---

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

     Wednesday, October 8, 1997, Vol. 1, No. 33
                       
                      Headlines

ALLIANCE ENTERTAINMENT: Committee Request for UK Counsel
ARROW TRANSPORTATION: Rejects Collective Bargaining
BUMBLE BEE: Disclosure Statement Approved
CALDOR: New York Stock Exchange Suspends Trading Of Stock
CAMPO ELECTRONICS: To Keep Three Louisiana Stores

50-OFF STORES: Agent Requests Extension for Class 7 Claims
FLEXEL: Amended and Restated Plan of Liquidation
KIA GROUP: Won’t Accept Court Receivership
MALLORY ELECTRIC: Files for Bankruptcy
PAYLESS CASHWAYS: Sale of Closed Stores

PAYLESS CASHWAYS: Wants Search Firm to Find Board Candidates
RICKEL HOME: Closing Stores and Cutting Jobs
STRAWBERRIES: Asset Sale Receives Court Approval

                    -----

ALLIANCE ENTERTAINMENT: Committee Request for UK Counsel
--------------------------------------------------------
Alliance Entertainment Corp.'’s Official Committee of
Unsecured Creditors has applied for permission to retain
Wilde Sapte as special counsel to represent it in matters
concerning the law of the United Kingdom, where Alliance has
operations and property.


ARROW TRANSPORTATION: Rejects Collective Bargaining
---------------------------------------------------
Arrow Transportation Co. of Delaware has been granted
approval by bankruptcy judge Polly S. Higdon of the District
of Oregon to reject its collective bargaining agreements
with the International Association of Machinists and
Aerospace Workers, subject to Arrow’s payment of $500 to
each member of the IAM&AW locals employed by Arrow on
September 25, 1997.


BUMBLE BEE: Disclosure Statement Approved
------------------------------------------
Bumble Bee Seafoods, Inc., had its updated disclosure
statement approved on September 29, 1997, to accompany its
Joint Plan filed on August 18, 1997.

A hearing on confirmation of the plan is set for November
12, 1997, before judge John P. Hargrove in the Southern
District of California. The last day to file objections is
October 29.


CALDOR: New York Stock Exchange Suspends Trading Of Stock
----------------------------------------------------------
Caldor Corp. stock has been suspended from trading on The
New York Stock Exchange, which says the financially plagued
retailer no longer meets its criteria for listing.  NYSE has
asked the Securities and Exchange Commission for permission
to delist the issue.

The action came days after Caldor announced that although it
hopes to emerge from bankruptcy in spring of 1998, "it would
appear unlikely" that current stockholders will recover any
money.

Caldor traded for more than $20 a share in early 1995 but
fell to $5 a share after the company filed for bankruptcy in
September 1995.  Recently, stock has been trading for less
than $2 a share.

Wendi Kopsick, a Caldor spokeswoman, said the stock
exchange's action "in no way alters the company's plans to
emerge from Chapter 11 successfully." She said the Caldor
still has access to significant loan money and has reported
improving earnings.

The company reported a net loss for the second quarter of
$18 million, or $1.07 a share, compared with a net loss of
$28.4 million, or $1.67 a share, in the same period last
year.

Net sales for the quarter were $598 million, down 3.9
percent, compared with $622 million last year.  Comparable-
store sales were down 2.3 percent.


CAMPO ELECTRONICS: To Keep Three Louisiana Stores
--------------------------------------------------
Campo Electronics, Appliances and Computers, Inc., has
elected to assume three leases for stores in New Orleans,
Kenner, and Jefferson, Louisiana, because the store
locations are profitable and bring the bankruptcy estate
income over and above expenses. The decision comes after the
debtor was granted an extension until October 3, 1997, to
accept or reject the leases.


50-OFF STORES: Agent Requests Extension for Class 7 Claims
------------------------------------------------------------
50-OFF Stores, Inc., has asked for additional time for its
Class 7 Agent, J.A. Compton, to file claims objections.
Although the claims objection deadline is set “no later than
six months after the Effective Date” of the confirmed plan
of reorganization, because of the immense number of Class 7
claims and the time needed to diligently review the claims,
the agent requests an extension of the deadline for an
additional six months, to June 16, 1998.


