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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 24, 1997 Vol. 1, No. 46  
  
                   Headlines  

ALLIANCE ENTERTAINMENT: Notice of Presentment of Stipulation
BARNEY’S: Hearing to Reject Two Leases
CAJUN ELECTRIC: Rate Proposal Approved
DOW CORNING: Creditors Object to Disclosure Statement
GROSSMAN’S: Hearing to Approve Disclosure Statement

GUY ATKINSON: Hearing For Employee Retention Program
KENETECH: Seeks Order Authorizing Sale
MARVEL: Response to Banks
MONTGOMERY WARD: Agreement With ValueVision Restructured
WESTERN FIDELITY : Court Approves Agreement

DLS CAPITAL:  Bond Pricing for week of October 20

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ALLIANCE ENTERTAINMENT: Notice of Presentment of Stipulation
------------------------------------------------------------
The debtors and debtors in possession, Alliance  
Entertainment Corp. et al.,  will present for signature a  
Stipulation and Order dated October 20, 1997, by and among  
Alliance Entertainment Corp. and Triad Records, Inc.  
regarding Triad’s Reclamation Claim on November 3, 1997.


BARNEY’S: Hearing to Reject Two Leases
--------------------------------------
At a hearing on October 30, 1997, Barney’s Inc., et al. will  
seek authorization to reject two nonresidential
real property leases with 147 West 17th Street, Inc.

The entity 147 West 17th Street, Inc. is  owned by Phyllis  
Pressman, as landlord, and Barney’s, as tenant, and is for  
certain space used as parking lots located at 147 West 17th  
Street, New York, NY and 201 West 17th Street, New York, NY.   

The parking lots were leased in order to provide free  
parking to customers of the debtors’ 17th Street retail  
store and warehouse sales.  The 17th Street retail store was  
closed on August 16, 1997 and the debtors’ warehouse sales  
take place during no more than 25 days a year.  Accordingly,  
Barney’s argues that at this time, it makes little economic  
sense for Barney’s to continue to pay rent in the aggregate  
amount of $30,000 per month, to lease the parking lots.


CAJUN ELECTRIC: Rate Proposal Approved
--------------------------------------
Louisiana Generating LLC said Wednesday it was pleased with  
the Louisiana Public Service Commission's approval of its  
rate proposal for Cajun Electric Power Cooperative.

Louisiana Generating is one of three bidders competing for  
the non-nuclear assets of Cajun, which sought bankruptcy  
protection in December 1994 after an ill-fated investment in  
the River Bend nuclear power plant near St. Francisville,  
La.  Louisiana Generating is made up of three partners    
Southern Company, NRG Energy Inc. and Zeigler Coal Holding  
Company.

At a meeting Wednesday, the PSC voted that Louisiana  
Generating's proposed rate path is acceptable by stating  
that it is "not presumptively unreasonable and in the  
public's best interest."

"Getting the support of the PSC is an important  
accomplishment for us. We're optimistic that the bankruptcy  
proceedings will now move forward and come to a close  
quickly, allowing customers to benefit soon from lower rates  
and the elimination of uncertainties," said Gary Kubik,  
Southern Company's project director for Louisiana  
Generating.

Louisiana Generating's plan is also formally endorsed by the  
Rural Utilities Service, Cajun's largest creditor, and Ralph  
R. Mabey, Cajun's court-appointed bankruptcy trustee. A  
decision in the case will be made by the U.S. Bankruptcy  
Court of the Middle District of Louisiana.

Under Louisiana Generating's proposal, rates remain below  
Cajun's pre-bankruptcy rates   5.4 cents per kilowatt-hour    
for approximately the next 25 years.  The average rate in  
the first year is 3.88 cents per kilowatt-hour and decreases  
to 3.73 cents per kilowatt-hour in year six. The average  
rate over 15 years is 3.96 cents per kilowatt-
hour.

Louisiana Generating is hoping for rapid closure in the  
bankruptcy case and has calculated that for every day a  
decision is delayed, it is costing Louisiana rate payers  
more than $81,000, or more than $29 million a year in higher  
rates.

"Louisiana Generating applauds the swift and decisive action  
of the PSC in sending its recommendation to the bankruptcy  
court and helping to bring a close to the proceedings," said  
Michael O'Sullivan, NRG's representative for Louisiana  
Generating.

Cajun is the seventh-largest utility cooperative in the  
United States generates and sells electricity to a group of  
12 distribution cooperatives that deliver power to more than  
1 million people in Louisiana.

