TCR_Public/990826.MBX    T R O U B L E D   C O M P A N Y   R E P O R T E R
     
        Thursday, August 26, 1999, Vol. 3, No. 165                                              
                           
                    Headlines

ATLANTIC RANCHER: First Bankruptcy Auction on Internet
BRADLEES: Quarterly Performance Information Made Public
CODON PHARMACEUTICALS: Seeks Extension of Exclusivity
CROWN BOOKS: Committee Objects To Disclosure Statement
EATON'S: Pink Slips To Thousands

FEDCO: Seeks Approval of Dayton Hudson Agreement
FILENE'S BASEMENT: Interim Approval For Special Credit Line
FILENE'S BASEMENT: Jones Apparel and Nike Among Creditors
FIRST UNION REAL ESTATE: Seeks Approval To Sell Company Property
FOAMEX INTERNATIONAL: Class Action Suit Filed

FORMAN PETROLEUM: Files Chapter 11
FRANKEL'S: Seeks Order Compelling Performance by Scotty's
GENESIS PHYSICIANS: Seeks to Terminate Contracts
HECHINGER: Committee Taps Blackstone Group
H.O.L.A. Recordings: Case Summary & 20 Largest Creditors

LOEWEN: Committee Taps Professionals
LL KNICKERBOCKER: Involuntary Petition Filed; Stock De-Listed
LLOYD'S SHOPPING: Seeks Extension of Exclusivity
NEWCARE HEALTH: Bill Brandt Appointed Examiner With Broad Powers  
NEXTWAVE: Sprint Expresses Interest in C-Block PCS Licenses  

PRIMARY HEALTH: Court Approves Extra $3 Million
PLANET HOLLYWOOD: Noteholders Accept Pre-packaged Plan
PROGEN TECHNOLOGY: Trustee Seeks Authority For Liquidation
SIZZLER: Accelerated Growth Plan Announced By Company
SIZZLER: Former Employee Files $20 Million Lawsuit

TV FILME: Agreement With Senior Noteholder Committee
TATHAM: Subsidiaries of Tatham Offshore File Bankruptcy Petition
WESTERN DIGITAL: Announces Fourth Quarter, Year End Results
WESTERN DIGITAL: Expanding Product Design In Singapore Operation
WESTERN DIGITAL: 2.6 Million Shares Offered at $4.4325303

XATA CORP: Changes Accounting Firms
ZENITH: From Manufacturer To Marketer

                   **********

ATLANTIC RANCHER: First Bankruptcy Auction on Internet
------------------------------------------------------
Lycos, Inc. (NASDAQ:LCOS) announced an online auction to
liquidate the $ 3-million inventory of Atlantic Rancher, a luxury
clothing merchant that is currently in bankruptcy. The top
quality goods, including leather coats, wool sweaters, items made
from its patented DryHandle waterproof fabric and hundreds
of other items of outerwear and casual wear will be auctioned in
a first-of-its kind online auction at www.lycos.auctions.com,
starting today. Auctions will be quick, and opening bids for
individual items will be as low as one dollar.

"Conducting a bankruptcy liquidation sale in an online auction
format is clearly history in the making," said Leslie Anne Hawes,
of Stroock & Stroock & Lavan, attorney for John J. Aquino, the
appointed bankruptcy trustee. "This venue allows us to disperse
of goods quickly with a significantly more expansive
buying audience. With large volumes of extremely high quality
merchandise available at well below fair market prices, we look
forward to an exciting trading place."


BRADLEES: Quarterly Performance Information Made Public
-------------------------------------------------------
Beginning on August 20, 1999, Bradlees, Inc. undertook
distribution to its banks and other credit providers summaries of
its second-quarter (13-week) and year-to-date (26-week) financial
results ended July 31, 1999.  Included in the
summaries is a comparison to the company's summary financial plan
for the fiscal year ended January 29, 2000 (fiscal 1999).  Due to
the company's adoption of fresh-start reporting as of January 30,
1999, the financial summaries are not comparable in certain
material respects to the prior-year periods presented.

Sales for the second quarter ended July 31, 1999 exceeded the
Plan by $43.3 million, or 12.8%, totalling $381.9 million.  The
increase, according to the company, was due primarily to
favorable customer response to the its merchandising and
marketing initiatives and the first-quarter liquidation
of one of the company's major competitors (Caldor Corp.). Net
income for the second quarter exceeded the Plan by $8.5 million,
resulting in a net showing of $3.2 million.  Although comparison
may not in all respects be comparable the second quarter of 1998
showed net sales of 322.8 million and a net loss of $2.7
million.

Year-to-date total sales exceeded the Plan by $72.5 million, or
11.4%, for a total net sales figure of 706.8 million. The year-
to-date net loss was $14.1 million below the Plan net loss,
arriving at a net loss of $20.3 million.  Whereas comparison may
not be viable, the 1998 first six-month period total sales were
$616.1 million and the company experienced a net loss of $27.4
million.

Bradlees is distributing the quarterly and year-to-date
performance against its Plan to its banks and other credit
providers to facilitate their credit analyses. The company
cautions that the performance information should not
be relied upon for any other purpose.  Factual information is
contained in the company's financial statements on file with the
Securities & Exchange Commission.  Bradlees states that it is
making public the quarterly performance information solely
because it is being distributed to a large number of the
company's vendors for purposes of their credit analyses. The
performance information provided here was not examined, reviewed
or compiled by the company's independent public accountants. The
company does not feel an obligation to continue reporting this
type of performance information and has indicated that it may
cease making such disclosures at any time. Further, the
company says that the information may be subject to future
adjustments and such adjustments could materially affect the
reported information.


CODON PHARMACEUTICALS: Seeks Extension of Exclusivity
-----------------------------------------------------
The debtors, Codon Pharmaceuticals, Inc. and Oncor, Inc. seek
court approval of an extension of the debtors' exclusive periods
in which to file a Chapter 11 plan and to solicit acceptances
thereof.

The debtors seek a short 14-day extension, from August 25, 1999
through and including September 8, 1999 of the period during
which the debtor will maintain the exclusive right to file a plan
resolving these cases, as well as a 14-day extension from October
25, 1999 through and including November 8, 1999 of the
period during which the debtors will have the exclusive right to
solicit acceptances of such a plan.

The debtors have been involved in complex litigation with Johns
Hopkins and RCAT Partners regarding the debtors' rights and
interests in certain valuable licenses.  These complex issues
have detracted from the debtors' ability and efforts to focus on
formulating a Chapter 11 plan.  The debtors have now resolved
these issues, subject to court approval.  The committee agrees to
the extension.


CROWN BOOKS: Committee Objects To Disclosure Statement
------------------------------------------------------
The Official Committee of Unsecured Creditors objects to the
debtors' proposed first amended Disclosure Statement.  

The Committee alleges that the Disclosure Statement is defective
because:

It fails to describe adequately the very substantial and strong
claims the debtors' estates have against certain present and
former insiders, namely the debtors' controlling stockholder Dart
Group Corporation and certain former directors and officers of
the debtors';

It fails to disclose that the Committee strongly believes the
claims should be vigorously pursued rather than released as the
debtors propose;

It fails to describe the irreconcilable conflicts of interest of
the debtors'; Board of Directors and Senior management, conflicts
that make it impossible for the debtors to exercise any
independent judgment with respect to the proposed insider
releases;

It fails to provide the most fundamental information about the
proposed board composition of the Reorganized debtor, issues of
corporate control, or even the proposed capital structure and
organizational documents of the Reorganized Debtor;

It fails to disclose any of the terms or conditions under which
the debtors propose to award their senior management a multi-
million dollar equity stake of up to 15% of the Reorganized
Debtor; and

It fails to provide any fiscal 1999 information, instead
proposing to leave creditors to vote on the basis of last year's
financial statement.


