TCR_Public/990827.MBX    T R O U B L E D   C O M P A N Y   R E P O R T E R
        Friday, August 27, 1999, Vol. 3, No. 166                                              

ACCESS BEYOND: Trustee Authorized To Retain Pepper Hamilton
ACME METALS: Order Further Extends Exclusive Periods
AMERICAN GAMING: Reports Sale of Gold Coast Barge
AMERICAN GAMING: Reports Second Quarter Results
ARM FINANCIAL: Without Buyer Going Concern In Doubt

CBS TELENOTICIAS: Lays Off 1/4 of Workers - Files Bankruptcy
CONXUS COMMUNICATIONS: Liquidating After 3 Months
CROWN BOOKS: Confirmation Hearing Set
DOW CORNING: Foreign Claimants Want to Change Their Vote
DOW CORNING: Nevada Claimants File Motion For Sanctions

ELDER BEERMAN: Dissident Shareholder Pushes For Change
EUROWEB: Acquiring Slovakian Networks/1999 Net Losses Reported
FWT,INC: Noteholders Committee Taps Chanin and Company
GIBSON GREETINGS: Company Expects Loss Due To Competition
GOLDEN BOOKS: Montreal Firm To Purchase Printing Business

HARNISCHFEGER: Court Considering the Employ of PwC
HARNISCHFEGER: Seeks To Employ American Appraisal Assoc.
PARAGON: Files Plan of Reorganization
PHONETEL: Too Much Debt and Too Optimistic About Future Revenues
ROYAL KUNIA: Company Owned By Horita Files Chapter 11

RUSSELL CORP: Bottom-line Shows Loss Due To Non-Recurring Charges
SANTA FE GAMING: 66.3% Of Company Owned by Lowden
SILICON GRAPHICS: Chairman and Chief Executive Belluzzo Resigns
SOUTHERN PACIFIC FUNDING: Ocwen Transfer May Set Record
STUART ENTERTAINMENT: Bankruptcy Filed/Plan Outlined

STARTER: Schottenstein Sees Big Dollar Signs
SUCCESS HOLDINGS: Meeting of Creditors
SUN TV: Seeks Order Granting Extension of Exclusivity
THORN APPLE VALLEY: IBP Completes Acquisition
TONI MARONI'S: Files for Chapter 11 Protection  


ACCESS BEYOND: Trustee Authorized To Retain Pepper Hamilton
The US Bankruptcy Court for the District of Delaware entered an
order on August 3, 1999, authorizing the Trustee in the case of  
Access Beyond Technologies, Inc. n/k/a Hayes Corporation (Hong
Kong) Limited, et al. to retain and employ Pepper Hamilton LLP to
represent him during the winding up of these Chapter 11 cases.

ACME METALS: Order Further Extends Exclusive Periods
In the case of Acme Metals Incorporated, and its debtor
affiliates, the US Bankruptcy Court for the District of Delaware
entered an order on August 9, 1999 extending the Exclusive
Proposal Period to and including September 30, 1999 and extending
the Exclusive Solicitation Period to and including November 30,

AMERICAN GAMING: Reports Sale of Gold Coast Barge
American Gaming & Entertainment, Ltd. (the "Company") reported
on Form 8-K that on August 10, 1999, the Company, with the
concurrence of AMGAM Associates ("AMGAM"), American Gaming and
Resorts of Mississippi, Inc. ("AGRM") (each a wholly-owned
subsidiary of the Company), the Committee for the Unsecured
Creditors of AMGAM, the Committee for the Unsecured Creditors of
AGRM, IGT, and Shamrock Holdings Group, Inc. (collectively with
AGEL, the "AGEL Group") sold the Gold Coast Barge to The
President Riverboat Casino-Mississippi, Inc. ("Purchaser").  
Pursuant to the sale agreement (the "Agreement"), the Purchaser
paid $1,000,000 and delivered a promissory note in the amount of
$5,827,500 to the Payment Agent (as defined below).

As previously disclosed in the June 1999 10-Q, an affiliate of
the Purchaser had been chartering the Gold Coast Barge from the
Company and the purchase price for the Gold Coast Barge was
calculated as $5,000,000 plus all remaining charter

As of June 30, 1999, the Company depreciated the Gold Coast Barge
to a book value of $6,827,500. Accordingly, the Company will not
recognize any gain or loss upon the sale.

As previously disclosed in the June 1999 10-Q, Shamrock orally
notified the Company in 1998 that any payments to be disbursed to
the Company and/or Shamrock pursuant to the Plan should be paid
to Shamrock to reduce the Company's indebtedness to Shamrock.  
The Company's Common Stock is traded on the OTC Bulletin Board
under the symbol "AGEL".

AMERICAN GAMING: Reports Second Quarter Results
Aug. 25, 1999--American Gaming & Entertainment, Ltd. reported in
its Form 10-QSB for the period ended June 30, 1999 that net
income for common stockholders for the three months ended June
30, 1999 was approximately $946,000 or $ 0.08 per share as
compared a net loss for common stockholders of $2,410,000 or ($
0.19) per share for the three months ended June 30, 1998, based
upon a weighted average number of 12,532,102 common shares
outstanding for each period.

For the three months ended June 30, 1998, the Company recorded
revenues of approximately $256,000 attributable to its interest
in a riverboat gaming and entertainment complex in Rising Sun,

For the six months ended June 30, 1998, the Company recorded
revenues of approximately $ 445,000 attributable to the Rising
Sun Interest. For the six months ended June 30, 1999, the Company
depreciated the Gold Coast Barge to its purchase price.