Louisiana Generating's proposal also honors all of Cajun's  
existing incentive rates and offers new incentive rates that  
are better than the existing ones.  It provides $500,000 per  
year to support the Association of Louisiana Electric  
Cooperatives or a similar organization, and it provides  
another $500,000 for an anti-takeover fund for Cajun  
members.

Louisiana Generating has negotiated contracts with Cajun's  
unions. It also has settled, subject to court approval, the  
unsecured claims of railroad, barge and coal companies,  
which exceed $900 million.


DOW CORNING: Creditors Object to Disclosure Statement
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Creditors, Dennis Hurwitz, M.D., on behalf of himself and a  
putative class of Pennsylvania plastic surgeons that he  
represents in a class action against the debtor and certain  
other defendants, and creditor Cathleen Scott all object to  
the amended Disclosure Statement of the debtor.

They claim that the disclosure statement fails to clearly  
disclose to creditors that the consideration that the Dow  
Chemical Company is providing to the debtor in consideration  
for obtaining a release of any claims against it is  
substantially less than it appears because the credit  
facility is merely a loan that the debtor must repay at the  
end of ten years.   

Secondly, they claim that the  disclosure statement fails to  
properly disclose to creditors that they may have  
significant claims against Dow Chemical, which will be  
released, and  that there is not sufficient detail about the  
consideration that Dow Chemical is providing in exchange for  
the broad release it seeks to obtain through the plan.  And  
finally, that the statement set forth an incorrect   
statement of law about whether a creditor who votes against  
the plan will nonetheless be bound by the plan’s release of  
non-debtor parties.


GROSSMAN’S: Hearing to Approve Disclosure Statement
---------------------------------------------------
On October 27, 1997 a hearing will be held on the motion of  
debtors, Grossman’s Inc., GRS Holding Company, Inc. and GRS  
Realty Company, Inc. to approve the Disclosure Statement,  
approve the solicitation package, approve the form and  
manner of notice of the confirmation hearing and of related  
issues and establishing record dates and approving  
procedures for distribution of solicitation packages,  
approving form of ballots, establishing the last date for  
receipt of ballots, approving procedures for vote tabulation  
and establishing deadline and procedures for filing  
objections to confirmation of the plan.


GUY ATKINSON: Hearing For Employee Retention Program
----------------------------------------------------
A hearing will be held on November 10, 1997 on a motion for  
an order authorizing an Employee Retention Program filed by  
Guy F. Atkinson Company of California and Guy F. Atkinson  
Company.

The general program covers most regular, full time, salaried  
employees as of the date of the hearing.

About 85 people will receive Retention Compensation equal to  
1/2 month of their base pay in effect as of September 30,  
1997 for each full month of continuing employment from  
October 1, 1997 through the Completion date.   

About 21 people will receive Retention Compensation equal to  
1 month of their base pay in effect as of September 30, 1997  
for each full month of continuing employment from October 1,  
1997 through the Completion Date.    


MARVEL: Response to Banks
-------------------------
Marvel Entertainment Group, Inc. et al., High River Limited  
Partnership and Westgate International jointly responded to  
the statement of the Banks with respect to the prior motion  
for entry of an Order approving a compromise and settlement  
among the debtors, the postpetition lenders and parties in  
interest.

The respondents claim that the Banks’ overriding myth must  
be exploded.  “The Banks appear to be blind to the fact  
that, despite their having asserted $610 million in fully  
secured claims against the debtors, the are - and have  
always existed - significant claims and causes of action  
available against the banks which, when asserted, could  
result in the equitable subordination of their alleged  
liens and claims and five rise to affirmative liability.

The respondents claim that despite facing an extremely  
hostile group of banks, the New Board has taken significant  
steps to stabilize operations, safeguard the debtors’  
assets and businesses, maintain a viable work force, and  
attempt to steer these cases toward a consensual resolution.

To the Banks allegation that “the debtors have been starving  
their Fleer subsidiary of any cash for operations and have  
not accorded the slightest attention to Fleer’s operational  
and reorganizations issues,”  the respondents say that it  
has been the banks who have interfered with and impaired  
Fleer’s operations.

The respondents also claim that after negotiating with  
Chase, it turned out that there was no support for the deal.   

The banks have requested the appointment of a trustee, but  
the respondents claim that there is no evidence that one is  
necessary.


