TCR_Public/991004.MBX    T R O U B L E D   C O M P A N Y   R E P O R T E R
       
       Monday, October 4, 1999, Vol. 3, No. 191                                              
                             
                   Headlines

BANDSAWE RESIDUAL CORP: Case Summary & 20 Largest Creditors
COSTILLA ENERGY: Notice of Bar Date To File Proofs of Claim
CRAGAR INDUSTRIES: Licensing Arrangement With WELD RACING
DAVIE INDUSTRIES: Canada-U.S. Consortium Offers C$24 Million
FEDCO: Order Authorizes Debtor To Retain Deloitte & Touche

FULCRUM DIRECT: Seeks To Extend Exclusivity
GENEVA STEEL: Raises Price of Steel Plate
GOSS GRAPHICS: Debtor and Committee Object To Trustee
GREATER SOUTHEAST: Judge Ready To Order Sale
IONICA PLC: Applies to Employ Arkin, Schaffer & Kaplan

LONDON FOG: Considers Move to Seattle to Cut Costs
MAC PLASTICS: Disclosure Statement & Plan Approved and Confirmed
MERRY GO ROUND: Judge Rejects Trustee's Lawsuit
NATIONSWAY: Bar Date Fixed - October 29, 1999
PAISA INC: Case Summary & 20 Largest Unsecured Creditors

PRECISION AUTO: May Seek Buyer but Denies Plans For Bankruptcy
RAND ENERGY: Approval of Disclosure Statement
RENAISSANCE COSMETICS: Seeks Order Extending Exclusivity
SGSM ACQUISITION: Hearing on Approval of Disclosure Statement
SOUTHERN PACIFIC: Ocwen Wins Southern Pacific Servicing Contract

STUART ENTERTAINMENT: Court Approves Attorneys
STUART ENTERTAINEMNT: Hearing Date for Disclosure Statement
STUART ENTERTAINMENT: Order Approves Entry Into HQ Lease
STUART ENTERTAINMENT: Order Authorizes Standby Funding Commitment
SUN TV: Exclusivity Extended

TALK AMERICA: Order Authorizes Employment of Joseph Finn Co
TRANSTEXAS: Second Committee of Unsecured Creditors
TRANSTEXAS: Committee of Holders of 13 3/4% Series C and D Notes
VENCOR: Applies to Employ Counsel

                   *********

BANDSAWE RESIDUAL CORP: Case Summary & 20 Largest Creditors
--------------------------------------------------------------
Debtor: Bandsawe Residual Corporation
        501 Brickell Key Drive, Suite 300
        Miami, FL 33131

Court: Southern District of Florida
Chapter 11
Case Number: 99-15698

Debtor's Attorney:
Guy B. Bailey
Bailwey harper Baker, Arencibia & Agudo, PT
501 Brickell Key Drive Suite 900
Miami, FL 33131

List of Twenty Largest Unsecured Creditors

Name                                     Amount
----                                     ------         
Swire Pacific Holdings, Inc.             1,925,500
David Efron                              1,500,000
Julius Obren, Nathan Ohren                 900,000
Lois M. Bailey                             500,000
Cynthia Michael Jason and Becker Fulford   498,000
IRS                                        400,000
Brickell Key Centre                        232,345
Central Parking                              6,300
Aspen Publishers                             3,351
Steven Cronig                              140,000
GE Capital Trans Leasing                    60,000
Great American Leasing                      60,000
West Publishing Co.                         40,000
Pitney Bowes Company                        35,000
Custom Supplies and Software                32,888
Allied Legal Supplies                       32,549
Mercedes C. Busto                           30,000
BellSouth                                   20,000
IBC Messenger Inc.                          10,000


COSTILLA ENERGY: Notice of Bar Date To File Proofs of Claim
-----------------------------------------------------------
The debtor, Costilla Energy, Inc. filed notice of commencement of
the case of Costilla Energy, Inc. The deadline for filing proofs
of claim against the debtor is January 24, 2000.  Governmental
agencies have until March 1, 2000 to file proofs of claim in the
case.


CRAGAR INDUSTRIES: Licensing Arrangement With WELD RACING
---------------------------------------------------------
CRAGAR Industries, Inc. (OTC Bulletin Board: CRGR) today reported
that it has entered into a licensing arrangement with WELD
RACING, Inc., a privately held corporation.  Under the terms of
the Asset Purchase and Licensing Agreements, which still need
approval from certain parties, WELD RACING will be granted an
exclusive license to manufacture, market, distribute and sell
CRAGAR's well-known line of wrought aluminum automobile, light
truck and racing wheels.  In return for this license, WELD RACING
will pay CRAGAR a continuing royalty based on sales levels.  In
1998, sales of CRAGAR's wrought aluminum wheels and related
accessories represented approximately $2.5 million or 18% of
CRAGAR's gross revenues.

