wireless umbrella." To distribute their
products, the debtors opened or were opening stores in Salt
Lake City, Seattle, San Francisco, Albuquerque, N.M., Boston,
Dallas, Houston and San Antonio.

To operate the business, the debtors bought telephone switching
equipment from Cellexis International. The equipment was
specially programmed to transfer prepaid calls. But there were
many problems with the systems.

After the companies filed Chapter 11, the debtors would take
Cellexis to arbitration saying they should be excused from
performance because the technology wasn't up to the standards of
the contract. But the arbitrator would rule that the debtors had
licensed technology and hadn't paid the licensing fees and that
the contracts weren't terminated. Therefore, Cellexis was awarded
more than 2 million. As part of the arbitration, Cellexis also
wanted a 750,000 unpaid airtime charge paid, but the arbitrator
said that wasn't part of the hearing. This is how Cellexis would
end up with an unsecured claim in the bankruptcy for almost 3

However, at this point, the companies were continuing their
downward slide into bankruptcy. In desperation, management wasted
1.5 million buying satellite-based phones in what reportedly
turned out to be a total scam. The investors, equally desperate,
formed an executive committee of five to insure their interests
were protected. The committee filed a class action suit alleging
everything from securities fraud to mismanagement, retained
Deloitte & Touche to do an audit, and hired an outside consulting
firm, C/Net: Solutions Inc. of Irvine, Calif. to whom it gave
management authority.

The consultants were attempting to work out deals with vendors
and others in January 1998, when Cellexis brought injunctive
proceedings in state court in Denver to freeze the debtor's
remaining assets. With the money frozen, the consulting firm
couldn't implement its plan and the company was forced to file
bankruptcy on Feb. 13, 1998 in the District of Delaware.

To beef up the estate, Marshack Shulman went after management.
Two members of the management team paid the estate a lump sum
of 750,000 to settle claims against them.

Unsecured creditors divvied up 250,000 on day one, with the
possibility of more depending on the outcome of litigation
against those officers and directors who didn't settle.

Cellexis' equipment was returned to them, but the company had
other assets including office computers and equipment. The
debtors managed to raise 200,000 by selling this equipment.
The debtors arranged deals with PhoneXchange and Freedom

Litigation against directors and officers and other parties
continues in Denver. Investors have agreed to subordinate up to
750,000 of their recovery from litigation proceeds to unsecured
trade creditors, whose allowed claims are expected to range
between 1 million and 2 million.

Judge Alberts reportedly said, 'This could be a
great deal [for investors] or it could be pie in the sky.'"

PHILIP SERVICES: Court Authorizes Counsel For Committee
The Official Committee of Unsecured Creditors of Philip Services
(Delaware) Inc. et al. is authorized by the US Bankruptcy Court
for the District of Delaware to employ the firm of Blank, Rome
Comisky & McCauley LLP nunc pro tunc to July 12, 1999 as counsel
in these cases.

PHILIP SERVICES: Seeks Authority To Hire Ernst & Young
The debtors, Philip Services (Delaware) Inc., et. al. and certain
of their affiliates seek authority to hire Ernst & Young Inc. as
restructuring accountants and financial advisors to the debtors.

Effective as of July 15, 1999, E&Y Inc., the Canadian arm of
Ernst & Young would serve as financial advisors to the debtors as
wellas the Monitor in the Canadian cases.  There will be no cap
or other limitation on damages arising from any misconduct by E&Y
Inc.  E&Y Inc.'s engagement will contain no provisions of
alternative dispute resolution or arbitration.  E&Y Inc. will
file fee applications in the US Bankruptcy Court.  The
professionals of the firm will charge between $495 per hour for
partners and principals to $150 per hour for senior sand staff.