EATON'S: Pink Slips To Thousands
--------------------------------
Retailer T. Eaton Co., now going through liquidation, said
Tuesday it has laid off or given termination notices to thousands
of employees.

"Those employees whose services will be required during the
liquidation have been advised to continue to report to work
through the notice period," the company announced.

"Those employees whose services will not be required have had
their employment terminated effective immediately."

The once-dominant department store chain, with 64 stores, has
nearly 13,000 employees. It was not clear exactly how many
workers were immediately laid off.

The company also announced the resignation of Brent Ballantyne as
chief executive and president. He will stay on as a director and
chairman.

Also Tuesday, trading in Eaton shares was halted by the Toronto
Stock Exchange due to "failure to meet continued listing
requirements."

The shares -- valued at more than $15 each when the chain went
public in 1998 -- had lost 31 cents to close at 40 cents in
trading of more than 1.5 million shares Monday.

Eaton's said after an insolvency hearing Monday that a sell-off
of its inventory will now start in all its stores.

"Our management team is also continuing to explore all
alternatives in order to preserve as much value for its
stakeholders as possible," Ballantyne said after an Ontario
Superior Court judge appointed a receiver and approved the
liquidation.

With the chain $329 million in debt, Richter Partners of Montreal
was appointed interim receiver while Gordon Brothers Retail
Partners of Boston will liquidate the company's goods.

"This is designed to protect the greater body of creditors and
employees," Eaton's lawyer Gordon Marantz of Osler, Hoskin &
Harcourt told Justice James Farley.

Also Monday, the insolvent retailer's biggest recent lender
unloaded a huge debt.

GE Capital sold a $190-million Eaton's debt to Retail Funding, a
company related to Gordon Brothers, the judge was told.


FEDCO: Seeks Approval of Dayton Hudson Agreement
------------------------------------------------
The debtor, Federal Employees' Distributing Company, d/b/a FEDCO,
Inc. seeks court approval of a certain Asset Purchase and Sale
Agreement between the debtor and Dayton Hudson Corporation
authorizing the sale of the debtor's leases, and
the right to use the debtor's membership list.

The debtor's financial advisor Salomon Smith Barney, Inc. and the
debtor conducted an extensive auction process before the
commencement of this Chapter 11 case, during which numerous
potential bidders performed due diligence and had
an opportunity to submit bids for the purchase of all or
substantially all of the debtor's assets.

A purchase price of $119,500,000 is provided plus a $4.5 million
price premium if the court approves the agreement. Dayton Hudson
is entitled to a $2 million break-up fee.


FILENE'S BASEMENT: Interim Approval For Special Credit Line
-----------------------------------------------------------
A day after filing for Chapter 11 protection, Filene's Basement
Corp. has received interim approval from the U.S. Bankruptcy
Court for a special credit line that should help get more
merchandise into its stores.

With $135 million in debtor-in-possession financing, Filene's
Basement now looks to clear the first hurdle on its comeback
trail -- convincing vendors to resume shipments of goods to its
stores without insisting on upfront payments.

Afraid they wouldn't be paid, vendors stopped shipping
merchandise in the last month. That forced the Boston retail
legend to file for Chapter 11 bankruptcy protection Monday.

The credit line granted to the company Tuesday should ease short-
term cash-flow problems.

Plans call for Filene's Basement chairman Sam Gerson to visit New
York in an effort to win back the support of the chain's vendors,
the company's public relations firm said.

In theory, the credit line that was approved for Filene's
Basement Tuesday should allay vendors' concerns, but it doesn't
always work out that way.

"Will vendors open their credit lines? That's the first hurdle,"
said Stuart Hirschfield, chairman of the bankruptcy group at
Dewey Ballantine LLP, the New York law firm that helped Bradlees
Inc. navigate Chapter 11."You're going to know that within the
first 30 to 60 days. If you can't get over that hurdle, you
can really strain your cash flow."

At least one vendor said it was willing to resume shipments.

"We'd certainly ship to them again," said Morty Holtzman, a
principal in Harve Bernard Ltd. of New York, which has supplied
Filene's Basement with coats and sportswear for about 20 years.
According to documents filed in U.S. Bankruptcy Court in Boston,
Filene's Basement owes Harve Bernard about $470,000.
Holtzman said he is impressed by Filene's Basement's new Aisle 3
chain of warehouse stores that open only on weekends, though he
frets that the company may have launched Aisle 3 too late.

"Our gut feeling is that Aisle 3 is a home run," he said.

Filene's Basement operates four Aisle 3 stores, and another four
are set to open shortly.  Besides its famous flagship store at
Downtown Crossing in Boston, the company operates 50 stores under
the Filene's Basement name. It's likely that the company will
close some stores, but it's too early to predict which ones and
how many. (Boston Globe 25-Aug-99)


FILENE'S BASEMENT: Jones Apparel and Nike Among Creditors
---------------------------------------------------------
Jones Apparel, Saks Fifth Avenue and Nike are Among Filene's
Basement Creditors. Filene's Basement Inc., Wellesley, Mass.,
reported assets of slightly more than $200 million and
liabilities of $148.7 million, the company said it filed for
bankruptcy protection because it was unable to keep its stores
stocked with inventory because suppliers had cut off shipments.
The largest creditors is JDA Software Inc., which has an $867,790
disputed claim, according to court documents. Saks Inc.'s Saks
Fifth Avenue line is owed $577,853, Liz Claiborne is owed
$401,251, Warnaco Group Inc. is owed $383,442. Jones, which sells
clothes under the Jones New York label, is owed $798,584, while
Nike has a claim for $648,787. (ABI 25-Aug-99)


FIRST UNION REAL ESTATE: Seeks Approval To Sell Company Property
----------------------------------------------------------------
First Union Real Estate Equity and Mortgage Investments, a trust
organized in Ohio, will hold a special meeting of beneficiaries,
at 10:00 a.m., date and place yet to be announced.   The purpose
of the meeting will be to gain consent to the sale of certain
properties of the company contained in a Purchase and
Sale Agreement, dated July 14, 1999, and amended by a letter
agreement, dated August 11, 1999, between Southwest Shopping
Centers Co. II, L.L.C., a Delaware limited liability company and
an indirect wholly-owned subsidiary of the company, and WXI/Z
Southwest Malls Real Estate Limited Partnership, a Delaware
limited partnership.  The agreed upon purchase price is
$191.5 million. Further, beneficiaries will be asked to approve
amendments to the company's Amended Declaration of Trust
relating to the company's ability to engage in certain activities
in connection with the investment and financing of company assets
and to effectuate a reverse or forward split of shares of
beneficial interest, of the company.

Consent to the Purchase and Sale Agreement requires the
affirmative vote of holders of a majority of the outstanding
shares. The Board of Trustees of the company is seeking
beneficiary consent to the asset sale in accordance
with the company's Amended Declaration of Trust, which provides
that no sale of more than 50% of the company's property may be
made without the consent of holders of at least a majority of the
outstanding shares.

