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InterNet Bankruptcy Library - News for April 7, 1997







Bankruptcy News For April 7, 1997




        
  1. The AppleTree Companies, Inc.
            Announces Reorganization Under Chapter 11

  2.     
  3. Braun's Fashions Corporation Reports
            Strong Fourth Quarter and Year- End Results From
            Continuing Operations

  4.     
  5. Dow Corning Files Motion to Resolve
            Implant Claims

  6.     
  7. Main Street and Main Incorporated
            announces fourth quarter and year end results






The AppleTree Companies, Inc.
Announces Reorganization Under Chapter 11



NORFOLK, Va., April 7 /PRNewswire/ - THE APPLETREE COMPANIES,
INC. and its wholly owned subsidiary, America's Foods, Inc.,
filed petitions for relief under Chapter 11 of the United States
Bankruptcy Code on April 4, 1997, in the United States Bankruptcy
Court for the Eastern District of Virginia, Norfolk Division.



The directors of AppleTree and America's Foods took that step
only after concluding the progress made by management in reducing
costs and improving the prospects for profitability were at risk,
and Chapter 11 protection was necessary. The Board's instructions
to its counsel are that the corporations emerge promptly from
Chapter 11.



SOURCE AppleTree Companies, Inc. /CONTACT: Justin A. DiMacchia
of AppleTree, 757-466-9200/






Braun's Fashions Corporation Reports
Strong Fourth Quarter and Year-End Results From Continuing
Operations



MINNEAPOLIS, MN - April 7, 1997 - Braun's
Fashions Corporation
(Nasdaq: BFCI) today announced strong
sales and earnings in its continuing operations for its fourth
quarter and year ended March 1, 1997, following the Company's
successful Chapter 11 reorganization. For the quarter, same store
sales (sales in stores open more than one year) in the Company's
170 continuing stores increased 18% over the prior year.
Operating income (which excludes the impact of interest,
reorganization expense and income taxes) from continuing
operations was $2,047,000, an increase of 215% from $650,000 the
prior year. Due to the closing of 51 unprofitable stores related
to the reorganization, total Company sales in the fourth quarter
decreased 7% from the prior year to $24,511,000.



For its fiscal year ended March 1, 1997, same store sales for
the Company's 170 continuing stores increased 10% over the prior
year. Operating income was $6,655,000, an increase of $5,403,000
from the prior year. Total Company sales were $95,946,000, a
decrease of 1% from the prior year when the Company was operating
51 additional stores.



Net income in the fourth quarter totaled $4,304,000 or $.90
per share compared to a loss of $1,952,000 or $.51 the prior
year. There was a one-time gain of $2,385,000 in the fourth
quarter just ended due to certain deferred tax and reorganization
adjustments reflecting the Company's improved performance and
emergence from Chapter 11 on December 3, 1996. The net loss for
the prior year's fourth quarter and full fiscal year included the
negative impact of a $1,789,000 deferred tax asset valuation
allowance established at year-end.



For the fiscal year ended March 1, 1997, the net loss was
$621,000 or $.15 per share, which includes a $7,830,000
reorganization expense, and the positive impacts of $1,789,000
and $255,000, respectively, due to a reversal of the deferred tax
asset valuation allowance established at the end of the prior
year, and the recording of additional deferred tax assets. In the
prior year the Company had a net loss of $3,458,000 or $.91 per
share.



Nicholas H. Cook, Chairman and Chief Executive Officer stated,
"We finished 1996 on a very positive note. Our sales and
gross margins for the holiday season were very strong and have
continued that trend to-date. Our performance in the fourth
quarter was significantly ahead of the industry. Operating
strategies introduced in August of last year fueled third and
fourth quarter results and the Company continues to outperform
the industry. Because of the recent performance of our continuing
stores, the composition and levels of our inventories, and the
customer acceptance of our merchandising strategies, we enter the
new fiscal year with a great deal of optimism."



Braun's Fashions Corporation, based in Minneapolis, Minn., is
a specialty retailer of women's fashions. Braun's has 174 stores
in 20 states, including 4 new stores opened in March 1997. The
Company's stores are located primarily in the Midwest and Pacific
Northwest.