FLEXEL: Amended and Restated Plan of Liquidation
-------------------------------------------------
Flexel, Inc., had its disclosure statement approved
September 23, 1997, by Judge Robert E. Brizendine of the
Northern District of Georgia, Atlanta Division.  A hearing
on Confirmation of the Plan is set for November 6, 1997; the
last day for written acceptances or rejections to be filed
is October 27, 1997.

On July 21, Flexel sold substantially all of its assets and
certain assets of affiliated partnerships to UCB Cello,
Inc., for $6.5 million in cash, with a return to the debtor
of $347,751 representing a draw on a prepetition letter of
credit and the subordination of claims in excess of $24
million.  UCB also agreed to purchase all output form
Flexel’s Covington, Indiana, facility for up to 120 days
after the closing of the UCB Transaction calculated to
produce cash neutral operations by Flexel (the Cellophane
Supply Agreement).

On June 13, 1997, Flexel received permission to employ
William G. Hays, Jr., and William G. Hays & Associates,
Inc., to serve as Responsible Persons to oversee Flexel’s
operations and wind down its affairs after the closing of
the UCB Transaction to act as Liquidating Agent for
substantially all of Flexel’s remaining assets and some of
the assets of its affiliated partnerships.

The Restated Plan provides that funds will be distributed to
claimants from (1) the UCB Transaction and the Cellophane
Supply Agreement, (2) net cash proceeds from liquidation of
remaining assets after payments of sale expenses, (3) net
proceeds from any bankruptcy recoveries after litigation
expenses, (4) repayment of a $400,000 loan made to KWB I (an
affiliated partnership) under the UCB Transaction, and (5)
proceeds shared with KWB I under the UCB Transaction in
which Flexel gets 50 percent of nets sales proceeds in
excess of $1.2 million from the sale of Covington Plant.

Classification of Claims

Class 1
Administrative Claims
Unimpaired

To be paid by Liquidating Agent in full, in cash, on or
before the later of (a) 30 days after the Effective Date or
the date of a Final Order allowing the claim, (b) the date
on which such claims are due and payable in the ordinary
course of business, (c) on application and Final Order of
the bankruptcy court, or in the case of any professional
persons in accordance with the fee procedure entered in the
Order for Monthly Payment of Professional Fees, or (d) on
such other terms that may be agreed to between the debtor
and claimants.

Class 2
Priority Claims
Unimpaired

To be paid by the Liquidating Agent in full, in cash, on or
before the later of (a) 30 days after the Effective Date or
the date of a Final Order allowing the claim, (b) on such
other terms as may be agreed to between the debtor and
claimants, or (c) as may be otherwise directed by the
Bankruptcy Court.

Class 3
Secured Claims
Unimpaired

To be compensated by the Liquidating Agent in full, in cash,
on or before the later of (a) 30 days after the Effective
Date or the date of a Final Order allowing the claim, (b) by
delivery to such holder of the collateral securing the
claim, (c) on such other terms as may be agreed to between
the debtor and claimants, or (d) as may otherwise be
directed by the Bankruptcy Court.

Class 4
General Unsecured Claims
Impaired

This class comprises allowed claims not entitled to
priority, including the Covington and Flexel Pension Plans
terminated September 18, 1997; prepetition general business
obligations; claims arising form rejection of executory
contracts; and any deficiency claims.

To receive distribution from the debtor’s estate on a pro
rata basis based on the total amount of Class 4 Claims
without interest, to come from the cash on hand after
payment of Class 1,2, and 3 Claims and after a reserve for
professional fees and other administrative costs and a full
reserve for any disputed Unsecured Claims that have not been
liquidated or finally established as of the distribution
date.  The First Distribution will be within 30 days after
the Effective Date.

The Second Distribution will be made by the Liquidating
Agent on an interim basis when sufficient funds exist to
make such distributions practical.  A final distribution may
occur after Flexel has resolved all litigation, after all
assets have been liquidated, after final determination has
been made regarding all claims, after the Agent has
completed administration of the estate, and after additional
Administrative Claims in Class 1 have been fully paid or
reserved.  

Late Field Claims, Subordinated Claims, and Insider Claims
will be paid on a pro rata basis without interest if Allowed
Claims in Classes 1-4 have been paid in full.

Class 5
Holders of Equity Interests

At confirmation of the plan, all outstanding stock of Flexel
will be canceled and no new stock will be issued.  