The asset sale, together with prior asset sales that were part of
a sales program initiated by the company in June 1998, would, in
the aggregate, constitute a sale by the company of more than 50%
of the company's property.

Concurrently with the execution of the Purchase and Sale
Agreement, beneficiaries who own, in the aggregate, approximately
20.11% of the outstanding shares, agreed to consent to the sale
of the properties under the Purchase and Sale Agreement.  
Approval of each of the amendments requires the affirmative
vote of holders of a majority of the outstanding Shares.

Full text of the agreement and amendments can be accessed at
http://www.sec.gov/cgi-bin/srch-edgar?0000895345-99-000463,free  
of charge, on the Internet.


FOAMEX INTERNATIONAL: Class Action Suit Filed
---------------------------------------------
On August 13, 1999 a purported class action complaint, the
"Watchung Complaint", was filed in the Court of Chancery for the
State of Delaware, Newcastle County by shareholders Watchung Road
Associates, L.P. and Pyramid Trading Limited Partnership naming
Foamex International Inc., a Delaware corporation, Mr.
Marshall Cogan, Mr. Etienne Davignon, Mr. John Gutfreund, Mr.
Robert Hay, Dr. Stuart Hershon, Mr. John Johnson, and Mr. John
Tunney as defendants.  The Watchung Complaint alleges that the
individual defendants breached their fiduciary duties when they
agreed to the buy-out of the company by Sorgenti Chemical
Industries, Inc., LLC, a Delaware limited liability
company, and Liberty Partners, L.P., a Delaware limited
partnership.

The Watchung Complaint alleges that the price of $11.50 per
outstanding share offered by Sorgenti and Liberty is inadequate
and fails to take into consideration claims the company is
alleged to have as a result of purportedly wrongful diversions of
company assets in a variety of transactions between the
company or its affiliates and Trace International Holdings, Inc.,
a Delaware corporation, Mr. Marshall Cogan, or their
affiliates. The Watchung Complaint also alleges that the
individual defendants breached their fiduciary duties in agreeing
to a buy-out by Sorgenti and Liberty without making an effort to
obtain the best offer possible for the shareholders.

Foamex International Inc. and the individual defendants deny that
they have committed any breaches of duty to the Watchung
Plaintiffs or to the purported class, and intend to vigorously
defend the suit.


FORMAN PETROLEUM: Files Chapter 11
----------------------------------
The Oil Daily reports on August 10, 1999 that after months of
negotiations with creditors, Forman Petroleum Corp. filed
Friday for relief under Chapter 11 of the U.S. Bankruptcy Code.

The petition was filed in New Orleans in the Bankruptcy Court of
the Eastern District of Louisiana.  The company said it expects
to file within five days a joint plan of reorganization that will
cancel all currently issued and outstanding common stock and
convert 13.5% senior secured notes and Series A preferred stock
into new shares of common stock.


FRANKEL'S: Seeks Order Compelling Performance by Scotty's
---------------------------------------------------------
A hearing will be held on September 16, 1999 on the debtor's
motion for an order compelling the performance by Scotty's Inc.
of a certain Asset Purchase Agreement.

The debtor, Frankel's Home Furnishings, Inc. is a wholly-owned
subsidiary of IDL Holding Corp.

The debtor and Scotty's agree that the debtor is due an
additional $282,950 from Scotty's toward the purchase price under
the Asset Purchase Agreement.  Scotty's has asserted a claim in
the amount of $325,000 allegedly arising from the termination of
the prior License Agreements, as a set-off against the purchase
price.  This alleged set-off supposedly represents possible
increased advertising costs which Scotty's may incur in the
future as a result of Frankel's going out of business.

Without a specific agreement, the debtors argue that Scotty's has
unilaterally attempted to elevate an alleged pre-petition,
unliquidated claim for breach of the License Agreements to the
status of a post-petition administrative claim, and then to set
its alleged claim off against the balance of the purchase price
admittedly owing to the debtor under the Asset Purchase
Agreement.  The debtor complains that Scotty's attempt to charge
the debtor's estate for hypothetical future advertising expenses
is not authorized by the terms of the Asset Purchase
Agreement.


GENESIS PHYSICIANS: Seeks to Terminate Contracts
------------------------------------------------
Genesis Physicians Practice Association, a Dallas-based
physicians' group which filed for bankruptcy late last month,
will seek the bankruptcy court's approval next week to terminate
its contracts with Prudential HealthCare and PacifiCare
of Texas, The Dallas Morning News reported today. Insurance
officials are angered that some doctors in the group are already
turning away new patients and asking current patients to delay
routine medical visits. Prudential's North Texas Division Vice
President Carl King said "HMOs have long advocated preventive
care and annual physicals, so delay flies in the face of
everything that we stand for." Prudential has received some 15 to
20 complaints from patients about the lack of access to care. Dr.
Allen Pearlman, an internist, has asked patients to postpone
annual physicals until payment arrangements are resolved with
insurers. He said, "Everybody has an obligation to continue care
under the bankruptcy, but there's a limit. We've lost thousands
and thousands of dollars that we will never see again. You're
trying not to add to that. We've had no problems from our
patients. They understand things completely." Genesis'
liabilities exceeded assets by at least $7 million, and since its
filing, it has attempted to quantify its exact losses and
restructure contracts with local health maintenance
organizations. (ABI 25-Aug-99)


HECHINGER: Committee Taps Blackstone Group
------------------------------------------
The Official Committee of Unsecured Creditors seek court approval
authorizing the employment and retention of the Blackstone Group
LP effective as of August 2, 1999 as investment bankers and
financial advisors to the committee.

Among other things, the firm will be responsible:

To review the business of the company with emphasis on the near
and long-term business plan and related financial projections
prepared by the debtors;

Analyze, on a limited basis, the financial liquidity of the
debtors;

Evaluate potential reorganization alternatives considering the
debtors' operating prospects and financial liquidity;

Contact third parties to solicit interest in acquiring the
debtors, or all or substantially all of the assets of the
debtors;

Contact third parties to solicit interest in providing debt
and/or equity capital to the debtors in connection with or
outside of a plan of reorganization;

Explore alternative strategies for a stand-alone business;

Review and analyze any transaction or plan of reorganization;

Assist and advise the committee in negotiations concerning the
terms, conditions and impact of any proposed plan of
reorganization;

Attend and assist at meetings with the committee, counsel, the
debtors and other parties in interest;

Valuation of the debtors and of any securities to be issued as
part of any proposed plan of reorganization;

As consideration for its services, Blackstone has requested a
monthly fee of $100,000.  Blackstone requests that the debtors'
estates indemnify and hold harmless Blackstone from and against
any losses, claims, damages, expenses, and liabilities arising
out of or in connection with the engagement except to the
extent that a court determines that such losses etc. primarily
resulted from the gross negligence or willful misconduct of
Blackstone.


H.O.L.A. Recordings: Case Summary & 20 Largest Creditors
--------------------------------------------------------
Debtor:
H.O.L.A. Recordings LLC
235 Park Avenue South, 10th Floor
New York NY 10003

Debtor's Counsel:

Ira L. Herman
Herzfeld & Rubin, P.C.
40 Wall Street
New York, NY 10005
(212) 344-5500

Date Filed: 08/17/99  Chapter 11  Case Number: 99-45100

Court: Southern District of New York

Type of Business: Record company - Produces recordings by
artists, and
marketing, licensing and promoting such recordings.