                Proforma Financial Highlights - 170 Continuing Stores
                                (Dollars in thousands)
                                     (Unaudited)
        


                                            Three Months Ended
                                         March 1, 1997    March 2, 1996
                                         Thirteen Weeks   Fourteen Weeks
        Net sales                           $ 24,423          $ 21,631
        Operating income                    $  2,047          $    650
        


                                            Three Months Ended
        


                               March 1, 1997    % of      March 2, 1996
% of
                                   Thirteen Weeks    Sales    Fourteen Weeks
        Sales
        


            Net sales                 $ 24,423       100.0       $ 21,631
        100.0
        


            Cost of sales               16,269        66.6         15,193
        70.2
        


            Gross profit                 8,154        33.4          6,438
        29.8
        


        Selling, general and
             administrative              5,460        22.4          5,219
        24.2
        


        Depreciation and
             amortization                  647         2.6            569
        2.6
        


            Operating income          $  2,047         8.4       $    650
        3.0
        


                Proforma Financial Highlights -- 170 Continuing Stores
                                (Dollars in thousands)
                                     (Unaudited)
        


                                                        Fiscal Year Ended
        


                                                 March 1, 1997     March 2,
1996
                                                    Fifty-Two Weeks  Fifty-
        Three Weeks
        


        Net sales                                   $ 87,161         $ 79,463
        Operating income                             $ 6,655          $ 1,252
        


                                                  Fiscal Year Ended
        


                                      March 1, 1997    % of    March 2, 1996
        % of
        


                                     Fifty-Two Weeks  Sales  Fifty-Three
        Weeks  Sales
        


            Net sales                   $ 87,161      100.0      $ 79,463
        100.0
        


            Cost of sales                 57,379       65.8        55,678
        70.1
        


            Gross profit                  29,782       34.2        23,785
        29.9
        


        Selling, general and
             administrative               20,767       23.8        20,305
        25.6
        


        Depreciation and
             amortization                  2,360        2.8         2,228
        2.7
        


            Operating income             $ 6,655        7.6       $ 1,252
        1.6
        


                                 Financial Highlights
                   (Dollars in thousands, except per share amounts)
                                     (Unaudited)
        


                                                    Three Months Ended
                                               March 1, 1997      March 2,
1996
                                               Thirteen Weeks    Fourteen
Weeks
        Net sales                                $24,511            $26,380
        Net income (loss)                        $ 4,304(a)(c)
$(1,952)(a)
            Net income (loss) per common share       $  0.90(a)(b)(c)   $
        (0.51)(a)(b)
        


                                          Three Months Ended
                            March 1, 1997    % of      March 2, 1996     % of
                           Thirteen Weeks    Sales     Fourteen Weeks    Sales
        


        Net sales              $24,511       100.0         $26,380       100.0
        Cost of sales           16,315        66.6          19,135        72.5
        Gross profit             8,196        33.4           7,245        27.5
        Selling, general and
         administrative          5,485        22.4           6,400        24.3
        Depreciation and
         amortization              640         2.6             787         3.0
        Operating income         2,071         8.4              58         0.2
        Interest, net              152         0.6             305         1.1
        Income (loss) before
         income taxes
         and reorganization expense
         reversal                1,919         7.8             (247)
(0.9)
        Reorganization expense
         reversal                  341(c)      1.4(c)            --         --
        Income (loss) before
         income taxes            2,260         9.2             (247)
(0.9)
        Income tax provision
             (benefit)              (2,044)(a)    (8.4)(a)        1,705(a)
        6.5(a)
        


            Net income (loss)       $4,304(a)(c)   17.6(a)(c)   $(1,952)(a)
        (7.4)(a)
        


        Net income (loss)
         per common share        $0.90(a)(b)(c)              $(0.51)(a)(b)
        


         (a)  In fiscal 1996, the Company recorded a valuation allowance of
         $1,789,000, or $.47 per share, equal to the full amount of its
deferred
             tax assets, due to the uncertainty of realizing the value of
        these assets
        


         in future years.  In fiscal 1997, the Company reversed the valuation
             allowance as recent operating performance has made the future
        realization
        


         of these assets likely, and recorded an additional $255,000 of
deferred
         tax assets.
             (b)  Based on the weighted average number of outstanding shares
        of common
        


         stock and common stock equivalents of 4,769,303 for the period ended
         March 1, 1997 and 3,792,632 for the period ended March 2, 1996.
             (c)  Includes a one-time gain of $341,000 primarily related to
        a reversal
        


         of reorganization expense previously charged in the second quarter.
        