The firm will be responsible for advising and assisting the
debtor in organizing their resources and activities to manage the
Chapter 11 process.  It will advise and assist with the
preparation of all financial information including exit
financing; and will advise and assist the debtor with regard to
every aspect of formulating a business plan and plan of
reorganization.  The firm will also advise and assist the debtors
in connection with reorganization tax issues and potential tax

PITTSBURGH PENGUINS: Lemieux Expected to Close Deal This Week
Mario Lemieux is expected to close his deal to buy the bankrupt
Pittsburgh Penguins team this week, according to court documents
and parties involved in the case, The Pittsburgh Post-Gazette
reported today. Team attorney Robert G. Sable of Sable, Makaroff
& Gusky filed a five-page motion, which indicated that the
closing was likely to begin yesterday and conclude tomorrow. The
closing did not begin yesterday, but Bankruptcy Judge Bernard
Markovitz moved up hearings on settlements of lawsuits related to
the case to today, in order to help Lemieux and his group of
investors finalize their purchase of the Penguins. Lemieux has
agreed to invest $25 million and said he has obtained commitments
for more than $50 million from other investors. (ABI 24-Aug-99)

PRIMARY HEALTH: Seeks Extension of Exclusivity
The debtors, Primary Health Systems, Inc. and its affiliates seek
extension of the exclusive periods during which the debtors may
file a plan of reorganization and solicit acceptances thereof.

A hearing to consider the motion will be held on August 25, 1999.

Since obtaining a short 45-day extension of their exclusive
periods, the debtors have not yet had an opportunity to compete
negotiations with the bank lenders.  Because of the complexity of
the issues underlying a chapter 11 plan in this case, including a
planned conversion of the debtors to not-for-profit status, the
debtors have not yet begun negotiations with the banks and the
creditors' committee.  The debtors request extensions of each of
the Exclusive periods, through and including December 10, 1999
and February 8, 2000, respectively.  The termination date of the
debtors' proposed amended DIP financing is December 10, 1999.  

PRIMARY HEALTH: Seeks Extension of Time To Assume/Reject Leases
The debtors, Primary Health Systems, Inc. and its affiliates seek
extension of time to assume or reject unexpired leases of
nonresidential real property for 120 days, through and including
January 11, 2000.

The debtors assert that it is particularly important to evaluate
their remaining leases carefully, since as a health care services
company, the debtors have an intimate relationship with the
public and must maintain the public's confidence in their
continued ability to provide quality health care.  

SILAS CREEK: Hearing To Consider Approval of Disclosure Statement
A hearing to consider the approval of the Disclosure Statement of
Silas Creek Retail, Inc. and Silas Creek Retail, LP is scheduled
for September 16, 1999 before the honorable Mary Fl. Walrath, 6th
Floor, 824 Market Street, Wilmington, delaware at 10:30 AM.

THE COSMETIC CENTER: Seeks Extension of Exclusivity
The Cosmetic Center, Inc., debtor, seeks extension for a period
of approximately 90 days of the debtor's exclusive periods in
which it may file a plan of reorganization and solicit
acceptances thereof.  In an effort to stem its significant
operating losses, Cosmetics entered into an agreement with
Hilco/Great American Group to assist in conducting store closing
sales at approximately 116 unprofitable stores.  The store
closings were completed in mid-July.  Given the deteriorating
financial condition of its business, Cosmetics decided to
liquidate the inventory and related assets at its remaining
stores and the inventory at its warehouse.  The Liquidation Sales
will be completed on or before November 15, 1999.

The debtor requests the entry of an order extending the plan
proposal period for approximately ninety days, through and
including November 15, 1999 and extending the solicitation period
for approximately 90 days, through and including January 10,

The debtor submits that that the requested extension will allow
the debtor to complete the liquidation and wind-down of its
business thereby maximizing the value of its estate to the direct
benefit of the creditors.  The debtor asserts that the size and
complexity of the case justify an extension of the exclusive

ZENITH: Case Summary & 20 Largest Unsecured Creditors
Zenith Electronics Corporation
1000 Milwaukee Avenue
Glenview, Illinois 60025-2493

Court Filing: Chapter 11; District of Delaware; August 23, 1999

Type of Business: Development, engineering, manufacturing,
marketing, distribution and sales of consumer electronics.