Assets: $2,412,641
Liabilities: $6,6113,406

Fixed Liquidated Secured Debt $2,875,809 - 3 holders
Fixed Liquidated Unsecured Debt $2,420,837 - 200 holders
Unliquidated Unsecured Debt $1.35 million - 1 holder
Disputed Unsecured Claims - $20,760 - 1 holder

Creditors Holding 20 Largest Unsecured Claims:

Name                              Nature         Amount
----                              ------         ------
ADW Communications            Trade Debt         20,760
Abbrcadabra Advertising       Trade Debt         19,168
Absolute Audio, Inc.          Trade Debt         13,271
American Express              Trade Debt         10,802
BPI Communications            Trade Debt         12,842
Benton-NYCE                   Trade Debt          9,221
Davis & Gilbert               Trade Debt         17,719
Ernst & Young LLP             Trade Debt         28,525
Frankford/Wayne
Mastering Labs                Trade Debt         13,340
Grubman Indursky Schindler    Trade Debt         80,703                             
Impressions                   Trade Debt         10,000
John Vargas                   Trade Debt         13,220
Mirror Image Recorders        Trade Debt         48,861
Newmark Communications        Trade Debt        102,470
Red Ant                       Trade Debt      1,350,000
SOL Concepts                  Trade Debt         13,401
Sal Soul                      Trade Debt         10,255
Stone Jam Music Inc.          Trade Debt         30,000
The Gavin Report              Trade Debt         10,665
WWW Association               Trade Debt         40,534


LOEWEN: Committee Taps Professionals
------------------------------------
The Official Committee of Unsecured Creditors seeks the Court's
authority to employ the Wilmington-based law firm of Young,
Conaway, Stargatt & Taylor as local bankruptcy counsel.  

(a) provide legal advice with respect to the Committee's powers
and duties;

(b) assist the Committee in evaluating the legal basis for, and
effect of, the various pleadings that will be filed by the Debtor
and other parties in interest in this case;

(c) investigate the acts, conduct, assets, liabilities, and
financial condition of the Debtor;

(d) assist the Committee in evaluating the Debtor's plan of
reorganization and any associated disclosure statement;

(e) consult with the Debtor concerning administration of the
case;

(f) commence and prosecute any and all necessary and appropriate
actions and/or proceedings on behalf of the Committee in this
case;

(g) appear in Court to protect the interests of the Committee;
and

(h) perform all other legal services for the Committee which may
be necessary and proper in this chapter 11 case.

YCS&T proposes to charge the Debtors' estates $95 to $365 per
hour for work
performed by its attorneys and paraprofessionals.  The attorneys
and paralegals
presently designated to represent the Committee and their current
standard
hourly rates are:

           (a) Laura D. Jones                 $365 per hour
           (b) Maureen D. Luke                $260 per hour
           (c) Kathe Finlayson                $105 per hour


The Committee also proposed to Employ PricewaterhouseCoopers LLP
as Committee accountants to:

(a) advise and assist the Committee in its examination, analysis
and monitoring of the Debtors' historical, current and projected
financial affairs;

(b) advise and assist the Committee in its review of the Debtors'
existing and proposed systems and controls, including but not
limited to organizational structure, cash management and
management information and reporting systems;

(c) advise and assist the Committee in developing and negotiating
any plan of reorganization scenarios including, as necessary,
certain information to be included in the disclosure statement;

(d) advise and assist the Committee in preparing or reviewing
strategic options, business plans and financial projections;

(e) advise and assist the Committee in reviewing executory
contracts and provide recommendations to assume or reject;

(f) Advise and assist the committee in its assessment of the
management team, including a review of the bonus, incentive and
retention plans;

(g) advise and assist the Committee to review and evaluate the
claims process;

(h) advise and assist the Committee regarding various
reorganization tax issues, including calculating net operating
loss carryforwards, and the tax consequences of any proposed
plans of reorganization;

(i) attend Committee meetings and court hearings as may be
required in their role as accountants to the Committee;

(j) render expert testimony and litigation support services, as
requested from time to time by the Committee and its counsel,
regarding valuations, appraisals and/or the feasibility of a plan
of reorganization and other matters;

(k) advise and assist the Committee in identifying or reviewing
debtor-in-possession financing;

(l) advise and assist the Committee in identifying and/or
reviewing preference payments, fraudulent conveyances and other
causes of action;

(m) advise and assist the Committee in reviewing any proposed
sales of assets or business units; and

(n) assist with such other accounting and financial advisory
services as may be requested by the Committee and its counsel.

Prior to the Petition Date, on or about May 21, 1999, PwC was
retained as accountants by Hebb & Gitlin in their capacity as
counsel to the Ad Hoc Committee of Senior Secured Debtholders,
holding, as of the Petition Date, more than $1.3 billion of
Loewen's approximately $1.7 billion of public and private
debt securities.  Teachers Insurance and Annuity Association
of America, Magten Asset Management Corporation, Allied Capital,
CalPERS, and State Street Bank & Trust Company are five of the Ad
Hoc Committee members who are presently members of the Creditors'
Committee.

In connection with its work for the Ad Hoc Committee, PwC
received a $75,000 retainer from the Debtors.  PwC applied the
Retainer against $68,665 in fees and expenses incurred for the
period through and including May 31, 1999.  Accordingly, as of
the Petition Date, PwC holds the balance of the retainer in
trust for the Debtors.  PwC will not apply any portion of the
Retainer to fees and expenses incurred from and after the
Petition Date unless and until authorized to do so by a further
order of this Court.

PwC proposes to charge its customary hourly rates for services
provided to the Committee:

Partner                         US$ 490-540      Cdn$ 400-475
Director/VP                     US$ 450          Cdn$ 275-325
Manager                         US$ 360-380      Cdn$ 225
Senior Associate                US$ 270-285      Cdn$ 175-200
Associate                       US$ 195          Cdn$ 125-150
Analyst                         US$ 90-140       N/A
Support                         US$ 85           Cdn$ 90

Without objection, Judge Walsh Approved PwC's retention, nunc pro
tunc to the date on which the United States Trustee appointed the
Committee. (Loewen Bankruptcy News Issue 9; Bankruptcy Creditors'
Service Inc.)


LL KNICKERBOCKER: Involuntary Petition Filed; Stock De-Listed
--------------------------------------------------------------
The L. L. Knickerbocker Co., Inc. (Nasdaq: KNIC) announced today
that the Company has received notification from the Nasdaq
Listing Qualifications Panel that the Company's common stock has
been delisted from the Nasdaq National Market effective with the
close of business on August 24, 1999.  The Nasdaq Listing and
Hearing Review Council may, on its own motion, determine to
review the Panel's decision within 45 calendar days after the
issuance of the decision. If the Review Council determines to
review the Panel's decision, it may affirm, modify, reverse,
dismiss or remand the decision to the Panel.  Within 15 days of
the Panel's decision, the Company also may request that the
Review Council review the Panel's decision.  The Review Council's
review of the Panel's decision will not operate as a stay of the
decision.  Although the Company's common stock will be delisted
from the Nasdaq National Market, to the extent market makers in
the Company's stock continue to enter bids, the Company's
common stock will be quoted in the OTC Bulletin Board or, in the
alternative, in the National Quotation Bureau's Pink Sheets.  
However, there is no assurance that this will occur.