Michael L. Hartzmark, President and CEO, stated, "We sought a
licensing partner that could cost-effectively manufacture and
sell our wrought aluminum wheels and related accessories.  WELD
RACING's extraordinary technological achievements over the past
few years, its leadership position in the wrought aluminum wheel
niche and its well-known brand name, make it the natural partner
to grow CRAGAR's wrought aluminum wheel business." Dr.
Hartzmark continued, "Our most valuable asset is our brand name,
which will be enhanced by this transaction.  This partnership
will let a vertically integrated manufacturer of high quality
forged alloy wheels take a portion of our wheel line to the
market, while we focus our time, effort and resources on
extending the CRAGAR brand name through licensing arrangements
into other domestic performance automotive niches."

Greg Weld, President and Chief Executive Officer of WELD RACING,
Inc., commented further, "This arrangement gives WELD RACING one
of the premier brand names in our industry, as well as an
established product line and customer base developed over the
past 35 years.  Combining the CRAGAR brand and the well respected
WELD RACING brand, as well as our diverse product lines, will
enable WELD RACING to devote more resources to R&D, new
products and the extension of the CRAGAR brand into newer
technologies, including motorcycle wheels.  In addition, as a
more effective competitor in the automotive wheel industry, we
will be able to improve our methods of sales and significantly
expand our distribution." In conclusion, Mr. Weld summed
up, "This partnership will help WELD RACING achieve its goal of
becoming the dominant player in the manufacture and sale of
aftermarket wrought aluminum automobile, light truck, racing and
motorcycle wheels." CRAGAR Industries, Inc. is an international
designer, producer, and seller of custom wheels and wheel
accessories for cars, trucks, vans, sport utility
vehicles, racing vehicles, and motorcycles.


DAVIE INDUSTRIES: Canada-U.S. Consortium Offers C$24 Million
------------------------------------------------------------
Shareholders of Davie Industries shipyard in Quebec, one of the
last remaining shipyards in Canada, voted yesterday to approve a
C$24 million offer from a Canadian-U.S. consortium to pull the
naval construction site out of bankruptcy protection, according
to Reuters. Groupe Ocean and Groupe Desgaganes of Quebec City
along with Arlington-Va.-based Syntek Technologies and its New
York financial partner, Transitional Capital Ventures, made the
offer. According to the proposal, the new shareholders will take
control of the shipyard following due diligence within four
months, and each shareholder will hold a third of the shares. The
shipyard has been managed by a receiver since last year. Shares
of the company are currently owned by Cedar Canada Group, which
filed for bankruptcy protection last year. (ABI 01-Oct-99)


FEDCO: Order Authorizes Debtor To Retain Deloitte & Touche
--------------------------------------------------------------
The US Bankruptcy Court, Central District of California entered
an order on September 27, 1999, authorizing the debtor, Federal
Employees' Distributing Company, d/b/a FEDCO, Inc. to retain the
accounting firm of Deloitte & Touche LLP as its tax accountants
and employee benefits consultants, effective as of September 7,
1999.


FULCRUM DIRECT: Seeks To Extend Exclusivity
-------------------------------------------
The debtors, Fulcrum Direct Inc. and its debtor affiliates seek
an extension of their exclusive period within which they may file
a plan or plans of reorganization through and including November
30, 1999 and an extension of the exclusive period within which
they may solicit acceptances of any such plan through and
including January 31, 2000.

The debtors believe they have sufficient cause to seek such
extensions due to the complexity of these cases, the tasks faced
by management in the initial months of the cases in liquidating
the debtors' assets, the progress made to date in liquidating
their assets, and the need for additional time to investigate and
pursue potential causes of action.


GENEVA STEEL: Raises Price of Steel Plate
-----------------------------------------
Geneva Steel, which is operating under the protection of Chapter
11 of the U.S. Bankruptcy Code, has raised the price of its steel
plate. The $ 20 per ton price hike announced Wednesday follows
Geneva's announcement three weeks ago that demand for its
products had grown in recent months to the point where it could
fire up an additional blast furnace.

Prices have improved, particularly in the hot-rolled coil market,
said Dennis Wanlass, Geneva's vice president and chief financial
officer. "And while up to this point the plate market has been
only so-so, we are starting to see signs of improvement there as
well."

