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  T R O U B L E D   C O M P A N Y   R E P O R T E R

     Friday, October 3, 1997, Vol. 1, No. 30
                       
                   In This Issue


AMERICAN-ENTERTAINMENT: Changes in Terms of Purchase
BOND PRICING, DLS CAPITAL PARTNERS*
DIXONS U.S. HOLDINGS: Needs More Time to File Plan
FRETTER: Sale of Real Property in Auburn, Mass.
GROSSMAN’S: Seeks Additional Accountant/Financial Advisor

HARRAH'S JAZZ: Committee Won’t Continue Negotiating Plan
KIA GROUP: Vendors/Subcontractors Face Bankruptcies
POCKET COMMUNICATIONS: To File Disclosure After Joint Plan
STEINBERG’S: Company Asks Customers for Patience

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AMERICAN-ENTERTAINMENT: Changes in Terms of Purchase
-----------------------------------------------------
American Entertainment Group, Inc., and Tel.n.Form
Interactive Communications Corporation have agreed to change
their preliminary agreement of August 29, 1997, whereby AETG
is to acquire Tel.n.Form.

As amended on September 18, 1997, AETG would acquire 100
percent of the issued and outstanding shares of Tel.n.Form
in exchange for 200,000 shares of its preferred stock at $10
per share (formerly 200,000 common shares at $10 per share).

Upon obtaining approval of AETG's Chapter 11 Plan of
Reorganization and the completion of satisfactory financing,
110,000 preferred shares are to be redeemed.  The closing of
the transaction is additionally subject to due diligence and
other terms and conditions.

The parties anticipate an escrow closing on or about October
15, 1997.


BOND PRICING, DLS CAPITAL PARTNERS*
-----------------------------------
Following is a list of oft-quoted bankrupt and distressed
bonds, as well as current markets. (f) denotes flat.

Alliance Entertainment 11 1/4 ‘05 - 15 - 19 (f)
Amer Telecasting 0/14 1/2 ‘04 - 36 1/2 - 37 1/2
Bradlees 11 ‘02 - 7 - 9 (f)
Brunos 10 1/2 ‘05 - 58 1/2 - 59 1/2
Dictaphone 11 3/4 ‘05 - 80 - 84
Flagstar 11 1/4 ‘04 - 45 1/2 - 46 1/2
Grand Union 12 ‘04 - 45 1/2 - 46 1/2
Harrah’s Jazz 14 1/4 ‘01 - 37 - 38
Hechinger 6.95 ‘03 - 74 - 75
Hechinger 5 1/2 ‘12 - 42 - 44
Mills Department Stores 12 1/2 ‘03 - 82 - 84
Home Holdings 8 5/8 ‘03 - 29 - 32 (f)
In-flight Phone 0/14 ‘02 - 6 - 10 (f)
Levitz Furniture 9 5/8 ‘03 - 31 - 33 (f)
Liggett 11 1/2 ‘99 = 45 - 50 (f)
Marvel 0 ‘98 - 10 - 11
Mobilemedia 9 3/8 ‘07 - 23 - 24 (f)
Mosler 11 ‘03 - 83 - 85
Musicland 9 ‘03 - 87 1/2 - 89
Payless Cashways 9 1/8 ‘03 - 16 - 17 (f)
Penn Traffic 9 5/8 ‘05 - 64 1/2 - 65 1/2
Stratosphere 14 1/4 ‘02 - 64 - 68 (f)
Trump Castle 11 3/4 ‘03 - 93 - 94
Trump Atlantic 11 1/4 ‘06 - 96 1/2 - 97
Wickes 11 5/8 ‘03 - 93 - 94


DIXONS U.S. HOLDINGS: Needs More Time to File Plan
----------------------------------------------------
Dixons U.S. Holdings, Inc., requests an 90-day extension
from September 29 through and including December 29, 1997,
of the exclusive period to file a plan of reorganization and
through February 27, 1998, to solicit acceptances.  Dixons
says it has made significant progress in the bankruptcy
proceedings, but the size and complexity of the cases merit
more time to allow it to resolve the myriad issues impacting
plan formulation.


FRETTER: Sale of Real Property in Auburn, Mass.
-----------------------------------------------
Fretter, Inc., would like to sell its former store location
in Auburn, Massachusetts, to Ellsworth-Brockton Limited
Partnership free and clear of liens for $1.2 million in
cash, subject to higher and better bids.  Ellsworth has put
down an earnest money deposit of $100,000 in cash or
cashier’s check, but will receive a refund plus a breakup
fee of $15,000 if Fretter accepts another offer.  Competing
bids must be at least $25,000 greater than the purchase
price, plus the amount of the breakup fee plus $10,000, and
accompanied by a $100,000 deposit.


GROSSMAN’S: Seeks Additional Accountant/Financial Advisor
-------------------------------------------------------
Grossman’s, Inc., requests the bankruptcy court’s permission
to hire the firm of EAB Associates as accountants and
financial advisor as of October 10, 1997.  The company says
due to the number of employees who have left for other jobs,
it needs additional personnel to perform certain accounting
and financial advisory services.  These services will not
duplicate any of the services provided by Ernst & Young, the
firm Grossman’s has retained as accountant, auditor, and
financial advisor working primarily on the business plan and
plan of reorganization.  