The Company also reported that it has been informed that an
involuntary petition in bankruptcy has been filed against the
Company by three of its Asian creditors.  The Company currently
is evaluating its options in responding to the petition, which
include opposing the petition.  The Company has been and will
continue to attempt to restructure its obligations out
of court.  The L. L. Knickerbocker Co., Inc. sells collectible
gifts and toy-related merchandise, primarily porcelain and vinyl
dolls and teddy bears.  The Company also designs, manufactures
and markets fashion jewelry and accessories, in addition to
offering an extensive line of fine jewelry products and supplying
other jewelry manufacturers with loose cut stones.  The Company's
products are sold through diverse international distribution
channels, including its own web sites, television shopping
outlets, direct response sales and wholesale sales to
retailers.  The Company also holds a substantial equity interest
in Pure Energy Corporation, a privately held company, and in
Ontro, Inc., a publicly held company.  For more information,
visit the Company's website at www.knickerbocker.com.


LLOYD'S SHOPPING: Seeks Extension of Exclusivity
------------------------------------------------
The debtor, Lloyd's Shopping Centers, Inc. seeks an extension of
sixty days of the periods during which the debtor shall have the
exclusive right to file a plan of reorganization and solicit
acceptances thereof. The extended Exclusivity Period and the
Acceptance Period will continue through and including November
12, 1999 and January 14, 2000 respectively.

On July 30, 1999, the Trustee appointed a new committee comprised
of three members, none of whom had been on the first committee
which was disbanded. The Committee is planning its organizational
meeting during the last week of August.

In view of the fact that the Exclusivity Period will expire on
September 10, 1999, the debtor claims that there clearly will not
be sufficient time for the debtor and the Committee to negotiate
a consensual plan before then.  For all of the reasons advanced,
the debtor submits that a 60-day extension of the Exclusivity
Period and the Acceptance Period is warranted and reasonable.


NEWCARE HEALTH: Bill Brandt Appointed Examiner With Broad Powers  
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts last
Friday entered a stipulated order directing the U.S. Trustee to
appoint a chapter 11 Examiner in the case of Newcare Health
Corp. The court's order came in response to motions by the U.S.
Trustee and Newcare's official committee of unsecured creditors.
Pursuant to the court's order, the U.S. Trustee appointed
William Brandt of Development Specialists Inc. as examiner with
expanded powers to oversee the jointly administered chapter 11
cases. (The Daily Bankruptcy Review and ABI August 25, 1999)


NEXTWAVE: Sprint Expresses Interest in C-Block PCS Licenses  
-----------------------------------------------------------
Spring PCS is interested in acquiring C-Block PCSlicenses from
bankrupt NextWave Communications, if the Federal Communications
Commission (FCC) changes its rules, as suggested by its agreement
with Nextel, according to Washington Telecom Newswire. Sprint
said that if the FCC is changing the very specific rules, then it
should do so for all larger wireless customers. The company will
work to ensure that its interests are protected and that it has
the opportunity to acquire additional spectrum if it becomes
available to large carriers. Last week Nextel announced
an agreement with the FCC and the Department of Justice to
acquire the NextWave licenses for $2.1 billion. Meanwhile, BFD
Holdings, a major creditor in the bankruptcy case, reaffirmed its
support for the company's reorganization plan and called Nextel's
deal with the FCC "misleading" and an effort to "stall the
bankruptcy." BFD said the plan pending in court is fair and
reasonable, but that it is concerned that the purpose of the
FCC-DOJ-Nextel agreement may be to stall or derail NextWave's
plan. NextWave said this week that it has agreed with Nextel to
extend until Sept. 9 a temporary restraining order barring
Nextel from discussing the deal. NextWave bid $4.7 billion at an
FCC auction for the licenses, but it has been unable to finance
its build out and filed for bankruptcy protection. (ABI 25-Aug-
99)


PRIMARY HEALTH: Court Approves Extra $3 Million
-----------------------------------------------
Crain's Cleveland Business reports on August 2, 1999
that the owner of four greater Cleveland hospitals were facing a
critical cash shortage, and received $ 3.2 million in additional
financing last week.

The extra money for Primary Health Systems Inc. was approved on
July 28 by the U.S. Bankruptcy Court in Wilmington, Del. PHS has
been operating under Chapter 11 bankruptcy protection since March
17. It owns PHS Mt. Sinai Medical Center, PHS Saint Michael
Hospital, PHS Deaconess Hospital, all in Cleveland;
and PHS Mt. Sinai East Hospital in Richmond Heights.

Had PHS not received the additional money, it would have had to
liquidate its operations "putting the lives of the parties in the
debtors' hospitals in jeopardy," according to a motion filed by
PHS on July 21.

The filing also noted that the PHS hospitals have "achieved
substantial success in implementing their business plan,
stabilizing their business operations, maintaining critical
business relationships and gathering public support for
their reorganization."

Despite those optimistic words, PHS lost $ 12.2 million on
revenues of $42.26 million between March 17, the date it filed
for Chapter 11, and May 31, according to PHS financial records
filed with the court last month. It had an
operating loss of $ 4.67 million in that period.

In the first five months of 1999, PHS had an operating loss of
$12.36 million, compared with an operating loss of $ 9 million in
the like period of 1998, according to the financial records.

The additional financing provided by First Union National Bank of
Charlotte, N.C., and Key Corporate Capital Inc., a division of
KeyCorp, brings the total amount of loans extended to PHS by the
two lenders to $ 26.5 million. When it filed for Chapter 11, the
Wayne, Pa.-based company listed assets of $157 million
and liabilities of $ 237 million.

Despite the additional financing, PHS isn't done negotiating with
its bankers. Its present debt deal expires Aug. 24. Kevin
Barrett, an attorney with Gibson, Dunn & Crutcher, a New York law
firm representing PHS, said he expects a new debt deal will be
worked out.

Mr. Barrett said the reorganization of PHS "is moving along on
course." However, PHS has no timetable to propose a
reorganization plan that would detail how it intends to pay its
creditors, he said.

PHS asked the court for permission to borrow the additional money
because of a cash squeeze caused by delayed payments from
insurance companies and an earlier-than-expected assessment by
the Ohio Care Assurance Program, according to its
filing.

The Care Assurance program collects a tax from Ohio hospitals and
redistributes the money to hospitals based on the amount of
indigent care they provide. Typically, hospitals have been
assessed their first quarterly contribution in mid-August, but
this year the date was moved up to July 30. PHS was to pay its
first installment of $ 2.2 million by last Friday, July 30.

Because PHS provides so much care to the poor, it is expected to
receive $5.5 million from the Care Assurance program. But that
payment isn't expected until Aug. 20, according to the filing.

PHS also had cash flow problems because of computer problems
experienced by a billing service PHS subcontracted with to send
bills to insurance companies.

"While the debtors and the subcontractor are in the process of
rectifying this problem, it has caused a serious disruption in
the (PHS) cash flow," according to the July 21 filing.