ARM FINANCIAL: Without Buyer Going Concern In Doubt
If ARM Financial Group Inc. is unable to find a suitable buyer
for its subsidiaries or its businesses or receive a significant
infusion of capital from investors, the company's ability to
continue as a going concern is in substantial doubt. The company
will not have have adequate levels of capital to service its
obligations, including the $38 million in debt financing and $75
million of preferred stock, without the emergence of a buyer or
investor and, as a result, is exploring all options available to
it, including a possible bankruptcy filing at the holding company
level. (The Daily Bankruptcy Review and ABI - August 26, 1999)

CBS TELENOTICIAS: Lays Off 1/4 of Workers - Files Bankruptcy
CBS Telenoticias, the financially plagued Spanish-and Portuguese-
language news and information network started by CBS but now
controlled by Mexico-based Grupo Medcom, has filed for federal
bankruptcy protection in Miami.  The Chapter 11 reorganization
petition came only days after CBS Telenoticias laid off 77
people, nearly a quarter of its work force.  Earlier reports of
financial trouble included late paychecks, unreimbursed expenses
and disconnected phones in at least one of its bureaus (B&C, July
12). Sources say CBS Telenoticias President Manuel Abud tried to
rally the remaining troops at the announcement of the layoffs and
the bankruptcy.

"[W]e sure that this action will help us in achieving our key
goals of creating a powerful and successful action plan for the
company, and in refocusing our business strategy and operations,"
said Abud. Strategies include trying to do more with less, and
searching for new revenue streams.

The company said it might also look for a new partner, presumably
one with cash. And there had been reports of a possible deal with
Brazilian TV interests prior to the bankruptcy filing. CBS
maintains that as a passive investor, it would be inappropriate
for it to comment.

The round-the-clock Latin American network and programming
service, started by CBS, targeted Spanish-language Latin markets
beginning in 1994, and later added a Portuguese-language service
targeting Brazil. In late 1998, Medcom bought 70% of the network.
Current and former employees trace their problems to CBS'
diminished role, and some have told B&C they are planning or
considering lawsuits for money they say they are owed.

CONXUS COMMUNICATIONS: Liquidating After 3 Months
Communications Daily reports on August 26, 1999, that
Conxus Communications decided to liquidate 3 months after
seeking Chapter 11 reorganization.  As of 5:00 pm on Friday,
their voice mail pagers will no longer be serviced.  The
Pocketalk service was available in Dallas and Fort Worth, San
Francisco, Los Angeles, Philadelphia, Boston, New York,
Washington, Atlanta, Houston, Chicago and some areas in
southern Florida.

The company had earlier arranged more than $135 million in
financing through note sales before seeking Chapter 11protection.  
Originally, it had planned to reorganize and continued to operate
as debtor in possession, arranging financing for continuing
operation.  The FCC, which issued licenses in both PCS and
specialized mobile radio spectrum, is among several key
creditors, along with Arch Communications, Glenayre, Metrocall
and Motorola, which provided Pocketalk customer units.  

The Company, as PCS Development Group-designated entity with 40%
discount, bid $151.5 million for 5 regional licenses in FCC's
narrowband PCS auction in 1994 (CD Nov 9/94 p2). Conxus, which
started service in 1997, reduced work force in April, leaving it
with few employees in key markets, analysts said.  In a speech
last year to a conference on disabilities, FCC Chmn. Kennard
cited Pocketalk as new technology to give disabled people access
to advanced technologies.

CROWN BOOKS: Confirmation Hearing Set
On September 22, 1999, at 10:00 AM a hearing will commence before
the Honorable Roderick R. McKelvie in the J. Caleb Boggs Federal
Building, 844 King Street, Wilmington, Delaware 19801 to consider
confirmation of the First Amended Joint Chapter 11 Plan of
Reorganization.  The plan provides of the distribution of New
Common Stock to holders of Allowed Class 2 Claims and cash to
holders of Allowed 3 Claims.  Under the plan, Class 4 Interests
and Class 5 interests in the debtors will be extinguished.

DOW CORNING: Foreign Claimants Want to Change Their Vote
The Breast Implant Litigation Reporter stated on August 10, 1999
that foreign breast implant claimants from Mexico and Vietnam
have told the U.S. Bankruptcy Court for the Eastern District of
Michigan that Dow Corning Corp. has resolved their objection to
its $4.5 billion reorganization plan.

The movants, 251 from Mexico and 262 from Vietnam, have filed a
motion to change their rejecting votes to accepting votes. Most
foreign claimants fall within Class 6.2, whose members received a
settlement similar to the one made to domestic claimants, except
that the maximum amount of recovery under each option is only 35%
of the amount offered to a domestic claimant.  A majority of the
Class 6.2 claimants voted to accept Dow Corning's reorganization
plan but the class vote as a whole fell short of the two-thirds
vote required by Chapter 11 of the U.S. Code Sec. 1126(d) to
constitute an accepting class. If the court grants the motion,
Class 6.2 converts from a rejecting class to an accepting class.

The movants originally submitted ballots rejecting the plan,
claiming that its product identification requirements were too
stringent for them to meet.  Specifically, they asserted that
because of the paucity of medical records in their countries due
to war or natural disaster, they faced significant obstacles
in satisfying the plan's criteria for proving their breast
implants were manufactured by Dow Corning.

The claimants' representatives, Harold V. Sullivan II of
Torrance, CA, and Francisco Rivera Duarte of Mexico, told
the court in a written objection to Dow Corning's revised
disclosure statement that in Vietnam, most records were destroyed
by war or by the doctors themselves when the communists came to
power in 1975. In Mexico, due to tax concerns of the doctors,
there are scant records as well.

In sum, the foreign claimants in Class 6.2 have been offered a
new "Limited Disease Payment Option" equal to 30% of the amount
payable to a domestic claimant under the Disease Payment Option I
Schedule. Domestic claimants will receive a base payment of
$10,000 for mild disability to $50,000 for the most severe
disability pursuant to Disease Payment Option I. Foreign
claimants in Class 6.2 have the option of electing a limited
expedited payment of $750.