Geneva is not the only steel producer that has raised prices.

Bethlehem Steel, the country's third-largest steel producer,
raised the price for its plate steel last week. USX-U.S. Steel
Group, WHX Corp.'s Wheeling-Pittsburgh Steel Corp. and Weirton
Steel followed Bethlehem's lead.

"Even with this increase, prices are still depressed," said John
Armstrong, spokesman for USX-U.S. Steel. "We're really just
trying to make up for some of the ground we lost as a result of
all the foreign imports."

Nucor Steel, which operates a minimill in Plymouth, has not
raised its prices.

Unlike Geneva, which makes its steel directly from iron ore,
Nucor uses electric-arc furnaces to melt scrap metal, which then
is rolled and shaped into hundreds of different products.

"We have not raised our prices all year," said J. Curtis
Broadbent, controller for Nucor's Utah plant. "Our business is
good, but for us the flood of foreign imports is not over."


GOSS GRAPHICS: Debtor and Committee Object To Trustee
-----------------------------------------------------
Both the debtor, Goss Graphics Systems, Inc. and the Official
Committee of Unsecured Creditors object to the motion of LaSalle
Bank, NA for the immediate appointment of an interim Chapter 11
trustee for Goss Realty LLC. The debtor states that LaSalle has
shown no mismanagement or fraud and no cause for the appointment
of the trustee.  The debtor states that LaSalle continues to
improperly pressure Realty to execute a cash collateral order -
apparently for the sole purpose of permitting LaSalle to receive
adequate protection payments.  Realty's refusal to execute such a
cash collateral order is in the best interests of the estate.   
In support of its objection, the Committee states that LaSalle
has failed to demonstrate any cause to justify the appointment of
a Chapter 11 trustee for Goss Realty.  A hearing on confirmation
of the plan is scheduled for October 19, 1999.  Despite LaSalle's
apparent displeasure regarding its treatment under the plan, the
committee believes that the plan provides for the appropriate
treatment for LaSalle's secured claim.  

If LaSalle continues to remain dissatisfied with its treatment
under the plan, the Committee states that its recourse is to
object to the confirmation. The Committee further alleges that
the appointment of a Chapter 11 trustee at this time would
significantly derail the debtors' reorganization process to the
substantial detriment and expense of all unsecured creditors of
these estates.


GREATER SOUTHEAST: Judge Ready To Order Sale
--------------------------------------------
Bankruptcy Judge S. Martin Teel Jr. yesterday gave Washington's
Greater Southeast Community Hospital a deadline of Tuesday to
propose a plan to keep the hospital in business or sell its
assets to meet creditors' claims, The Washington Post reported.
The city has already loaned the Greater Southeast Healthcare
System, a non-profit foundation that runs the hospital,
$8.5 million since the spring. Creditors, who are owed more than
$70 million, yesterday said the hospital continues to lose money
and asked the judge to take the steps toward liquidation of its
assets. D.C. Mayor Anthony Williams and hospital officials
objected and urged a delay in liquidation plans so that a health
panel, consultants and officials would have time to decide how
to reorganize the hospital. Judge Teel indicated yesterday that
additional help from the city seems to be the only hope and said
"there is evidence that the [hospital] can turn around if the
District of Columbia advances the $8 million to $10 million. (ABI
01-Oct-99)


IONICA PLC: Applies to Employ Arkin, Schaffer & Kaplan
--------------------------------------------------------------
The debtor, Ionica PLC seeks entry of an order authorizing the
retention and employment of Arkin, Schaffer & Kaplan LLP as its
special counsel for the purpose of investigating and pursuing
claims against entities which the debtor's counsel, Cadwalader,
Wickersham & Taft may not pursue due to potential conflicts of
interest.


LONDON FOG: Considers Move to Seattle to Cut Costs
--------------------------------------------------
London Fog Industries Inc., which filed chapter 11 on Monday, is
considering moving its headquarters in the Baltimore area to its
Seattle office to cut costs and eliminate duplication of
tasks, The Baltimore Sun reported. Based in Eldersburg, Md., the
company employs more than 150 people at headquarters and 130 in
an adjoining distribution center. Five years ago London Fog
purchased Pacific Trail Inc., a Seattle company, and in March,
Pacific Trail's former president, William Dragon Jr., was named
CEO of London Fog. Dragon has remained in Seattle. A move of the
headquarters would be the third move since 1994. In 1994 the
chairman moved the company to Darien, Conn., near his home; after
he was fired one year later, the company moved back to
Eldersburg. During the last five years there also have been four
changes in top management. (ABI 01-Oct-99)