PLANET HOLLYWOOD: Noteholders Accept Pre-packaged Plan
------------------------------------------------------
A subcommittee of certain noteholders for Planet Hollywood
International Inc. has accepted the company's plan of
reorganization, according to Reuters. The Orlando, Fla.-based
restaurant chain last week announced that it will file a
pre-packaged chapter 11 and that it was soliciting support from
the holders of more than $160 million of its $250 million senior
subordinate notes due in 2005. Last week the company announced
that it had secured $30 million in working capital and was
negotiating with lenders about its planned chapter 11 fling.
(ABI 25-Aug-99)


PROGEN TECHNOLOGY: Trustee Seeks Authority For Liquidation
----------------------------------------------------------
Chapter 7 Trustee, John M. Wolfe seeks court authority to employ
and pay compensation of the proposed Liquidation Agent to market
all personal property assets and real property lease for the
debtor's business premises, for private sale for a period of
thirty days.  If an over is not received, the Liquidation
Agent may then conduct an auction sale of the personal property
assets.

The assets to be liquidated consist of the leased Santa Fe
Property, the debtor's inventory and the debtor's FF&E.  BestLink
Systems, Inc. has asserted a blanket lien security interest in
all of the debtor's assets, including the inventory, FF&E, the
debtor's cash on hand, accounts receivable and other intangible
assets, including a tax refund.  The debtor listed the amount
owing to BestLink at approximately $5.6 million.

Pioneer standard Electronics, Inc. asserted a purchase money
security interest with respect to certain of the debtor's assets,
including cash on hand and the debtor's inventory.  In its
bankruptcy schedules, the debtor listed the amount owing to
Pioneer at approximately $8 million.  Pioneer has not asserted a
security interest in the FF&E.

The Liquidation Agent has advised the Trustee that the
liquidation of the debtor's inventory and certain shelving may
generate gross proceeds of approximately $857,000 to $1.5
million.  The Trustee proposes to employ Credit Managers
Association of California, Asset Liquidation Division, and Dove
Brothers LLC as his liquidation agent to market the lease for the
Santa Fe property, inventory and FF&E for 30 days.


SIZZLER: Accelerated Growth Plan Announced By Company
-----------------------------------------------------
Sizzler International announced at its annual meeting of
shareholders a multi-part, company-wide plan that management
believes will accelerate financial growth.

The short-term strategy was presented by a new management team
headed by Charles L. Boppell, who took over as President and
Chief Executive Officer of Sizzler after growing such restaurant
systems as La Salsa, Hudson's Grill and Taco Bell.

Boppell said the plan is based on what he called "a more
strategic use of our assets."  He said, "Sizzler is an excellent
platform for growth because we have a proven, profitable
operating infrastructure and the ability to get a much
higher return from our existing assets. Add to that at least one
successful new restaurant concept that we will look to acquire
and you have an exceptional growth opportunity. What we are
announcing today is a plan to capture this opportunity through a
more strategic use of our assets."

The plan will be funded in part by more than $40 million raised
from the sale and leaseback of company real estate in Australia,
primarily the restaurants housing the corporation's KFC
franchises in Queensland, Australia. Current cash
flow and other financing resources will also be used to fund
these growth opportunities, according to Boppell. This real
estate transaction should be substantially implemented within the
next three months.

"Raising cash by reallocating assets from foreign real estate to
domestic investments are not the only ways to make our resources
work harder. We have great unused capacity in many existing
domestic and international restaurants; we have the leading
market position in many locations that we can use to
introduce other sources of revenue; and we have a great body of
expertise to select and roll out new concepts. We expect all of
these to make a more powerful contribution in the future,"
Boppell said.

The new Sizzler plan reorganizes the company into four areas,
each of which is expected by the company to produce financial
growth. The company has begun investigating a number of promising
restaurant concepts and will be examining others as part of an
active new restaurant concept acquisition program. The
objective is to acquire and then begin expanding one new
restaurant concept in the near future.

To help accomplish this goal Sizzler has retained the J. H.
Chapman Company, which has been involved in the identification
and acquisition of new restaurant concepts for 17 years and
specializes in transactions in the $10 to $250 million
range.

The company presently owns 66 Sizzler restaurants and franchisees
operate another 200 in the United States. This system is
currently profitable and enjoyed a same store sales increase of
4.9% for the 12 months ended July 25, 1999.  Nevertheless, the
average Sizzler restaurant in the United States still has
considerable capacity for growth.  The plan calls for moving
Sizzler toward a quality grill concept with an excellent salad
bar and away from the buffet court arena. The plan also calls for
remodeling and repositioning domestic Sizzler restaurants
and for beginning to add new franchise restaurants in the U.S.

The company presently owns 30 Sizzler restaurants and 101 KFC
franchises in Australia.  The Sizzler restaurants in Australia
are profitable but also still have substantial unused capacity.
The KFC franchises are among the most financially productive
restaurants in the entire KFC system. The company seeks
to accelerate growth from the KFC restaurants by exploring the
addition of new brands to the existing KFC sites where customer
traffic is already very high and yet additional kitchen capacity
is available.  Growth in Sizzler restaurants is being
stimulated by a remodeling and positioning program similar to
that in the United States.

Sizzler franchisees operate 51 restaurants in Asia, 23 of which
are in Japan. Over the past two years economic weakness in these
markets reduced the contributions from these restaurants and
limited the ability to refresh them at the same time as the U.S.
restaurants.  With the improving economic conditions,
the Asian market has the capacity to substantially increase its
current contribution to Sizzler earnings.

The company expects stronger future contributions from these
restaurants as they undergo renovation and repositioning similar
to the U.S., but tailored to Asian markets. A key to optimizing
this growth strategy is Sizzler's recent establishment of an
Asian management team focusing on Japan.

Boppell told shareholders that while the leveraging of foreign
assets has begun, it would not be finalized until later this
year. As this happens, he plans to consider other capital
strategies, such as a share buyback program, and other
asset divestitures. He said further details in these areas would
be discussed if and when they are finalized.

Boppell concluded his comments with, "Just as the world
approaches the start of a new millennium with new opportunities,
Sizzler too starts afresh with a new management team, from the
Chairman of the Board through senior management, and
with a new approach, driven by a new strategy for growth".


SIZZLER: Former Employee Files $20 Million Lawsuit
--------------------------------------------------
Sizzler International, last week, reported that a lawsuit has
been filed by a former employee seeking in excess of $20 million
in damages against the company, according to Sizzler General
Counsel, Michael B. Green.  The company said it believes the
lawsuit to be without merit and that no further comment on the
litigation would be made. Sizzler also said that it
expects the suit to have no financial impact on the company.


TV FILME: Agreement With Senior Noteholder Committee
----------------------------------------------------
TV Filme, Inc. has reached an agreement in principle with a
committee representing holders of the company's outstanding 12-
7/8% senior notes due 2004. TV Filme, Inc. expects that this
agreement will significantly reduce its existing long-term debt,
and enable the company to continue the build-out of its
recently acquired multipoint, multi-channel distribution
systems licenses. The agreement in principle is subject to
execution of definitive documentation, and is to be effected in
accord with a pre-arranged plan, which will require court
approval under Chapter 11 of the U.S. Bankruptcy
Code.

Hermano Studart Lins de Albuquerque, Chief Executive Officer of
TV Filme, Inc. said,  "We are extremely pleased to announce this
agreement in principle with the bondholder committee.  
Implementation of this agreement will significantly
reduce the company's long-term debt, and allow the company to
capitalize on the many opportunities present in the Brazilian
telecommunications market.  The restructuring will leave our
operations in Brazil on a stronger financial footing to grow."