HARRAH'S JAZZ: Committee Won’t Continue Negotiating Plan
---------------------------------------------------------
Harrah's Jazz Company has been advised today by the Official
Bondholders Committee in its Chapter 11 reorganization case
that the committee is terminating negotiations concerning
modifications to the plan of reorganization previously
confirmed by the United States Bankruptcy Court but not yet
effective.

The committee advised Harrah's that rather than engage in
further negotiations towards a consensual plan, it intends
to pursue its remedies in litigation.  The negotiations were
over the chief obstacle to the effectiveness of the plan,
the state legislature's refusal to approve the amended
casino operating contract.  The governor of Louisiana has
insisted on a guaranty to secure minimum tax payments of
$100 million to the Louisiana Gaming Control Board in each
year of the casino’s operation called for by the amended
casino operating contract.

On July 10, 1997, Harrah's Entertainment, Inc. advised
Harrah's Jazz Company that it would not commit to providing
additional DIP financing beyond the earliest of providing
$30 million or September 30, 1997.  The financing expired on
that date and has not been extended or replaced.

Harrah’s New Orleans Investment Company has moved the
bankruptcy court of the Eastern District of Louisiana for
authorization to obtain a DIP loan for up to $50,000 from
Harrah’s Entertainment, Inc., or an affiliate to pay its
ongoing expenses pending the confirmation of a plan.  The
loan would carry 8 percent annual interest be due and
payable on December 31, 1998 or on the effective date of a
confirmed plan of reorganization, on the conversion of the
case to Chapter 7, on dismissal, on the appointment of a
trustee, or on any stay, reversal, modification, or other
amendment of the DIP Financing Order.

Harrah’s requests an expedited hearing to borrow $20,000 to
meet its present obligations.


KIA GROUP: Vendors/Subcontractors Face Bankruptcies
---------------------------------------------------
Vendors and subcontractors for Kia Group subsidiaries Kia
Motors and Asia Motors may face a chain of bankruptcies as
creditors stopped financial supports to Kia, according to
The Korea Economic Daily.

Since Kia Motors and Asia Motors received a court allowance
to freeze all debts and assets, Kia's vendors are unable to
discount 30 percent of their bills for parts supplies as in
the past.  Accordingly, the suppliers will have to directly
receive money for bills from Kia subsidiaries when the bills
are due, leading them in a financial squeeze.  If Kia does
not settle in cash, these bills will be worthless under
court receivership.

Currently, about 800 parts makers depend most of their
turnovers on Kia subsidiaries and another 5,000 vendors
depend partially on Kia.  Thus far, Kia Motors and Asia
Motors have minimally settled accounts for core parts they
need to operate auto plants.

However, it is doubtful that Kia will have the capability of
settling about 20 billion won in cash each day for supplies,
and industry observers fear that the nation's auto parts
industry will crumble without help from financial
institutions.

Creditors are not likely to extend additional financial
assistance to Kia's vendors.  Creditors, which have
supported about 400 billion won by purchasing Kia-issued
bills, have also been strapped with heavy loans to Kia.


POCKET COMMUNICATIONS: To File Disclosure After Joint Plan
----------------------------------------------------------
Pocket Communications, Inc., has asked the bankruptcy court
of the District of Maryland, Northern Division, to set
October 9, 1997, as the date by which it must file a
disclosure statement pertaining to the Debtors’ Joint Plan
of Reorganization, which was filed as required by the court
on September 29, 1997.  Pocket says it worked diligently
under severe time constraints and notwithstanding
significant issues with the FCC to formulate and file the
joint plan by the deadline.  However, the very recent
announcement of FCC restructuring of the C-Block prohibited
the filing of a disclosure statement with the plan.


STEINBERG’S: Company Asks Customers for Patience
-------------------------------------------------
Steinberg's Inc. customers with questions about warranties
and down payments will have to wait a while before receiving
answers from the 20-store retailer, which filed for
bankruptcy last week, listing assets of $24.1 million and
liabilities of $22.2 million.

According to the Cincinnati Post, Leonard Eppel, a crisis
manager advising the electronics store chain, said the
company is working on a plan to deal with customers.  "We
are sensitive to these issues," he said.  "People need to
give us a week or 10 days before we can address their
concerns."

Eppel did say part of the plan under consideration is to
"provide some kind of warranty service." He said the company
would announce the plan after it has been finalized

Bankruptcy Court Judge J. Vincent Aug has issued a temporary
restraining order against Steinberg's, preventing it from
selling inventory owned by Japanese electronics manufacturer
Mitsubishi Corp., which has a $450,000 reclamation claim
against Steinberg's.

Steinberg's is trying to keep the stores open to sell
merchandise on a paid-in-full basis, but wants to have a
liquidation sale in as many stores as possible.

Aug set another hearing in the case for October 9, 1997, to
consider a variety of issues.


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 and
Rebecca A. Porter, Editors.

Copyright 1997.  All rights reserved.  This
material is copyrighted and any commercial use,
resale or publication in any form (including e-
mail forwarding, electronic re-mailing and
photocopying) is strictly prohibited without prior
written permission of the publishers.

Information contained herein is obtained from
sources believed to be reliable, but is not
guaranteed.

The TCR subscription rate is $575 for six months
delivered via e-mail.  Additional e-mail
subscriptions for members of the same firm for the
term of the initial subscription or balance
thereof are $25 each.  For subscription
information, contact Christopher Beard at 301/951-
6400.
     
* Bond pricing supplied by DLS Capital Partners, Dallas,
Texas.

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