                                 Financial Highlights
                   (Dollars in thousands, except per share amounts)
        


                                                      Fiscal Year Ended
        


                                               March 1, 1997      March 2,
1996
                                                  Fifty-Two Weeks   Fifty-
        Three Weeks
        


        Net sales                                $ 95,946          $ 97,296
        Net income (loss)                          $ (621)(a)      $
(3,458)(a)
            Net income (loss) per common share        $ (0.15)(a)(b)    $
        (0.91)(a)(b)
        


                                                  Fiscal Year Ended
        


                                March 1, 1997    % of    March 2, 1996
% of
                               Fifty-Two Weeks  Sales  Fifty-Three Weeks
Sales
        


        Net sales                 $ 95,946      100.0      $ 97,296      100.0
        Cost of sales               65,445       68.2        70,386       72.4
        Gross profit                30,501       31.8        26,910       27.6
        Selling, general and
         administrative             22,854       23.8        24,897       25.6
        Depreciation and
         amortization                2,649        2.8         3,154        3.2
        Operating income (loss)      4,998        5.2        (1,141)
(1.2)
        Interest, net                  684        0.7         1,388        1.4
        Income (loss) before
         income taxes and
         reorganization expense      4,314        4.5        (2,529)
(2.6)
        Reorganization expense       7,830        8.2            --         --
        Income (loss) before income
         taxes                      (3,516)      (3.7)       (2,529)
(2.6)
        Income tax provision
             (benefit)                  (2,895)(a)   (3.1)(a)       929(a)
        0.9(a)
        


            Net income (loss)           $ (621)(a)   (0.6)(a)  $ (3,458)(a)
        (3.5)(a)
        


        Net income (loss) per
         common share              $ (0.15)(a)(b)           $ (0.91)(a)(b)
        


        (a)  In fiscal 1996, the Company recorded a valuation allowance of
         $1,789,000, or $.47 per share, equal to the full amount of its
deferred
             tax assets, due to the uncertainty of realizing the value of
        these assets
        


         in future years.  In fiscal 1997, the Company reversed the valuation
             allowance as recent operating performance has made the future
        realization
        


         of these assets likely, and recorded an additional $255,000 of
deferred
         tax assets.
        


             (b)  Based on the weighted average number of outstanding shares
        of common
        


         stock and common stock equivalents of 4,029,041 for the period ended
         March 1, 1997 and 3,791,612 for the period ended March 2, 1996.
        


SOURCE Brauns Fashions Corp./CONTACT: Stephen W. Clark, Vice
President and Chief Financial Officer of Braun's Fashions
Corporation, 612-551-5106/






Dow Corning Files Motion to Resolve Implant
Claims



MIDLAND, Mich., April 7 /PRNewswire/ - Dow Corning took a
major step forward today toward a fair and prompt resolution of
its Chapter 11 case by seeking to separate breast implant claims
involving local complications and rupture from the more
controversial claims that silicone implants cause disease. This
action parallels recent court decisions which have allowed breast
implant local complications and rupture claims to move forward to
trial while finding evidence insufficient to support claims that
silicone implants cause disease. Today, the company filed a
motion with Judge Arthur J. Spector of the U.S. Bankruptcy Court
for the Eastern District of Michigan, objecting to disease-based
claims, and seeking, at this time, a summary judgment as to
whether the scientific evidence justifies claims that silicone
implants cause disease.



In additional motions filed today, Dow Corning is also seeking
to resolve the breast implant controversy through procedures
involving the bankruptcy court, the district court, and
potentially, the national scientific panel already established by
Judge Sam C. Pointer, Jr., of the U.S. District Court for the
Northern District of Alabama, who is overseeing the consolidation
of breast implant cases involving other manufacturers. The
motions call for the option of integrating the expertise of Judge
Pointer and the national scientific panel at the district court
level into the bankruptcy court's consideration of whether the
evidence justifies claims that silicone implants cause disease.