Mr. Albuquerque emphasized that all of the company's subsidiaries
will be excluded from the pre-arranged plan and there will be no
interruption in their operations, and no impact on their ability
to fulfill commitments to vendors, customers and government
agencies.  "During the restructuring period, our daily
operations will continue as usual and we will continue to provide
our customers with the highest quality of programming, service,
and reliability."

Under the terms of the restructuring agreement, the senior
noteholders will receive a $25 million cash payment and their
existing notes will be converted into New Senior Secured Notes in
the aggregate principal amount of $35 million, with a five year
maturity and interest of 12% per annum interest payable-in-kind  
at the option of the  reorganized company through the first 24
months), and 80% of the new common equity  of the reorganized  
company.  Current management will receive 15% of the new
common equity, and existing common stockholders of TV Filme,  
Inc. will receive 5% of the common equity of the reorganized
company in exchange for their current stake.

Headquartered in Brasilia, Brazil, TV Filme, Inc. is a leading
provider of subscription television, data and internet services
in mid-sized markets in Brazil.  The company has established
wireless cable operating systems in Brasilia, Goiania, Belem and
Campina Grande,  which together comprise over 1.4 million  
households.  Also, the company holds wireless cable licenses
in the cities of Bauru, Caruaru,  Franca, Porto Velho, Presidente
Prudente and Uberaba, which together  comprise nearly 0.4 million
households.


TATHAM: Subsidiaries of Tatham Offshore File Bankruptcy Petition
----------------------------------------------------------------
Subsidiaries of Tatham Offshore have filed for Chapter 11
bankruptcy protection, and one of the companies involved is suing
affiliates of Schlumberger for $51 million in a dispute
involving the management of two offshore rigs.

Last Monday, Rigco North America, FPS VI, FPS III and FPS V -
which collectively own all of the assets of Tatham, a drilling
rig company - filed for Chapter 11 relief in U.S. Bankruptcy
Court in Corpus Christi, Texas. Rigco and FPS VI own two semi-
submersible drilling rigs, the Bill Shoemaker and the Laffit
Pincay, and related assets.

Last month, Rigco filed a suit in District Court in Houston
against Schlumberger Technology and Schlumberger Canada,
following a dispute over Schlumberger affiliate Sedco Forex's
operation of the Shoemaker and Pincay rigs.

The suit alleges gross negligence, breach of contract, fraud,
negligent misrepresentation and negligence, seeking $51 million
in actual damages and unspecified exemplary damages.

A Schlumberger official said attorneys for the company are
reviewing a copy of the suit in order to prepare a response.
"From what we know of the allegations we strongly believe they
are without merit," he said.

Rigco and FPS VI charge in the bankruptcy proceedings that the
Schlumberger's makeover and management contracts for the two rigs
caused the debtors' financial difficulties and forced them to
default on their debt obligations.

Low oil prices have delivered hard times for a number of drilling
rig companies over the last 18 months, causing producers to cut
back drastically on drilling programs. But Jim Wicklund, an
analyst with Dain Rauscher in Dallas, said Tatham Offshore's
problems go deeper than just the usual trouble in the oil patch.

"This is something that's been going on for a while," he said. "A
lot of people thought that because oil prices were going up, that
all the companies that were in trouble would automatically get
out of trouble."

The Tatham affiliates probably will emerge from bankruptcy by
entering into an agreement to swap debt for equity, he said: "In
a favorable environment like we have now, the equity shareholders
will take a haircut and the debt holders will become equity
holders." (Gas Markets Week 16-August-99)


WESTERN DIGITAL: Announces Fourth Quarter, Year End Results
-----------------------------------------------------------
Western Digital Corporation reports revenue of $709.3 million
and a net loss of $101.5 million for its fourth quarter ended
July 3, 1999. The net loss includes a restructuring charge
of approximately $20 million for the sale of the company's
media business to Komag, Inc. Excluding this charge, net loss
would have been $81.5 million. In the year-earlier period,
Western Digital reported revenue of $650.5 million and a net
loss of $162.7 million. The results for the fourth quarter of
1998 included approximately $22 million related principally
to the start of the technology licensing and component supply
agreement with IBM Corporation.

For fiscal 1999, the company reported revenue of $2.8 billion
and a net loss of $492.7 million, compared with a net loss
of $290.2 million, on revenue of $3.5 billion in fiscal
1998. Both fiscal 1998 and 1999 results included previously
announced restructuring and special charges.

Chuck Haggerty, chairman, president and chief executive
officer of Western Digital, said: "The fourth quarter results
reflect the brutal competitive pricing in the desktop hard
drive industry. Nevertheless, our strategy to compete at the
major PC OEMs on the basis of performance, quality and time to
market of our hard drives--and our customer service--produced
a sequential increase in total unit shipments to 5.7 million
in the fourth quarter, compared with 5.1 million units in the
March quarter. Notably, we saw improved performance in our
Enterprise product line, as units, revenue and gross margin
were at their highest levels in three quarters. Continued
improvement and solid new product execution in this area are
key to Western Digital's recovery."

"Our focus will remain on crisp execution of new product plans
in both the desktop and enterprise product lines. Our roadmaps
align very well with our major OEM PC and server customers,
so the opportunity is there to grow the business. In addition,
our efforts to diversify the business model with contributions
from the AV consumer and networked attached storage spaces
are on target for initial revenue by the end of calendar 1999."

Haggerty also noted the company's strong asset management in
the fourth quarter: "Cash for the quarter finished at expected
levels of about $226 million. Our days-sales-outstanding were
at 38 days, a record low level for the company, mostly due to
a refined supply/demand process. Total inventory turns were
19--about four turns better than the March quarter--and our
best performance since Q3 in fiscal 1997."

Western Digital Corporation is a leader in information storage
products and services. The company designs and manufactures
hard drives for personal and enterprise-wide computing, and
markets them to leading systems manufacturers and selected
resellers under the Western Digital brand name.  The company
was founded in 1970 and has long been noted for its storage
and end-market systems-level design knowledge.


WESTERN DIGITAL: Expanding Product Design In Singapore Operation
----------------------------------------------------------------
Dateline: Chai Chee, Singapore - Western Digital Corporation
announced a plan to further develop its Chai Chee, Singapore
facility as a regional technical and manufacturing support
center, focusing its resources on value-added engineering
rather than production volume. The company also indicated
it was accelerating the consolidation of its high-volume
desktop hard drive production in its Kuala Lumpur, Malaysian
facility to improve manufacturing efficiencies and costs,
while focusing its Singapore production resources on desktop
hard drive development and component qualification and on
production of high end WD Enterprise hard drives.

Arif Shakeel, Western Digital's senior vice president of
operations, stated: "The plan announced ..... reflects
a significant move up the value chain for WD Singapore,
applying the accumulated experience of more than 10 years
of hard drive manufacturing to the design, development and
production deployment process. The engineering organization
in Chai Chee has delivered the core controller designs for
WD's MR and GMR desktop product families and is currently
working on the next two generations of products for both the
PC and home entertainment marketplaces. We are expanding the
existing electronics design center and plan to double the
existing staff to accommodate this growth."

Western Digital indicated it is in discussion with the
EDB to add a mechanical product design group in Chai Chee
and to enlarge its existing tooling and process design and
development groups. These advances in Singapore's engineering
role are designed to improve linkage with Western Digital's
predominantly Asian-based supply partners, and speed the
development of new products.