MAC PLASTICS: Disclosure Statement & Plan Approved and Confirmed
----------------------------------------------------------------
The Combined Disclosure Statement and Plan of Reorganization
filed by MAC Plastics, Inc. is approved and confirmed by the US
Bankruptcy Court for the Western District of Pennsylvania.  In
accordance with the plan, all remaining assets of the debtor's
estate are assigned to National City Bank in full satisfaction of
its secured claim against the estate.  National City Bank shall
receive any and all premium refunds due under the terms of the
debtor's policies with Zurich Insurance Company.  


MERRY GO ROUND: Judge Rejects Trustee's Lawsuit
-----------------------------------------------
Bankruptcy Judge E. Stephen Derby dismissed a lawsuit filed by
Merry-Go-Round Enterprises Inc. Trustee Deborah H. Devan,
according to The Baltimore Sun. The suit alleged that four banks
had improperly transferred about $10 million between accounts to
cut the retailer's debt to them before Merry-Go-Round filed for
bankruptcy protection. Judge Derby said that Devan failed to
prove that a reduction in the net amount owed to the banks for
$61.3 million to $50.6 million within 90 days before the filing
represented "set-offs." Devan is overseeing the company's
liquidation in chapter 7, and First Union National Bank and Bank
of America, which now own two of the banks involved in the 1993
transactions, asked the judge to award the banks summary
judgment. Judge Derby ruled that according to the bankruptcy law,
the transfers must be made unilaterally without any attempt to
satisfy a mature debt to be considered "set-offs" subject to
recovery by the trustee and that the amount owed the banks was
not considered mature debt. Merry-Go-Round filed chapter 11 in
January 1994 and converted to chapter 7 in March 1996. (ABI 01-
Oct-99)


NATIONSWAY: Bar Date Fixed - October 29, 1999
---------------------------------------------
October 29, 1999 is established by the US Bankruptcy Court for
the District of Arizona as the deadline within which any and all
persons asserting a claim against NationsWay Transport Service,
Inc., NW Transport Service, Inc. and Salt Lake Transfer Company
must file a proof of claim.


PAISA INC: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: PAISA, Inc.
        1940 No. Tustin Avenue, #105
        Orange CA 92865-4642

Court: Central District of California
Chapter 11

Filed: 10/01/99

Debtor's Attorney:
Christopher L. Blank
4695 MacArthur Court #1200
Newport Beach, CA 92660

Twenty Largest Unsecured Creditors:
Name                            Amount
----                            ------         
Arter & Hadden              $1,008,933
RAI International Inc.         560,454
Hanif Hirji                    259,769
ADVO, Inc.                     257,028
Sukhjinder Randhawa             50,000
Hanover & Schnitzer             50,000
Mostafa Badou                   42,094
Southrim Properties LLC         37,442
IRS                            218,287
Salina Esmail                1,830,000
Shamshjudin Kirji              149,323
BaIwindez Sukhija              104,770
Sher Ahmad Johangiry            94,375
Cypress Enterprises             92,892
VBC Capital Corp.               82,626
Akon-Car, Inc.                  70,069
Bashir Matin                    68,477
Reynaldo C. Rivera              66,108
Han Sun Lee                     60,000
Chanderkala Grover              54,507


PRECISION AUTO: May Seek Buyer but Denies Plans For Bankruptcy
--------------------------------------------------------------
Precision Auto Care Inc., Leesburg, Va., said yesterday that it
is seeking options to get out of debt, including a sale,
according to The Washington Post. The company is out of cash and
facing an Oct. 15 deadline on $8.45 million in debt; the payment
was due yesterday but Precision received an extension until mid-
month. CEO Charles Dunlap said he has been negotiating with
several companies for a cash infusion or sale of all or parts of
the company, and optimistically said "We are certainly not
looking at bankruptcy." Last fall the company delayed debt
payments and laid off 10 percent of its employees, and in
February, a board member loaned $5 million to the company.
Aggressive acquisitions in 1998 severely hurt the company's
cash flow. Yesterday Dunlap said "We're fairly close to resolving
the debt extension issue." Precision Auto has more than 600 auto
care centers, including Precision Tune Auto Care, Precision Auto
Wash and Precision Lube Express. (ABI 01-Oct-99)


RAND ENERGY: Approval of Disclosure Statement
--------------------------------------------------------------
The US Bankruptcy Court for the Northern District of Texas
entered an order approving the final Disclosure Statement of Rand
Energy Company, debtor.  The hearing on confirmation of the plan
shall commence on November 2, 1999 at 9:30 AM before the
Honorable Steven A. Felsenthal, 1100 Commerce Street, 14th Floor,
Dallas, Texas 75202.