U.S. Bankruptcy Court Judge Arthur J. Spector has held that since
modification of Dow Corning's Chapter 11 reorganization plan does
not adversely change the treatment of the claim of any creditors
within Class 6.2, made up of certain foreign claimants, no
further re-balloting of the class will be ordered and the court
will deem the class to have accepted the plan.

DOW CORNING: Nevada Claimants File Motion For Sanctions
A report in The Breast Implant Litigation Reproter on August 10,
1999 states that breast implant claimants from Nevada have filed
a motion against the joint proponents of Dow Corning Corp.'s
Chapter 11 reorganization plan for sanctions for breach of
applicable rules governing the plan's confirmation
hearing, charging them with contacting one of the women's expert
witnesses and "suggesting or at the very least implying that it
might not be wise or prudent for said expert to testify in the
bankruptcy proceeding."

The Nevada women, who object to the plan's $400 million cap on
litigation funds, identified Dr. Douglas Shanklin on their expert
witness list submitted to the court prior to the plan
confirmation hearing. According to the Nevada objectors, Dr.
Shanklin was prepared to testify about disease causation
related to silicone gel breast implants to establish the
valuation of tort claims. On July 6, during the first week of the
confirmation hearing, Dr. Shanklin reaffirmed his commitment to
testify on their behalf, say the Nevada objectors. One day later,
he notified the objectors' attorneys that he was reluctant to

Dr. Shanklin's reluctance was due to a telephone call allegedly
initiated by the plan proponents' agent, attorney Ernie Hornsby,
the objectors claim.  Hornsby is a friend and colleague of
Shanklin and is also counsel for numerous tort claimants who
support the reorganization plan. It is undisputed that Ed
Blizzard, a representative of the Tort Claimant's Committee,
contacted Hornsby and asked him to call Shanklin. The Nevada
objectors say Hornsby informed Shanklin that "Al Levin, a fellow
sympathetic M.D. breast implant expert, had been 'gagged' by the

The women say Hornsby was referring to U.S. Bankruptcy Court
Judge Arthur J. Spector's July 2 decision that Dr. Levin, who is
also actively participating in the bankruptcy hearing as counsel
for certain Texas claimants, was precluded from testifying on the
merits of the plan. The objectors assert that the call, which
they characterize as "improper and unethical," was made in an
attempt to influence Shanklin's decision to testify.

The Nevada objectors' motion is baseless, say the plan
proponents, who claim that Shanklin never agreed to testify in
the first place and that the motion for sanctions is a ruse to
make a last-minute witness substitution due to the objectors'
inability to garner Shanklin's cooperation.

The women charge the proponents with violations of the ABA Model
Rules of Professional Conduct, "civility principles" established
by the bankruptcy court, the Federal Rules of Civil Procedure,
the U.S. Code and the Disciplinary Rules of the Model Rules of
Professional Conduct.

ELDER BEERMAN: Dissident Shareholder Pushes For Change
The Cincinnati Enquirer reports on August 19, 1999 that
A dissident shareholder of Elder-Beerman Stores Corp. who is
pressuring the company to change management or sell said
Wednesday he has support of the owners of 58 percent of the
retailer's stock.

"I have yet to speak to an institutional or major owner who is
opposed to what I'm trying to do," said David Nierenberg, who
says Dayton-based Elder- Beerman must make dramatic changes to
improve operations. Mr. Nierenberg, through his D3 Family Fund
and some foreign investors, has acquired 5.3 percent of the
shares of the retailer since June. They own 845, 000 shares.
Mr. Nierenberg argues that Elder-Beerman's management has made
numerous mistakes in projecting its earnings expectations and
running the business. Specifically, he said earnings have come in
below expectation in three of the past four quarters and that
store sales have been soft.

In an Aug. 11 filing with the Securities and Exchange Commission,
Mr. Nierenberg said he wanted the company to replace management
or put itself up for sale. Those managers are Chief Executive
Frederick Mershad and President, Chief Financial Officer and
Chief Operating Officer John Muskovich.

On Wednesday Mr. Nierenberg also said he'd be open to other
ideas.   "The company should not continue to be managed on the
same course by the same people any longer," he said. "I'm all
ears (to other notions) but the magnitude of the change in my
opinion has to be dramatic."

Elder-Beerman is not a stranger to financial setbacks. The
company in late 1997 emerged from Chapter 11 bankruptcy
protection after filing in fall 1995. Since then, it acquired
Stone & Thomas department stores, expanded into Pennsylvania for
the first time and it opened its largest store ever in Dayton

EUROWEB: Acquiring Slovakian Networks/1999 Net Losses Reported
Euroweb International Corporation, a Delaware corporation
organized on November 9, 1992,in its financial report for the 3
months ended June 30, 1999 shows consolidated net sales revenue
of $71,528 as compared to $455,100 for the same period in 1998.
Net loss for the second quarter was $232,811 as compared
to the 1998 second quarter net loss of $102,292.  For the
six months ended June 30, 1999 the company sustained a net
loss of $322,955 with no increase of revenue over the second
quarter 1999. For comparison, the six months ended June 30,
1998 showed a net loss of $369,512 on net revenues of $840,000.

For historical perspective it will be remembered the company,
on January 2, 1997, acquired three Hungarian Internet service
companies for a purchase price of approximately $1,913,000. The
company operated the Internet service companies through its
wholly-owned subsidiary, Euroweb Rt.