Debtor's Counsel:
James H.M. Sprayregen and Matthew N. Kleiman
Kirkland & Ellis
200 E. Randolph Drive, Chicago, IL 60601

Laura Davis Jones
Young Conaway Stargatt Taylor, LLP
11th Floor, Rodney Square North
Wilmington, Delaware

Total Assets: $310,900,000
Total debts: $732,000,000

Subordinated debt securities $108,900,000 - 259 holders

Shares of common stock: 67,525,447 - 11,500 holders

20 Largest Unsecured Creditors:

State Street Bank and Trust Company      bondholder $29,292,000
Boston Safe Deposit and Trust Company    bondholder  $5,202,000
The Northern Trust Company               bondholder  $5,106,000
Salomon Smith Barney, Inc.               bondholder  $5,064,500
Thompson Consumer Electronics            trade debt  $4,972,446
Prudential Securities Incorporated       bondholder  $4,667,000
Daewoo Electronics Corporation           trade debt  $4,385,654
Citibank NA                              bondholder  $4,099,000
Toshiba America Incorporated             trade debt  $4,020,867
Merrill, Lynch, Pierce Fenner
& Smith Safekeeping                      bondholder  $3,325,000
Bankers Trust Company                    bondholder  $3,242,000
Charles Schwab & Co., Inc.               bondholder  $2,728,995
Bear Stearns Securities Corporation      bondholder  $2,605,000
The Bank of New York                     bondholder  $2,594,000
National Investor Services Corporation   bondholder  $2,517,334
Chase Manhattan Bank                     bondholder  $2,304,000
National Financial Services corporation  bondholder  $2,074,000
Phillips Display Components              trade debt  $1,992,803
A.G. Edwards & Sons, Inc.                bondholder  $1,945,666
Howe Barnes Investments, inc.            bondholder  $1,650,000

ZENITH: Prepack Bankruptcy With Strong Bondholder Support
Zenith Electronics Corporation (OTC Bulletin Board: ZETHQ)
commenced its prepackaged plan of reorganization with the
overwhelming support of its creditors by filing a Chapter 11
petition in the U.S. Bankruptcy Court in Wilmington, Delaware.

With bondholder approval and financing in place, today's filing
represents one of the final steps in Zenith's restructuring.

The company said that, of the creditors who voted in its
prepetition solicitation of consents, 97 percent of voting
bondholders voted in favor of the plan of reorganization.  
Pursuant to the plan, current holders of the $103.5 million in
principal amount of the 6-1/4 percent Convertible Subordinated
Debentures will receive $50 million of new 8.19 percent
senior debentures maturing in November 2009.

As announced in April, Zenith has entered into a binding
agreement with Citicorp North America Inc. to provide a $150
million debtor-in-possession financing facility to cover the
period during the prepackaged court proceeding and a new three-
year, $150 million credit facility to cover the period following
the completion of the company's restructuring.

Under the plan, trade creditors and vendors will not be impaired
and will continue to be paid in the ordinary course of business.  
The company also expects to continue to pay employees' pre-
petition and post-petition wages, salaries and benefits without
interruption, and to fulfill obligations to customers throughout
the reorganization.

Under the plan, all outstanding common stock, including that for
which LG Electronics (LGE) paid $380 million, will be canceled
and no stockholders, including LGE, will receive any distribution
for their shares.

As part of the restructuring, the company's largest creditor,
LGE, has agreed to exchange $200 million of its claims for 100
percent of the newly issued equity of the reorganized Zenith.  In
exchange for other claims, LGE will receive certain operating
assets and LGE New Restructured Senior Notes.

Following the restructuring, Zenith will be a wholly owned
subsidiary of LGE. "After emerging from the reorganization,
Zenith will have access to LGE's considerable research and
manufacturing resources, enhancing Zenith's strength
and ability to compete in the rapidly evolving television
industry," Gannon said.

Major elements of Zenith's operational restructuring --
establishing new sourcing agreements with world-class
manufacturers and de-emphasizing Zenith's own manufacturing --
have been completed.  Zenith has closed or sold all of its
manufacturing operations except the Reynosa, Mexico, TV assembly
plant, which will be transferred to LGE as part of the

John Koo, vice chairman and chief executive officer of LG
Electronics, said, "LGE considers Zenith a very important part of
our North American business strategy.  While from a financial
perspective, LGE's investment in Zenith has yielded disappointing
results, we are committed to participating in this restructuring
because we believe that a restructured, refocused Zenith can be
an effective competitor in the North American television

Zenith, based in Glenview, Ill., is a long-time leader in
electronic entertainment products.  Zenith's largest stockholder
is LGE, a global leader in consumer electronics with operations
in 180 countries and annual sales of more than $9 billion.  LGE,
which owns 55 percent of the company's outstanding shares,
acquired its majority interest in November 1995.


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Troubled Company Reporter is a daily newsletter, co- published by
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