According to Dow Corning chairman and chief executive officer
Richard Hazleton, "The motions we filed today provide a fair
and prompt way to resolve the controversy over breast implant
disease claims, so that procedures can be negotiated to resolve
claims involving local complications and rupture - claims which
our company remains willing to compensate on a reasonable basis,
where appropriate. A prolonged debate on disease delays the
resolution of local complication and rupture claims for women
with breast implants."



Judges in several jurisdictions across the country have taken
a stronger role in evaluating what meets the standards of
admissible scientific evidence. Most recently, Federal District
Judge Jones in Oregon, Federal District Judges Weinstein and Baer
in New York, and Federal District Judge Prado in Texas have found
evidence insufficient to support claims that breast implants
cause disease. Similarly, Federal District Judge Pro in Nevada
has also found insufficient evidence to support disease claims
involving other silicone medical devices (see summary of rulings
below).



"Our motions filed today build on these rulings and would
allow claims to move forward by separating local complications
from disease claims," Hazleton said. "The trend shows
that courtroom rulings are now matching the judgment of the
scientific community that the compelling weight of evidence shows
that silicone implants do not cause disease."



Dow Corning Corp., a global leader in silicon-based materials,
is a Michigan corporation with shares equally owned by The Dow
Chemical Company (NYSE: DOW), and Corning Incorporated (NYSE:
GLW). More than half of Dow Corning's sales are outside the U.S.



Highlights of Recent Court Rulings



Several recent court rulings have applied the Daubert
standards for evaluating scientific evidence in silicone implant
cases. In some instances, judges have considered the views of
independent court-appointed expert advisory panels. Rulings from
judges are beginning to match the judgment of the scientific
community, finding insufficient evidence to support claims that
silicone implants cause disease.



Daubert v. Merrell Dow Pharmaceuticals, Inc. In Daubert v.
Merrell Dow Pharmaceuticals, Inc., (1993), the U.S. Supreme Court
established new rules for determining the admissibility of
scientific expert testimony. The District Court is now required
to play the role of "gatekeeper" and exclude unreliable
or unscientific expert testimony. Under Daubert, the District
Court must decide whether the testimony reflects scientific
knowledge, constitutes good science and was derived by scientific
method. The District Court must also ensure that the testimony
"fits" the case in that it logically addresses a
material issue in the case.



Key rulings include:



Kelley v. American Heyer-Schulte In January 1997, Judge Edward
Prado of the U.S. District Court for the Western District of
Texas entered a verdict in favor of Baxter Healthcare in a case
where the plaintiff claimed that silicone breast implants caused
her to develop a systematic disease. Citing Daubert, which set
standards for judges to use when assessing scientific merits of
expert testimony, Judge Prado excluded the plaintiffs' disease
causation experts from testifying.



Hall v. Baxter Healthcare Corp. In December 1996, Judge Robert
E. Jones of the U.S. District Court for the District of Oregon
granted a motion to exclude testimony of breast-implant
plaintiff's expert witnesses. Additionally, Judge Jones appointed
a panel of independent experts to analyze the plaintiffs' disease
causation theory from several different scientific disciplines.
In each case he concluded that plaintiffs failed to make a
sufficient case to take their disease causation claim before a
jury.



In re Breast Implant Cases In October 1996, in the U.S.
District Courts for the Southern and Eastern Districts of New
York, Judges Weinstein and Baer concluded that the evidence
presented by plaintiffs' expert witnesses was insufficient to
create even a triable issue as to whether silicone implants cause
any of the systemic diseases claimed.



Kempf v. Dow Corning In September 1996 Judge John Marshall of
the District Court, Dallas County, Texas, ordered the testimony
of plaintiff's expert witnesses in this breast implant trial
excluded under Daubert standards, as adopted by the Texas Supreme
Court.



Bailey v. Dow Corning In September 1996, Judge John Marshall
of the District Court, Dallas County, Texas, ordered the expert
testimony of plaintiffs' expert witnesses in this breast implant
trial excluded under Daubert standards, as adopted by the Texas
Supreme Court.