In July 1999, the company entered into agreements to purchase
the following interests in Internet service providers:
All of the outstanding stock of EUnet Slovakia, located in
the Slovak Republic, for $800,000 consisting of $400,000 in
cash and $400,000 in shares of the company's common stock
(200,000 shares at $2 per share), all of the outstanding stock
of Global Network Services, located in the Slovak Republic,
for $1,200,000 consisting of $700,000 in cash and $500,000
in shares of the company's common stock (250,000 shares at
$2 per share), 80% of the outstanding stock of Bohemia Net,
a.s., located in the Czech Republic, for $1,080,000 consisting
of $530,000 in cash and $550,000 in shares of the company's
common stock (275,000 shares at $2 per share), (The agreement
grants the company an option to purchase the remaining 20% for
$410,000 in cash and $410,000 in shares of the company's common
stock), 70% of the outstanding stock of Dodo, s.r.o. Kosice,
located in the Slovak Republic, for $550,000 consisting of
$350,000 in cash and $200,000 in shares of the company's
common stock (100,000 shares at $2 per share).

As of August 12, 1999, all of the acquisitions described
above are subject to completion of satisfactory due diligence
procedures.  Euroweb International is currently seeking
to acquire other Internet service providers in central and
eastern Europe.

FWT,INC: Noteholders Committee Taps Chanin and Company
The Official Committee of Noteholders of FWT, Inc. seeks
authorization to retain and employ Chanin and Company LLC as its
financial advisors.

The firm will provide the following services:

Advise and assist the committee in its analysis and monitoring of
the debtor's business, operations, properties, financial
condition and prospects;

Advise the Noteholders Committee on the current state of the
restructuring market and assist and advise the committee in
developing a general strategy for accomplishing a proposed

Assist and advise the Noteholders Committee with implementing a
plan of restructuring with the debtor

Assist and advise the Noteholders Committee with developing a
strategy with respect to recapitalization and/or merger and
acquisition options for the debtor;

Negotiate on behalf of the Noteholders Committee nay and all
aspects of the restructuring;

Attend Noteholders Committee meetings and court hearings as may
be required in their role as financial advisors to the
Noteholders Committee; and

Assist with such other merger and acquisition and financial
advisory services as may be requested by the Noteholders
Committee and its counsel.

Chanin requests payment of a work fee of $150,000 plus a
transaction fee at the conclusion of an offer in connection with
a restructuring in an amount equal to 2% of the Recovery.

GIBSON GREETINGS: Company Expects Loss Due To Competition
Gibson Greetings, Inc. operates in a highly competitive
industry dominated by two companies. The company's
mass-merchandiser customer base, which typically operates
on low margins, is particularly susceptible to financial
constraints and to offers of more favorable terms from
competitors of the company which have significantly greater
financial resources. As a result, Gibson Greetings has, for
some time, faced strong competitive pressures with regard to
both price and terms of sale. It is anticipated that these
pressures will continue and contribute to the company reporting
a loss for full-year 1999.

Gibson Greetings is in the process of investing approximately
$35 million to implement a major management information systems
plan to replace core business applications which support
sales and customer services, procurement and manufacturing,
distribution and finance with Enterprise Resource Planning
software. While the primary purpose of the ERP software,
according to Gibson Greetings, is to add functionality and
efficiency to the company's business processes, installation
of the software is also expected to address Year 2000 issues
associated with the software being replaced.

The company reported a net loss in both the second quarter
and six-month period ended June 30, 1999.  Loss for the
quarter was $24,385 on net revenue of $61,030; while in the
six-month period net loss was $27,792 on revenues of $144,498.
In the 1998 second quarter and six-month comparable periods
the company showed a net income of $5,572 in the quarter on
revenues of $104,977, and a net loss of $3,343 on net revenues
of $206,726 in the six-month period.

GOLDEN BOOKS: Montreal Firm To Purchase Printing Business
The Milwaukee Journal Sentinel reports on August 24, 1999 that
Montreal-based Artech Capital plans to purchase a printing
business owned by financially distressed Golden Books Family
Entertainment Inc.

The deal would allow about 200 Golden Books employees in
Sturtevant to retain their jobs and gain a 1% ownership stake in
the operation. The deal calls for Artech to use the facility to
print books for large publishing companies, and it ends months of
uncertainty surrounding the 466,000-square-foot plant and its
employees.  The plant employed about 1,000 people as recently as
three years ago.  Artech, a commercial printing company, has
manufacturing facilities in Canada and France.

"We will use the plant and the employees to focus on the
commercial publishing book business, primarily concentrating on
the large publishers across the U.S. and Europe," said Mark
Patenaude, Artech's chief executive officer.

"We will be adding to our sales force and purchasing a
considerable amount of new equipment."

Financial terms of the sale were not disclosed. The deal must be
approved by the federal bankruptcy court that is reviewing Golden
Books' bankruptcy filing.  Golden Books' general counsel, Philip
Galanes, emphasized that the companies have not reached a final
agreement.  Still, the tentative accord between Golden Books, its
workers and Artech clears the way for the workers to keep their
jobs.  Golden Books filed in February for reorganization under
Chapter 11 of the U.S. Bankruptcy Code. Company executives say
the reorganization should be completed soon.  The company's
Sturtevant printing business is running well below its

All three major printing unions at Golden Books voted for the
deal Friday, with 90% of the workers supporting it, said Madison
labor attorney Ed Garvey, who represented the workers.  Garvey
said the deal would recognize the workers' collective bargaining
agreements with some modifications. The labor package offers
workers the same health insurance, recognizes seniority and gives
the employees 1% of the plant's annual gross profits.

HARNISCHFEGER: Considering the Employ of PwC
In connection with consideration of the Debtors' motion to excuse
PricewaterhouseCoopers' compliance with maintaining strict audit-
related time records, Judge Walsh took the opportunity to talk
about the terms of PwC Securities' engagement.