RENAISSANCE COSMETICS: Seeks Order Extending Exclusivity
--------------------------------------------------------
The debtors, Renaissance Cosmetics, Inc., et al. are seeking an
extension of the exclusive period during which the debtors may
file and solicit acceptances of a plan or plans of
reorganization. The debtors seek an extension up to and including
January 31, 2000.

Since the closing of the sale to DPC Acquisition Corp., which
occurred on July 30, 1999, the debtors have terminated all but
one of their employees, sought authority to terminate 401(k)
benefit plans, begun the process of marshalling their remaining
assets for the benefit of their creditors, and litigated their
rights to receive approximately $29 million of the consideration
to be paid for the sale.  The debtors hope to continue the
analysis of their business, and, if appropriate to draft and
circulate to their principal creditor constituencies such a
liquidating plan.


SGSM ACQUISITION: Hearing on Approval of Disclosure Statement
-------------------------------------------------------------
The hearing to consider the approval of the  Disclosure Statement
of SGSM Acquisition Company LLC, filed on September 14, 1999 will
be held before T.M. Brahney, III, Bankruptcy Judge in Courtroom
709, Hale Boggs Federal Building, 501 Magazine Street, New
Orleans, Louisiana, November 4, 1999 at 10:00 AM


SOUTHERN PACIFIC: Ocwen Wins Southern Pacific Servicing Contract
----------------------------------------------------------------
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 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.
  
Ocwen's servicing business is growing and has increased 94% in
the second quarter compared to the second quarter of 1998,
according to the spokesman.
  
Ocwen currently services approximately 170,944 mortgage loans for
others with an unpaid principal balance of $ 12.1 billion. Ocwen
has also been designated special servicer of securitized mortgage
loans, having an unpaid principal balance of $ 8.2 billion.


STUART ENTERTAINMENT: Court Approves Attorneys
----------------------------------------------
The US Bankruptcy Court for the District of Delaware entered two
separate order  s authorizing the employment and retention of
Squire, Sanders & Dempsey LLP as attorneys for the debtor, and
Saul, Ewing, Remick & Saul LLP as co-counsel for the debtor.


STUART ENTERTAINEMNT: Hearing Date for Disclosure Statement
-----------------------------------------------------------
A hearing to consider the court's approval of the Disclosure
statement of Stuart Entertainment Inc. is set for October 27,
1999 at 12:00 PM.


STUART ENTERTAINMENT: Order Approves Entry Into HQ Lease
---------------------------------------------------------
The US Bankruptcy Court for the District of Delaware entered an
order in the case of Stuart Entertainment Inc. approving and
authorizing the debtor's entry into a commercial office space
lease for its corporate headquarters in 8200 Normandale
Boulevard, Bloomington, Minnesota.  The base rent is $226,525
annually, with annual upward adjustments to $262,769 in 2003.


STUART ENTERTAINMENT: Order Authorizes Standby Funding Commitment
-----------------------------------------------------------------
The US Bankruptcy Court for the District of Delaware entered an
order authorizing the debtor, Stuart Entertainment Inc. To obtain
unsecured credit by entering into a certain Standby Funding
Commitment with Contrarian Capital Management LLC.


SUN TV: Exclusivity Extended
----------------------------
The US Bankruptcy Court for the District of Delaware entered an
order extending the exclusive period within which Sun TV may file
a plan of liquidation through and including September 30, 1999;
and extending the exclusive period within which Sun TV may
solicit acceptances of any such plan through and including
November 29, 1999.


TALK AMERICA: Order Authorizes Employment of Joseph Finn Co
-----------------------------------------------------------
The US Bankruptcy Court, District of Maine entered an order on
September 28, 1999 authorizing the debtor, Talk America, Inc. to
employ Ross J. Finn and Joseph Finn Co., Inc. to serve as
appraisers for the debtor.


TRANSTEXAS: Second Committee of Unsecured Creditors
---------------------------------------------------
The US Trustee provides notice of the second reconstituted
Committee of Unsecured Creditors of TransTexas Gas Corporation.