Cabrera v. Cordis Corp. In September 1996, U.S. District Court
of Nevada Judge Philip Pro excluded the testimony of plaintiffs'
expert witnesses in a case alleging disease caused by a silicone
hydrocephalic shunt. The judge indicated that testimony failed to
meet the Daubert standards for reliable evidence.



Multi-District Litigation In June 1996, Judge Sam C. Pointer,
Jr. of the U.S. District Court for the Northern District of
Alabama formed an independent national panel of experts to
examine the connection between silicone breast implants and
disease.



SOURCE Dow Corning -0- 04/07/97 /CONTACT: T. Michael Jackson,
517-496-6443, or Barbara J. Muessig, 517-496-8841, both of Dow
Corning/ (DOW GLW)



CO: Dow Corning ST: Michigan IN: CHM HEA SU: BCY



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Grossman's files for Chapter 11 relief



CANTON, Mass.--April 7, 1997-- Grossman's
Inc.
(Nasdaq-GROS) announced today that it has filed for
protection under Chapter 11 of the Bankruptcy Code in the United
States Bankruptcy Court for the District of Delaware.



As previously announced, Grossman's experienced significant
cash shortages during the first quarter of this year and had been
actively seeking additional financing, both interim and
long-term. Just prior to filing for Chapter 11, Grossman's
negotiated the terms of a debtor in possession financing facility
of up to $50 million with GDI Company, Inc., an affiliate of
JELD-WEN, inc. Under the arrangement, which is subject to
Bankruptcy Court approval, GDI will acquire the existing loan
position (approximately $27 million currently outstanding) of
Grossman's current revolving credit lender and will advance
additional funds, under a formula based arrangement, to be used
for normal business operations and other cash needs during the
bankruptcy proceedings. Three executive officers of JELD-WEN,
inc., a major supplier of the Company, are directors of the
Company.



Seymour Kroll, President and Chief Executive Officer of
Grossman's, said that the financing would provide Grossman's with
the necessary liquidity to improve inventory levels. Kroll added,
"This will allow us to pursue a successful reorganization
under Chapter 11." The Company also said that employees
would be paid in the normal course of business during the
reorganization proceedings and that it would seek immediate Court
approval to pay employee prepetition wages, salaries and
benefits.



GRS Holding Company, Inc., a wholly owned subsidiary of
Grossman's, and GRS Realty Company, Inc., a wholly owned
subsidiary of GRS Holding Company, also filed for Chapter 11
protection.



Grossman's Inc. operates 15 stores under the name Contractors'
Warehouse in California, Indiana, Kentucky and Ohio, and 28
stores under the name Mr. 2nd's Bargain Outlet in Massachusetts,
New York and Rhode Island.



Statements contained in this release that are not based on
historical fact are "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995. Important factors, beyond the Company's control, that could
cause actual results to differ materially from those in the
forward- looking statements include, but are not limited to, the
need for approvals by the Bankruptcy Court, competition,
stability of customer demand, and the sufficiency of its capital
resources. Undue reliance should not be placed on these
forward-looking statements, which speak only as of the date
hereof. The Company undertakes no obligation to publicly release
revisions to these forward-looking statements to reflect events
or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.



Grossman's Inc. press releases and public filings can be
accessed on the Internet through Business Wire's Home Page:
http://www.businesswire.com/cnn/gros.htm



Mr. 2nd's Bargain Outlet maintains a web site for product
information, store locations and feedback:
http://www.bargain-outlets.com



CONTACT: Grossman's Inc. Steven L. Shapiro, 617/830-4020






Main Street and Main Incorporated announces
fourth quarter and year end results



PHOENIX, Ariz.--April 7, 1997-- - Company Secures $21.3
Million Loan from CNL - MAIN STREET AND MAIN INCORPORATED (Nasdaq
NM Symbol: MAIN), the world's largest franchisee of T.G.I.
Friday's(R) restaurants, today announced financial results for
the fourth quarter and year ended December 30, 1996 along with
the successful refinancing of its primary credit facility.