Judge Walsh observed that the Court was not provided with a copy
of the engagement letter under which PwC Securities is providing
financial advisory services to the Debtors when the Debtors filed
their employment application the first day.  Accordingly, in
light of his recent ruling in In re Dailey International, Inc.,
Case No. 99-1233 (PJW), concerning inappropriate limitations on
liability and overly-broad indemnification provisions sought by
Ernst & Young, Judge Walsh delivered a clear ruling from the
bench advising parties-in-interest that the Court does not
believe it or any party-in-interest is bound by the terms of the
engagement letter to the extent that (i) the engagement letter
purports to limit PwC Securities' liability to the fees it
collects or (ii) the engagement letter contemplates that the
Debtors will indemnify PwC Securities for more than gross
negligence or willful misconduct. (Harnischfeger Bankruptcy News
Issue 10; Bankruptcy Creditors' Service Inc.)

HARNISCHFEGER: Seeks To Employ American Appraisal Assoc.
Nunc pro tunc to August 16, 1999, the Debtors seek the Court's
authority to employ American Appraisal Associates, Inc., to
provide an independent, third-party, objective opinion about the
value of 25 of the Debtors' owned properties located outside of
the United States.  AAA agrees to charge the Debtors a flat
$675,000 fee, approximately $26,000 per property, for its work,
and will bill $225 per hour for attending any conferences,
preparation for court testimony, court appearances, and similar
services outside the scope of preparing its valuation reports.  
(Harnischfeger Bankruptcy News Issue 10; Bankruptcy Creditors'
Service Inc.)

NATIONAL RECORD MART: Annual Meeting Set For September 23rd
The 1999 annual meeting of stockholders of National Record
Mart, Inc. will be held at the James H. Reed Building, 435
Sixth Avenue, Ninth Floor, Pittsburgh, Pennsylvania 15219,
on Thursday, September 23, 1999, at 9:30 a.m. local time.
The company's proxy statement describes the business to
be transacted at the meeting and provides other information
concerning the company. The principal business to be transacted
will be election of four directors, ratification of the grant
of stock options to William A.  Teitelbaum in June 1996 and
July 1997, ratification of the appointment of Ernst & Young
LLP as independent auditors of the company for the fiscal year
ending March 25, 2000 and any other business that may arise.
Only stockholders of record at the close of business on August
2, 1999 are entitled to notice of and to vote at the meeting.

The proxy statement may be found at
on the Internet, free of charge.

PARAGON: Files Plan of Reorganization
Paragon Trade Brands, Inc. (OTC Bulletin Board: PGNFQ) announced
that it filed a stand alone plan of reorganization (the "Plan")on
August 24, 1999, with the United States Bankruptcy Court for the
Northern District of Georgia.  The Plan is supported by the
Official Committee of Unsecured Creditors (the "Creditors'
Committee") of Paragon.  The Plan provides an alternative to the
proposal by Wellspring Capital Management LLC ("Wellspring"), a
private investment company, to acquire Paragon as part of a plan
of reorganization (the "Wellspring Proposal").  The Wellspring
Proposal contemplated that Paragon could simultaneously
prepare and file a stand alone plan of reorganization.

The Plan provides that Paragon's unsecured creditors will
receive a pro rata distribution of notes and new common
stock to be issued by reorganized Paragon and that current
equity will be canceled.  If current shareholders approve
the Plan, they will receive a combination of warrants and
a portion of the proceeds, if any, of claims assigned to
a litigation trust.  The Plan contains provisions typical
of a chapter 11 plan of this nature and provides for new
bank financing for working capital for reorganized Paragon.

Paragon also announced that it is revising its business
plan to reflect second quarter 1999 results and lowered
volume growth expectations for the future. As a result of
Paragon's reforecasting of its business plan, the Plan,
as filed, does not yet specify the amount of value to
be distributed.

On August 19, 1999, Wellspring delivered a commitment
to proceed with the Wellspring Proposal, but Paragon
informed Wellspring that the commitment was not acceptable.
The parties are continuing their negotiations with respect
to this matter.  Paragon stated that it remains committed
to pursuing a transaction with Wellspring while continuing
to welcome other bids in accordance with the Bankruptcy
Court-approved procedures.

Paragon also reported that the Bankruptcy Court last
week granted a limited stay through August 25, 1999 of
Paragon's recently approved settlement agreement with
Kimberly-Clark Corporation ("K-C") pending a ruling by
the District Court on an emergency motion by the Equity
Committee which seeks an 80-day stay of the K-C settlement
pending an appeal.  The parties agreed yesterday to the
District Court's direction that a limited stay remain in
place until September 3, 1999, to allow the District Court
to more fully consider the Equity Committee's motion.
Paragon believes that the granting of the limited stay
by the District Court is a procedural step in the appeal
process that does not alter the substance of the Bankruptcy
Court's August 6, 1999 approval of the K-C settlement.
The Equity Committee has also filed a notice of appeal
of the Bankruptcy Court's August 6, 1999 approval of the
Company's settlement with The Procter & Gamble Company
("P&G").  Paragon believes that both the K-C and the P&G
settlements will be upheld on appeal.

PHONETEL: Too Much Debt and Too Optimistic About Future Revenues
Crain's Cleveland Business reports on August 23, 1999 that
shareholders who bet their dollars on a turnaround at PhoneTel
Technologies Inc. will all but lose their investments under a
plan to reorganize the pay phone company.

As part of the plan, PhoneTel will pay its employees and all its
vendors.  PhoneTel noteholders who control $125 million in debt
will trade in those notes for 9.5 million shares, or 95%, of
fresh common stock that PhoneTel will issue after it emerges from
bankruptcy. The rest of the new common will go to PhoneTel's
management and common and preferred shareholders, who will divvy
up 500,000 shares.