The evolution of the engineering role in the Singapore facility
will complement the previously announced consolidation of
worldwide materials planning and procurement responsibility
in Singapore. The realignment of hard drive manufacturing will
result in a reduction among the production-related Chai Chee
work force. In addition, due to the ongoing improvement in WD
hard drive quality and reliability in the field, the customer
repair center in Chai Chee will also be reduced in size. The
plan announced will be implemented on a phased basis through
December, 1999. It will result in a reduction of approximately
2,000 direct and 500 indirect workers at Chai Chee. Following
these reductions, the WD Chai Chee workforce will include
approximately 1,200 direct and 500 indirect workers.

The first phase is already effective and affects about 300
direct and 25 indirect workers, primarily in the customer
service center. The company has made arrangements, together
with the appropriate Singaporean government agencies, to
provide retraining and placement support to those people
leaving Western Digital.


WESTERN DIGITAL: 2.6 Million Shares Offered at $4.4325303
---------------------------------------------------------
Western Digital Corporation is offering 2,611,809 shares of its
common stock to an institutional investor, details of which can
be found in its prospectus supplement. The common stock will
be purchased at a negotiated purchase price of $4.4325305 per
share. This price reflects the average of recent trading prices
of the company's common stock on the New York Stock Exchange,
net of a 2.75% discount. No commissions or other compensation
will be paid in connection with this sale. The net proceeds
to Western Digital from the offering will be $11,576,923,
and the company indicates it plans to use the net proceeds
for general corporate purposes, including working capital.

Pending use of the net proceeds for any of these purposes,
the company says it may invest in short-term investment grade
instruments, interest-bearing bank accounts, certificates of
deposit, money market securities, U.S.  government securities
or mortgage-backed securities guaranteed by federal agencies.

On August 18, 1999, the last reported sales price of Western
Digital's common stock on the New York Stock Exchange was $5
11/16 per share.  The common stock to be sold will be listed on
the New York Stock Exchange.  As of July 31, 1999 and before
the issuance of these shares there was 93,224,991 shares
of common stock in the company outstanding.  The company
advises that a person should rely only on the information
provided or incorporated by reference in its prospectus
supplement and the prospectus as it has not authorized
anyone else to provide additional or different information.
Interested persons may find the prospectus supplement at
http://www.sec.gov/cgi-bin/srch-edgar?0000892569-99-002309
on the Internet, without cost.


XATA CORP: Changes Accounting Firms
-----------------------------------
On August 13, 1999, XATA Corporation's Board of Directors
determined that it would be in the best interests of the company
to cease the relationship with its independent accounting and
audit firm, McGladrey & Pullen, LLP.  McGladrey acted
as independent accountant and auditors with respect to the
company's financial statements for the previous two fiscal years
ended September 30, 1998. McGladrey's reports on the financial
statements of the company for its fiscal years ended September
30, 1998 and 1997, did not contain any adverse opinion or
disclaimer of opinion. The report of McGladrey on the financial
statements for the fiscal year ended September 30, 1998, did
include an explanatory paragraph regarding the uncertainty of the
company's ability to continue as a going concern.  However,
the company states that the decision to replace McGladrey was
not the result of any disagreement between the company and
McGladrey on any matter of accounting principal or practice,
financial statement disclosure or audit procedure nor any
dispute with respect to the company's ability to continue as a
"going concern."

On August 13, 1999, Grant Thornton LLP was selected by
the company's Board of Directors, upon the recommendation
of its audit committee, as the company's new independent
accountant and audit firm.  Grant will audit the company's
financial statements for the fiscal year ending September 30,
1999. The company intends to have Grant continue to serve as
its independent accounting and audit firm for the fiscal year
ending September 30, 2000.


ZENITH: From Manufacturer To Marketer
-------------------------------------
On August 24, 1999, the San Jose Mercury News reports that Zenith
Electronics Corp., once an icon of American technology
leadership, took the last major step to regain a shred of its
former glory by reinventing itself as a worldwide marketer -- but
not manufacturer -- of consumer electronics.

But the metamorphosis will come with the taint of bankruptcy.
On Monday, the company filed its long-awaited Chapter 11
bankruptcy reorganization plan. The Glenview, Ill.-based company
hopes to emerge in a matter of months as global sales and
marketing organization without a single manufacturing facility.

If it succeeds, it will surrender any claim to being an American
company, as it will become a wholly owned subsidiary of its
majority shareholder, LG Electronics of South Korea.

Zenith said 97 percent of voting bondholders agreed to the
Prepackaged plan, under which they will exchange their debt for
new debentures.  Zenith shareholders will be left with nothing,
except for LG Electronics, which owns 55 percent of the company
today. The current common stock will be canceled, and LG
Electronics will get 100 percent of new equity issued
in exchange for canceling $200 million of its claims against
Zenith.

Shareholders should not be surprised by news their stock will be
worthless, said Zenith spokesman John Taylor.

Zenith shares, which had been hammered by quarter after quarter
of disappointing performance, nose dived on the New York Stock
Exchange when the company announced its intent to restructure in
April 1998. After years of shedding assets to cut costs in the
face of cheaper foreign products, Zenith essentially
conceded defeat and said it would virtually halt manufacturing
and instead reinvent itself as a sales and marketing company.

A month later, when the company said that restructuring would
have to take the form of a Chapter 11 bankruptcy reorganization,
the stock was delisted by the exchange. It has traded only thinly
since, on Nasdaq's over-the-counter bulletin board, where it
closed Monday unchanged at 19 cents.  Originally, Zenith said it
wanted to file a prepackaged plan by the end of 1998. But snags,
mostly in getting through the Securities and Exchange Commission
review process, held things up, Taylor said.

"The good news is that, unlike a traditional kind of Chapter 11,
which can take years, once we've gotten to this point, a
prepackaged plan can be wrapped up in just a matter of months,"
he said.

The current management team, led by Chief Executive Jeffrey P.
Gannon, a veteran General Electric Co. executive, is expected to
remain in place after the company emerges from Chapter 11, Taylor
said.

Just as the Chapter 11 filing culminates the restructuring began
in 1998, that itself represented the end of a decade of cost-
cutting. In the late 1980s, citing "cutthroat foreign
competition," Zenith began cutting jobs and playing
hardball in union negotiations.

That process was accelerated in April 1998 as the company
launched its last-ditch reorganization.

Zenith closed or sold all of its manufacturing facilities except
for a TV assembly plant in Reynosa, Mexico. Last December, Zenith
shuttered its last U.S. manufacturing site -- a picture tube
plant in Melrose Park, Ill. -- wiping out another 2,000 jobs.

As part of the Chapter 11 plan, LG Electronics will assume
ownership of that plant, removing more than 2,000 jobs from
Zenith's payroll.  In less than a decade, Zenith went from a
worldwide payroll of more than 25,000 in 1992 to about 5,000
today. The company seemed a likely candidate to disappear
altogether.  But on Monday, Gannon said the success in getting
creditors to agree to a prepackaged Chapter 11 plan indicates
that the worst days are over.

"Our operational restructuring -- transforming Zenith into a
sales, marketing and technology company -- is proceeding on
schedule," he said.

                   **********

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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- published by
Bankruptcy Creditors' Service, Inc., Princeton, NJ, and Beard
Group, Inc., Washington, DC. Debra Brennan, Yvonne L. Metzler,
Editors.  Copyright 1999. All rights reserved. ISSN 1520-9474.

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