Revenue for the three months ended December 30, 1996 was
$29,006,000 compared to $28,728,000 for the comparable period in
1995. The net loss for the quarter was $15,070,000, or $1.78 per
share, compared to a net loss of $585,000, or $0.08 per share,
for the fourth quarter ended December 25, 1995. Results for the
1996 fourth quarter include a $12,760,000 restructuring charge.
Excluding the restructuring charge, the net loss for the fourth
quarter would have been $2,310,000, or $0.27 per share.



Revenue for the year ended December 30, 1996 increased to
$122,563,000 from $119,508,000 for the preceding fiscal year. The
net loss for the year was $22,166,000, or $2.73 per share (based
on 8,110,000 shares outstanding), as compared to a net loss of
$1,034,000, or $0.22 per share (based on 4,621,000 shares
outstanding), for the year ended December 25, 1995. Results for
1996 include a $20,208,000 restructuring charge, including the
previously announced $7,448,000 charge taken in the second
quarter. Excluding the restructuring charge, the net loss for
1996 would have been $1,958,000, or $0.24 per share.



Revenue for the year increased 3%, primarily as a result of
the development of four new restaurants. The increase however,
was offset by a decline in same-store sales for the fourth
quarter and year ended December 30, 1996 of 4.8% and 3.2%,
respectively. The Company attributes the loss for the year,
excluding the restructuring charge, to the decline in same-store
sales, higher labor costs and disappointing operating results,
particularly at two locations, the Front Row Sports Grill in
Portland, Oregon, and a recently closed T.G.I. Friday's
restaurant in Denver, Colorado. The Company noted interest
expense declined by approximately $1,218,000 for the 1996 fiscal
year as compared with the 1995 fiscal year as a result of debt
reductions from proceeds of the October 1995 common stock
offering.



The $12,760,000 restructuring charge taken in the fourth
quarter of 1996 consists of a $4,895,000 charge to write off
property and equipment associated with the recently closed T.G.I.
Friday's restaurant in Denver and the Front Row Sports Grill in
Portland. The Company continues to review various alternatives
with respect to the Front Row Sports Grill. In addition, the
Company took a $2,633,000 charge related to four other restaurant
sites that were written down to net realizable value in
anticipation of disposition. In accordance with a recent
accounting pronouncement, Main Street also recorded a charge of
$3,142,000 related to three of its restaurants that it plans to
continue operating, but where cash flows did not support the
carrying value of the assets. The remaining $2,090,000 of the
restructuring charge relates primarily to costs associated with
the impairment of certain non-core assets and severance
arrangements.



Main Street also announced that it has entered into a third
transaction with CNL, Inc., an Orlando, Florida-based lender, to
provide funds to refinance $21.3 million of debt. The Company
noted it would utilize approximately $17.3 million of the loan to
repay an existing term loan and approximately $1.9 million to
repay a note owed to TGI Friday's Inc. The remaining portion will
be used for general corporate purposes. This refinancing, which
lengthens the repayment period from 7 to 15 years, will reduce
debt service payments by approximately $1.7 million per year over
the next five years.



In conjunction with the repayment of a promissory note
previously issued to TGI Friday's Inc., the Company and TGI
Friday's Inc. have also reached agreements in principle relating
to the development of T.G.I. Friday's restaurants. Under these
arrangements, the Company will be required to develop a total of
eight new restaurants during the next three years in its
exclusive development territories of Arizona, Nevada, New Mexico,
Northern California, and the Kansas City metropolitan area and
will no longer develop new restaurants in Colorado, Oregon and
Washington. To achieve better market penetration, the Company and
TGI Friday's Inc. will each develop restaurants in the San Diego
and Los Angeles, California area with the Company being required
to develop a total of six new restaurants during the next three
years.



Bart A. Brown, Jr., President and CEO of Main Street, said,
"Over the past year, we have stated that we intended to take
steps to enhance Main Street's balance sheet and, therefore, our
ability to grow the Company's profits. We believe that the
refinancing and the agreement in principle with TGI Friday's Inc.
repositions the Company for the future. In addition, we recognize
that the Company's operating expenses for 1996 can be reduced
significantly and we are striving to get these costs in
line."