The U.S. Bankruptcy Court in New York still must give its
blessing to the plan, which was negotiated with creditors six
months prior to PhoneTel's July 14 Chapter 11 bankruptcy filing.
A hearing before the court is set for Sept. 2.

In March, PhoneTel had 18.7 million common shares outstanding.
Holders of old PhoneTel common stock will trade in their stock
for markedly fewer shares of the new stock. However, preferred
stockholders will receive 722,200 three-year warrants to buy
PhoneTel stock at $10.50 a share.

If the court approves the plan, the noteholders will elect a new
five-person board, which will include PhoneTel's former chairman,
Peter Graff.

The new board will decide the direction of the company, including
where it will be headquartered and any new management or
operational changes, said Lee Powar, an attorney representing
PhoneTel in the bankruptcy case. Mr. Powar said despite the
bankruptcy, PhoneTel's basic business is sound and is generating
enough cash to keep operations running.

"The whole purpose of (the bankruptcy filing) was to reorganize
the capital structure of the company," Mr. Powar said. He said
the company overestimated future revenues and took on too much
debt when it acquired more than 11 pay phone companies in four
years.  Mr. Powar said PhoneTel executives also expected higher
reimbursement payments from long-distance companies for calls
made from its pay phones using long-distance 1-800 numbers and
calling cards. But the Federal Communications Commission later
reduced the required amount for those so-called "dial-around"

ROYAL KUNIA: Company Owned By Horita Files Chapter 11
A company owned by prominent developer Herbert Horita filed for
Chapter 11 bankruptcy protection Tuesday.

The filing in U.S. Bankruptcy Court by Royal Kunia Apartments
Inc. halted a foreclosure auction scheduled for Wednesday in
Circuit Court.  A 25-acre parcel of the Royal Kunia housing
project on Oahu was to be sold.

The foreclosure was sought by several banks that loaned money to
the company developing the Oahu housing project. The banks,
including Bank of Hawaii, said they are owed about $ 30 million.

In its filing, the company said it has assets of $ 31.5 million
and debts of nearly $ 68 million. The housing project was begun
in 1991, with 1,900 units to be constructed during the first
phase. So far, fewer than half have been built.

RUSSELL CORP: Bottom-line Shows Loss Due To Non-Recurring Charges
Russell Corporation, in making it financial report for the
quarter ending July 4, 1999 indicates net income of $1,443
on net revenues of $260,449.  The six-months ending on that
date showed a net loss of $12,908 on net revenues of $493,626.

In the second quarter of 1998 net revenues were shown as
$271,824 with a net income of $6,560. The six- month period
of 1998 had net revenues of $528,053 with net income of $8,409.

The results of operations for the twenty-six weeks
ended July 4, 1999, are said by the company to be not
necessarily indicative of the results to be expected for
the full year. The financial statements for the twenty-six
weeks ended July 4, 1999, include non-recurring charges
of approximately $37,517,000 on a pre-tax basis related
primarily to severance accruals, asset impairments, the
relocation of certain personnel to Atlanta, and a djustments
to depreciation expense related to assets involved in the
company's restructuring plans.

Results for the current quarter include restructuring and
reorganization charges and other unusual expenses as part
of the company's previously announced multi-year strategic
plan. This plan was announced on July 22, 1998, and details of
the plan are more fully discussed in the 1998 Annual Report
to Shareholders. Charges in the current quarter amounted to
$4.4 million of restructuring and reorganization expenses
and $3.2 million of other unusual charges.

SANTA FE GAMING: 66.3% Of Company Owned by Lowden
Paul W. Lowden holds sole voting and dispositive power over
4,348,069 (rounded up to the nearest whole share) shares of
common stock of Santa Fe Gaming Corporation, representing 66.3%
beneficial ownership in the company.  Mr. Lowden reports that
purchase of common stock made by him were made for investment
purposes only and that from time to time he may purchase
additional shares of common stock in the open market or in
privately negotiated transactions.

Because of his beneficial ownership of 66.3% of the outstanding
shares of common stock of the company, Mr. Lowden has the power
to initiate plans or proposals with far reaching consequences
for the company.  While Mr. Lowden indicates he currently has
no such plans or proposals, it is conceivable that he could,
in the future, develop and implement a plan or proposal which
would result in compelling occurrences.  He additionally
has the right to acquire 359,510 of the shares under stock
options which have been granted to him under the company's
employee stock option plan and which are currently exercisable.

Prior to the reorganization of the company, Mr. Lowden
beneficially owned approximately 73% of Sahara Resorts
and less than 1% of the outstanding units representing
economics and certain other rights in the partnership.  In the
reorganization, Mr. Lowden's ownership interests in Sahara
Resorts and the partnership were converted into 2,521,875
shares or 50.9%, of the company's common stock. In February
1994, the company declared a 25% stock dividend with respect
to all outstanding common stock and since September 30, 1993,
Mr. Lowden has acquired beneficial ownership of 998,292.93
shares of common stock through a stock dividend, 401(k)
purchases, purchases in open market transactions and through
grants of employee incentive stock options. In addition,
Mr. Lowden disposed of 252,178 shares through contributions
to LICO and disposition of 401(k) shares.

Mr. Lowden is the 100% shareholder of LICO, which is
a shareholder of Santa Fe Gaming.  Due to Mr. Lowden's
relationship to LICO, he is deemed to be the indirect
beneficial owner of common stock purchased by LICO. Since
September 30, 1993, LICO acquired 1,274,079 shares of common
stock through open market transactions, stock dividends,
contributions to capital from Mr. Lowden individually,
contributions to capital from Mr. and Mrs. Lowden jointly and
contributions to capital from Mrs. Lowden individually. During
this period of time, LICO also sold 185,000 shares of common
stock in three open market transactions.