MONTGOMERY WARD: Agreement With ValueVision Restructured
--------------------------------------------------------  
Montgomery Ward and ValueVision  have restructured their   
agreement on the use of  ValueVision International, Inc.  
(Nasdaq: VVTV) an integrated electronic and print media  
direct marketing company and the nation's third-largest  
television home-shopping network, and Montgomery Ward & Co.,  
Incorporated today announced the restructuring of the  
operating agreement between the two companies governing the  
use of the Montgomery Ward name.

In exchange for Montgomery Ward's return to ValueVision of  
warrants covering the purchase of 3.8 million shares of  
ValueVision common stock, ValueVision will cede exclusive  
use of the Montgomery Ward name for catalog, mail order,  
catalog "syndications" and television shopping programming  
back to Montgomery Ward.  Under the agreement, which  
requires the approval of the U.S. Bankruptcy court in  
Delaware, ValueVision will cease the use of the Montgomery  
Ward name in all outgoing catalog, syndication, and mail  
order communication by March 31, 1998, with an orderly wind  
down of incoming orders and customer service permitted after  
that date.   

As such, Montgomery Ward will regain full control over all  
marketing rights to its credit card customers.  The  
agreement also calls for the repurchase by ValueVision of  
1,280,000 of its common stock currently owned by Montgomery  
Ward, at a price of $3.80 per share.

The agreement includes the reduction of Montgomery Ward's  
minimum commitment to support ValueVision's cable television  
spot advertising purchases.  Under the new terms, Montgomery  
Ward's commitment is reduced from $4 million to $2 million  
annually, and the time period decreased from five years to  
three years.  In addition, the agreement limits ValueVision  
to offer the Montgomery Ward credit card only in conjunction  
with its various television offers and subject to the  
normal approvals by the credit card grantor.


WESTERN FIDELITY : Court Approves Agreement
-------------------------------------------
On October 14, 1997 the Court approved the agreement between  
the debtor, Western Fidelity Funding, Inc., BNY Financial  
Corporation, Empire Indemnity Insurance Co., and CSC  
Logic/MSA, LLP D/B/A Loan Servicing Enterprise and the  
Portfolio Servicing Agreement attached to the agreement.   

The Court further modified the automatic stay to the extent  
necessary to permit the parties to perform under the terms  
of the agreement and to permit Empire to draw on the reserve  
account maintained at BNY to the extent of funds available  
thereunder to cover the debtor’s obligations under the  
Trust/Escrow Agreement.  


DLS CAPITAL:  Bond Pricing for week of October 20
-------------------------------------------------

Indicated prices are as follows:

Alliance Entertainment 11 1/4 '05  13 - 17 (f)
Amer Telecasting 0/14.5 '04   39 - 40
Bradlees 11 '02  7 - 9(f)
Brunos 10 1/2 '05 52-53                                            
Cityscape 12 3/4 '04 70-72                                        
Dictaphone 11 3/4 '05 88 - 90
Flagstar 11 1/4 '04  44 1/2 - 45 1/2 (f)
Grand Union 12 '04  44 1/2 - 46
Harrah's Jazz 14 1/4 '01  28 - 30(f)
Hechinger 6.95 '03  75 - 77
Hills Department Stores 12 1/2 '03   78 - 80
Home Holdings 8 5/8 '03  35 - 38(f)
Levitz 9 5/8 '03  31 - 33(f)
Liggett 11 1/2 '99   58 - 61
Marvel 0 '98   9 1/2 - 11
MobileMedia 9 3/8 '07  20 - 23(f)
Mosler 11 '03 68-73                                                     
Musicland 9 '03 90 - 92                                                   
Payless Cashways  9 1/8 '03 18 - 19 (f)
Penn Traffic 9 5/8 '05 64 - 65
Stratosphere 14 1/4 '02 65 - 69 (f)
Trump Castle 11 3/4 '03 95 - 96
Trump Atlantic 11 1/4 '06   99 - 100
Wickes 11 5/8 '03    93 1/2 - 94 1/2

It's been a busy week, particularly to the downside in some  
credits. Mosler bonds moved down over 10 points with week  
cash flow numbers; Cityscape bonds moved lower to 70-ish on  
earnings uncertainty, and Speedy Muffler fell 10
points again this week.  Moving higher were both Trump  
issues on good third quarter numbers.  Big move in Liggett  
this week.

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A listing of meetings, conferences and seminars appears   
every Tuesday.  
  
Bond pricing, appearing each Friday, is supplied by DLS   
Capital Partners, Dallas, Texas.  
  
  
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