MAIN STREET AND MAIN INCORPORATED is the world's largest
T.G.I. Friday's franchisee, operating 46 T.G.I. Friday's
restaurants and one Front Row(R) Sports Grill Restaurant.



                    MAIN STREET AND MAIN INCORPORATED
                  CONSOLIDATED STATEMENTS OF OPERATIONS
                               (Unaudited)
                                    


                                    
                                   Three Months Ended      Year Ended
                                  12/30/96 12/25/95   12/30/96 12/25/95
        


        Revenue                       $ 29,006 $ 28,728  $ 122,563$ 119,508
        


        Restaurant Operating Expenses:
          Cost of sales                  8,345    8,221     35,089   34,005
          Payroll and benefits           9,666    8,863     38,858   36,769
          Depreciation and amortization  1,226    1,126      4,586    4,353
          Other operating expenses       9,421    8,741     36,944   35,250
          Total restaurant operating
           expenses                     28,658   26,951    115,477  110,377
        


        Income from restaurant operations  348    1,777      7,086    9,131
        


          Depreciation and amortization    363      305      1,450    1,331
          General and administrative
           expenses                      1,470    1,127      4,388    4,410
          Asset impairments and
           restructuring charges        12,760      ---     20,208      ---
        


        Operating income (loss)        (14,245)     345    (18,960)   3,390
        


          Interest expense, net            825      930      3,206    4,424
        


          Net (income) loss before
           income taxes                (15,070)    (585)   (22,166)  (1,034)
        


          Provision for income taxes        --       --        ---      ---
        


          Net income (loss)           $(15,070) $  (585) $ (22,166)$ (1,034)
        


          Net Income (Loss) Per Share $  (1.78) $ (0.08) $   (2.73)$  (0.22)
        


          Weighted average shares
           outstanding                   8,452    7,599      8,110    4,621
        -0-
        


           MAIN STREET AND MAIN INCORPORATED AND SUBSIDIARIES
                       CONSOLIDATED BALANCE SHEETS
                             (in thousands)
        


                                        December 30,       December 25,
                                                 1996              1995
        ASSETS Current Assets
        


         Cash and cash equivalents          $    2,613       $    4,741
         Accounts receivable, net                1,248            2,484
         Inventories                             1,275            1,517
         Prepaid expenses                          173              461
         Assets held for disposal               10,929               --
        Total current assets                16,238            9,203
        


        Property and equipment, net             32,226           44,104
        Other assets, net                        4,780            6,287
        Franchise costs, net                    16,354           22,761 Note
        receivable                          1,250            6,250
        


                                         $  70,848        $  88,605
        


        LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities
         Current portion of long-term debt   $   2,523        $   4,567
         Accounts payable                        3,750            3,543
         Other accrued liabilities              11,308            8,941
        Total current liabilities           17,581           17,051
        


        Long-term debt, net of current portion  33,809           31,204
        


        Other liabilities and deferred credits   2,873            3,089
        


        Commitments and contingencies               --               --
        


        Stockholders' Equity Common stock, $.001 par value,
         40,000,000 shares Authorized;
         8,718,491 and 7,951,825 shares issued
         and outstanding in 1996 and 1995,
         respectively                                9                8
        Additional paid-in capital              41,694           40,205
        Accumulated deficit                    (25,118)          (2,952)
        


                                            16,585           37,261
                                         $  70,848        $  88,605
               


        


Note: On January 16, 1997, the Company sold five restaurants
in Northern California for $10,575,000 in cash and entered into a
Management Agreement with the buyer to manage the restaurants.
This transaction resulted in a gain before taxes of approximately
$1,800,000, which will be recognized in the first quarter of
1997. Of the total proceeds, $8,000,000 was used to reduce the
Company's Term Loan with the balance used for working capital
purposes. The net carrying value of the five restaurants sold was
approximately $8,669,000 at December 30, 1996 and is included in
assets held for disposal. The breakout of long-term debt between
current and long-term reflects the subsequent refinancing
discussed above.



CONTACT: Mark Walker Jeffrey Volk/Keith Lippert Chief
Financial Officer Lippert/Heilshorn & Assoc., Inc. (602)
852-9000 (212) 838-3777 jeff@lhai.com