Santa Fe Gaming Corporation, formerly known as Sahara Gaming
Corporation, a publicly traded Nevada corporation, is the
successor corporation of two affiliates, Sahara Resorts,
a Nevada corporation, and Sahara Casino Partners. L.P., a
Delaware limited partnership, which combined in a business
combination in September 1993 (the "Reorganization").

In September 1993, the partnership was converted into corporate
form through the merger of the partnership with and into
Sahara Gaming, as a result of which Sahara Gaming was the
surviving entity, and Sahara Resorts was merged into Sahara
Merger Corp., a Nevada corporation wholly-owned by Sahara
Gaming, as a result of which Sahara Resorts was the surviving
corporation wholly-owned by Sahara Gaming. At the time of the
reorganization, Sahara Resorts was the holding company for a
majority interest in the partnership and its operations. As a
result of the reorganization, Sahara Gaming succeeded to all
of the assets and liabilities of the partnership and Sahara
Resorts and was the successor issuer of Sahara Resorts.
In 1996, Sahara Gaming changed its name to Santa Fe Gaming

SILICON GRAPHICS: Chairman and Chief Executive Belluzzo Resigns
The Milwaukee Journal Sentinel reports on August 24, 1999 that
Silicon Graphics Chairman and Chief Executive Rick Belluzzo
resigned after a largely unsuccessful 19-month effort to restore
the ailing maker of computer workstations to health.

SOUTHERN PACIFIC FUNDING: Ocwen Transfer May Set Record
The National Mortgage News reports on August 23, 1999 that West
Palm Beach, FL-Ocwen Financial Corp. has entered into a contract
with Southern Pacific Funding Corp., to service 17,660 subprime
loans with a principal balance of $ 1.3 billion. According to an
Ocwen spokesman, the transference of this amount of subprime
servicing is possibly the largest ever.

The loans will be serviced in Ocwen's National Servicing Center
in Orlando, Fla. The spokesman said that the center has the
capacity for 900 loan consultants and currently has 300
consultants in the center.

"Now that the loans have been boarded, we have begun the
administration process. Our ability to implement a seamless
transition results from the advanced servicing platform that we
put into place several years ago. This platform offers our
customers several benefits, including lower delinquency
rates,compression of loan resolution timelines, efficient
management of third-party costs and selection of optimal loan
resolution strategies," said the chairman and chief executive
officer of Ocwen, William C. Erbey.

At this point Ocwen is servicing only the 17,660 loans, and
cannot say whether the company will take on more loans from SPFC
to service. SPFC, Lake Oswego, Ore., filed for Chapter 11
bankruptcy protection last fall.

STUART ENTERTAINMENT: Bankruptcy Filed/Plan Outlined
On August 13, 1999, Stuart Entertainment, Inc. filed a
petition for reorganization under Chapter 11 in the United
States Bankruptcy Court for the District of Delaware.

Prior to the August 13 Chapter 11 filing, the company had
reached an agreement-in-principle with certain of the holders
of its $100 million 12-1/2% Senior Subordinated Notes due 2004,
with respect to a consensual restructuring of the company's
debt and equity.  Under the agreement, dated May 21, 1999,
upon effectiveness of the Plan of Reorganization the notes,
including principal, interest, fees and other charges, will
be cancelled and in exchange the noteholders will receive,
pro-rata, one hundred percent (100%) of the common stock to be
authorized under the company's amended and restated certificate
of incorporation to be filed with the Delaware Secretary of
State after Bankruptcy Court approval of the Plan, subject
to dilution of approximately 10% on a fully diluted basis by
shares reserved for issuance under options to be issued to the
company's executive management. The existing common stock of
the company will be cancelled and, in exchange, the holders
will receive, subject to approval by the Bankruptcy Court,
a pro-rata portion of $150,000 in cash.

Under the Plan, all persons who hold, together with all
affiliates of such persons, $500,000 or less in principal
amount of notes, or who elect to reduce their holdings to
$500,000, will receive a cash payment equal to 25% of the
noteholder's allowed claim in lieu of new common stock, unless
the noteholder elects to receive new common stock. Stuart
Entertainment may fund up to an aggregate of $3 million of
such cash payments, with the remainder to be funded by the
largest holder of the notes in accordance with a Standby
Funding Commitment. Under the Standby Commitment, the largest
holder of the notes will receive, in exchange for any such
funding provided, an allowed claim as a noteholder, thus
entitling such holder to an additional pro rata distribution
of new common stock under the Plan.

The agreement provides for certain key executive officers of
the company to receive vested options to purchase four percent
(4%) of the outstanding new common stock, and performance
based options to purchase six percent (6%) of the outstanding
new common stock as of the effective date of the Plan on
a fully diluted basis. These percentages are subject to
increase based on the amount of the company funding, and the
accretive effect thereof, in accordance with a formula set
forth in the Plan. The noteholders have agreed to support
the payment of all trade claims in the ordinary course of
the company's business. As a result, the company's trade
creditors will not be impaired or negatively impacted by the
consensual restructuring.

The Plan filed with the Bankruptcy Court is subject to
numerous conditions, including that the Plan be confirmed by
the Bankruptcy Court, that Stuart have sufficient cash on the
effective date to make all cash payments required to be made
under the Plan, that Stuart receive all required regulatory
approvals, and that there is no order, decree or ruling by any
court or governmental body having jurisdiction, restraining
or enjoining the consummation of the Plan. However, there
is no assurance that the consensual restructuring provided
for in the agreement and the Plan will be finalized or that
any restructuring which is contemplated will not be on terms
materially different from those contained in the agreement
and the Plan.

STARTER: Schottenstein Sees Big Dollar Signs
Columbus-based Schottenstein Stores Corp. will make a lot of
money when it sells $200 million in Starter athletic apparel at
deeply discounted prices through its Schottenstein and Value City
Department Stores.  But it also hopes to make money through a 20
percent ownership in a new licensing firm that wants to market
the Starter trademark to apparel manufacturers.