Members:

First Union National Bank, Indenture Trustee
Halliburton Energy Services
Newpark Drilling Fluids, Inc.
Zurich America Insurance Co. c/o Risk Management Ltd.
Texas Gas Plants, LP
Hanson Production Company
Schlumberger Technology Corporation
Key Energy Services, Inc.


TRANSTEXAS: Committee of Holders of 13 3/4% Series C and D Notes
----------------------------------------------------------------
The United States Trustee provides notice of the appointment of
the Official Committee of Holders of 13 3/4% Series C and D
Senior Subordinated Notes Due 2001 of TransTexas Gas Corporation,
debtor:

Bank One, NA, Indenture Trustee
CFSC Wayland Advisors, Inc.
Alliance Capital Management Corp.


VENCOR: Applies to Employ Counsel
---------------------------------
Pursuant to 11 U.S.C. Sec. 327(e), the Debtors sought and
obtained Judge Walrath's authority to employ Reed Smith Shaw &
McClay as special counsel in these chapter 11 cases to represent
them:

(1) in Medicare and Medicaid regulatory, reimbursement and
related matters, as will be necessary in the chapter 11 cases;

(2) in pending litigation in the United States District Court for
the District of Columbia against the Department of Health and
Human Services regarding the exemption of long-term care
hospitals from the Prospective Payment System, and HHS'
anticipated appeal; and

(3) to advise and assist in negotiations and/or litigation
concerning recoupment of payments by the Medicare program or
amounts due to the Debtors from the Medicare program.

Reed Smith will bill the Debtors for services rendered by its
professionals at their customary hourly rates:

          Partners       Thomas C. Fox            $300
                         Eugene Tillman           $300
                         Elizabeth B. Carder      $285
                         Stephanie Wickouski      $295
                         Kevin R. Barry           $275
                         Carol Colborn Loepere    $265
                         Jospeh W. Metro          $240

          Healthcare     Francis M. Bhambhani     $180
          Associates     Gina M. Cavalier         $170
                         Scott D. Chenevert       $165
                         Joan P. Dailey           $185
                         Scot T. Hasselman        $155
                         Cadance J. Rosen         $145
                         Tamara V. Scoville       $165


          Paralegals     Lynne W. Evans           $100
                         Daniel A. Lewis           $85

Reed Smith's engagement will be led by Messrs. Fox and Tillman
from Reed Smith's Washington, D.C., office.  

The Debtors obtained Judge Walrath's permission to pay Reed Smith
a $25,000 general retainer following the Petition Date, provided
the retainer is applied against the first fee application filed
in the Debtors' case.  

Mr. Tillman discloses that Reed Smith has represented and does
represent certain of the Debtors' lenders in matters wholly
unrelated to Vencor.  Additionally, it is likely that Reed Smith
represents certain creditors of the Debtors, again, in matters
wholly unrelated to Vencor.  

The Debtors have also sought and obtained the Court's authority
to employ the Wilmington-based law firm of Morris, Nichols, Arsht
& Tunnell as their local counsel in their chapter 11 cases.
Specifically, Morris Nichols will:

a. perform all necessary services as the Debtors' counsel,
including, without limitation, providing the Debtors with advice
concerning their rights and duties as debtors in possession,
representing the Debtors, and preparing all necessary documents,
motions, applications, answers, orders, reports and papers in
connection with the administration of these chapter 11 cases on
behalf of the Debtors;

b. take all necessary actions to protect and preserve the
Debtors' estates during the pendency of their chapter 11 cases,
including the prosecution of actions by the Debtors, the defense
of any actions commenced against the Debtors, negotiations
concerning all litigation in which the Debtors are involved and
objecting to claims filed against the estates;

c. represent the Debtors at hearings, meetings, conferences,
etc., on matters pertaining to the affairs of the Debtors as
debtors in possession; and

The Debtors will pay Morris Nichols its customary hourly rates.
The attorneys and paralegals who are likely to play an active
role in this engagement, together with their current hourly
rates, are:

          William H. Sudell, Jr.      Partner      $365
          Robert J. Dehney            Partner      $255

          Eric. D. Schwartz           Associate    $210
          Derek C. Abbott             Associate    $190
          Gregory W. Werkheiser       Associate    $170

          Laura Balick                Paralegal     $95
          Denise S. Stitik            Paralegal     $95

Mr. Sudell discloses that Morris Nichols received $210,000 from
Vencor for services performed prior to the Petition Date.  The
Firm does not believe it holds and prepetition claim nor any
retainer.  (Vencor Bankruptcy News Issue 3; Bankruptcy Creditor's
Service Inc.)
                                               
                   *********

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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
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