KIA GROUP: Won’t Accept Court Receivership
-------------------------------------------
Kia Group rejected the demand of its bank creditors to apply
for court receivership by October 6.  According to The
Financial Times, the government has also refused to bail out
the conglomerate, which is still under temporary court
protection.  If it cannot keep operations functioning on
cash flow, Kia may be slated to become Korea’s biggest
bankruptcy case.

Kia Group's debt as of May 31 stood at $6 billion to banks
and $4.97 billion to nonbanking institutions.

Seven merchant banks in Seoul are faced with mounting cash
flow problems, with a total of $3.7 billion of bad loans to
Kia and two other insolvent business groups, Jinro and
Dainong, Yonhap News Agency said.

"Should the Kia crisis drag on for a long time, these
merchant banks would face the risk of going insolvent," an
official of an insurance company said.

Daewoo Economic Research Institute reported that if the Kia
crisis continues, financial jitters would intensify, with
interest rates shooting up and South Korea's won sliding in
value.

Kia is scrounging for cash as total sales sank 14 percent
last month; its domestic market share has shrunk 20 percent
and production is falling due to lack of parts from cash-
strapped suppliers.  The group is selling its steel and
construction units and some real property to raise capital.

The Korean Confederation of Trade Unions (KCTU) said the
unions of South Korea's main auto companies -- Kia Motors
Corp., its commercial affiliate Asia Motors, Sangyong Motors
Co., Daewoo Motors Co., Hyundai Motor Co. and Hyundai
Precision and Industry -- will strike next week unless the
government comes out with measures to help bail out Kia.


MALLORY ELECTRIC: Files for Bankruptcy
---------------------------------------
Mallory Electric, an auto parts maker based in Carson City,
Nevada, has filed for Chapter 11 bankruptcy protection
following a similar filing by its parent company, Super
Shops.

Mallory's secured debt is listed in excess of $12 million
but that debt is directly tied to the Super Shops' debt,
according to bankruptcy attorney Jeff Resler.  "It's a
collective group that needs collective reorganization," says
Resler.

Mallory, which employs 220 people, plans no layoffs as it
works with Super Shops to reorganize their finances.  As a
wholly owned subsidiary, Mallory sells its products at more
than 160 Super Shops stores nationwide.


PAYLESS CASHWAYS: Sale of Closed Stores
----------------------------------------
Payless Cashways, Inc., has found buyers, pending court
approval, for a number of its closed former store locations.  
Devon Capital Management L.P. has agreed to purchase two
properties in Houston for $965,000 each, one in Pasadena for
$1.22 million, and one in Salem, Massachusetts, for $3
million.  A location in Webster, Texas, will be sold for
$2.3 million to Safe-Keeping Storage Corporation, and one in
Rancho Cordova, California, will be sold for $2.3 million to
Benvenuti Kassis Properties.  An unimproved tract of land
adjacent to a store that Payless is not closing in Lake
Dallas, Texas, will be sold for $2.50/square foot of a net
survey to Ronald P. Marlin.


PAYLESS CASHWAYS: Wants Search Firm to Find Board Candidates
------------------------------------------------------------
Payless Cashways, Inc., has asked the bankruptcy court for
authorization to hire the professional search firm of
Spencer Stuart to identify viable candidates to be selected
by its Creditors Committee and Secured Bank Group for
appointment to Payless’s board of directors.  According to
the terms of the proposed plan of reorganization, the
committee selects two members and the bank group selects
five to sit on the nine-member board that will take over on
the effective date of the plan.

Payless says it supports the efforts to find high-quality
candidates and believes professional assistance is necessary
and that it should pay for it.  Beginning October 15, 1997,
Payless will pay Spencer Stuart a total of $350,000 in four
monthly installments.


RICKEL HOME: Closing Stores and Cutting Jobs
---------------------------------------------
Rickel Home Centers says that it will close its 49 home
improvement stores and cut 2,800 jobs in New Jersey,
Pennsylvania, New York, and Delaware by the end of the year
because it has run out of cash after almost two years in
bankruptcy.  The company, based in South Plainfield, New
Jersey, filed for Chapter 11 reorganization on January 10,
1996.  Rickel says that its creditors have agreed to the
store closings.  


STRAWBERRIES: Asset Sale Receives Court Approval
-------------------------------------------------
Strawberries, Inc., has received approval of its agreement
to sell substantially all of its assets free and clear to
Record Town, Inc., from the Bankruptcy Court in the District
of Delaware.


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.
     
       * * *  End of Transmission * * *