And if it is successful in talks with major sports leagues and
colleges, it would make more money every time a piece of next-
generation Starter apparel bearing the name of some sports teams
is sold.  A consortium of investors, led by Indianapolis-based
Logo Athletic Inc. and Schottenstein Stores, walked away from
U.S. Bankruptcy Court with the trademark and apparel inventory of
Connecticut-based Starter Corp. after agreeing July 15
to pay $ 46 million for those assets.

A lower offer by New York-based Haddad Apparel Inc. had been
approved by the court, but a bidding war broke out and Haddad
took a $ 750,000 breakup fee rather than match the $46 million

Tom Shine, president of Logo Athletic, said the group ended up
paying "significantly less" than it had expected.

Schottenstein Stores put up $25 million for Starter's inventory,
which will be sold at its department stores. The other investors
- including Logo Athletic Sol Werdiger of Outer Stuff Ltd.,
Franco Apparel Group and Parthenon Capital of Boston - paid $ 21
million for the rights to Starter's trademark.

They will create and jointly own an entity that would license the
Starter trademark to apparel and accessories makers, including
themselves. Logo Athletic will sell menswear under the Starter
name, Outer Stuff will market kids apparel and Franco Apparel
will sell baby and toddler products.

Michael Broidy, vice president of corporate affairs for
Schottenstein Stores, said the retailer was most interested in
the $200 million in inventory included in the consortium's bid.
But the company is also interested in retailing Official Starter
inventory in the future.

The goal for the new company is to make Official Starter an
international brand, Broidy said.  Net proceeds from the $ 46
million sale would be shared by banks that held liens on Starter
Corp. But pro sports leagues and other unsecured creditors likely
would split several million dollars from the sale of additional
Starter assets, including about $ 6 million to $ 8 million owed
to Starter by other companies.

SUCCESS HOLDINGS: Meeting of Creditors
A meeting of creditors will be held on September 28, 1999 at 2:00
PM at the office of the US Trustee, 80 Broad Street, Second
Floor, New York, NY.

SUN TV: Seeks Order Granting Extension of Exclusivity
The debtors, Sun TV and Appliances, Inc. and Sun Television and
Appliances, Inc. seek an order granting extension of periods to
file plan and solicit acceptances thereto.  Sun TV seeks a brief
extension of 30 days through September 30, 1999 for the Filing
Period and November 29, 1999 for the Solicitation Period.

The debtors seek a brief extension to ensure that Sun TV has the
opportunity to finalize the disclosure statement and liquidating
plan.  The debtor alleges that its case is large and complex,
that its management has been diligent in administering the cases,
and that there is neither a need for - nor would there be any
likely benefit from any other party's controlling the
distribution, under a plan, of the proceeds from Sun TV's asset

THORN APPLE VALLEY: IBP Completes Acquisition
On August 25, 1999, IBP, Inc. completed the acquisition of
Thorn Apple Valley (TAV), a Michigan based meat processing

IBP officials in June entered into a letter of intent to
buy TAV, which filed for bankruptcy earlier this year.
A federal bankruptcy judge approved and confirmed plans
for the transaction in July. Effective today, TAV will
be operated as a subsidiary of IBP.

"Thorn Apple Valley is the latest step in our further
efforts aimed at a more manufactured, higher margin product
mix," according to Robert L. Peterson, IBP chairman and
chief executive officer. "This acquisition is a great
complement to our other value-added businesses. Already we
have begun the process and started the investment to move
beyond the challenges of the past.  Specific initiatives
to improve product quality, to ensure product safety, and
to achieve state-of-the-art manufacturing are underway. We
are firmly committed to TAV's customers."

In the transaction, IBP purchased certain assets of TAV
for $ 117.5 million in cash and assumption of debt. With
inventory and receivables valued at $ 50 million, IBP's
investment in brand names, trademarks and fixed assets is
approximately $ 67.5 million. Operating facilities included
in the purchase are further processing plants in Ponca
City, Oklahoma; Forrest City, Arkansas; Holly Ridge, North
Carolina, Grand Rapids, Michigan and Detroit, Michigan.

Thorn Apple Valley produces bacon, hot dogs, lunch meats,
hams and sausage and manages national brand names such as
Thorn Apple Valley(R), Corn King(R), Colonial(R), Wilson
Certified(R) and Cavanaugh Lake View Farms(R).

TONI MARONI'S: Files for Chapter 11 Protection  
Bellevue, Wash.-based Toni Maroni's pizza chain has filed for
chapter 11 protection, according to The Seattle Post-
Intelligencer. Founder and President Tony Rivera said the filing
was precipitated by a failed agreement with Blockbuster, which
either would have acquired the chain or allowed Maroni's to
install pizza stands in many of its video rental stores. The
company has assets of $772,000 and liabilities of $2.1 million,
and eight to 10 people will be laid off. The company has 12
locations in Washington and five in California.


The Meetings, Conferences and Seminars column appears
in the TCR each Tuesday.  Submissions via e-mail to are encouraged.  

Bond pricing, appearing in each Friday edition of the TCR, is
provided by DLS Capital Partners, Dallas, Texas.

S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter is a daily newsletter, co- published by
Bankruptcy Creditors' Service, Inc., Princeton, NJ, and Beard
Group, Inc., Washington, DC. Debra Brennan, Yvonne L. Metzler,
Editors.  Copyright 1999. All rights reserved. ISSN 1520-9474.

This material is copyrighted and any commercial use, resale
or publication in any form (including e-mail forwarding,
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without prior written permission of the publishers.

Information contained herein is obtained from sources believed
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