---

T R O U B L E D   C O M P A N Y   R E P O R T E R
      
     Thursday, January 29, 1998, Vol. 2, No. 20                      
                    
                     Headlines

AUTOLEND GROUP: Filed Disclosure Statement & Plan
CLOTHESTIME INC.: Emerges from Bankruptcy
COLOR TILE: Committee Taps Special Counsel on Contingency
CONSOLIDATED STAINLESS: Time to Assume or Reject Leases
ERNST HOME CENTER: Hearing on Extension to Choose Leases

FIRST MERCHANTS: Order Establishes Equity Procedures
FRETTER: Objection to Committee's Prosecution of Claims
GUY F. ATKINSON: Court Approves Sale Procedures
HAYES CORP.: Announces Work Force Cuts
KIDDIE ACADEMY: String of Franchises Defaulted on Loans

MANHATTAN BAGEL: Hearing on Sale of Company Owned Stores
MARVEL ENTERTAINMENT: Reaches Settlement with Bondholders
MIDCOM: Hearing Set for Sale
MINISCRIBE CORP.: Bondholder Objects to Attorney Fees
MOBILEMEDIA CORP.: Announces Reorganization Plan

MOBILEMEDIA CORP.: Wins Approval for Interexchange Carrier
NOBODY BEATS THE WIZ: Assets Acquired by Cablevision
NYTEST ENVIRONMENTAL: Seeks Dismissal of Bankruptcy
THE WOODLANDS: Bank May Be Willing to Provide Millions
WESTERN PACIFIC: Seeks to Reject Employment Agreements
WESTERN PACIFIC: Taps Arthur Andersen as Accountants

                 *******

AUTOLEND GROUP: Filed Disclosure Statement & Plan
-------------------------------------------------
AutoLend Group, Inc. announced that it has filed a
proposed Disclosure Statement & Reorganization Plan which
includes proposed treatment of the Company's Warrants,
which, under their terms and as previously extended, are
set to expire on January 31, 1998.  Since the Company's
filing for reorganization under Chapter 11 of the U.S.
Bankruptcy Code on September 22, 1997, the Company has not
had the authority to unilaterally make a further
extension of the expiration date, or any other significant
changes.

The ultimate outcome of the Warrants will be decided during
the course of the approval, and possible modification, of
the Plan which has just been proposed.  The Company's
management believes that this process will take several
months.  At present, the Company's proposed Plan provides
for the terms of the Class A and Class B Warrants to be
modified, which modifications would include a "strike
price" of $4.00 per share under both the Class A and Class
B Warrants, and the elimination of the creation of any new
Class B Warrants upon the future exercise of any Class A
Warrants.  

The proposed Plan would allow one year for Warrant holders
to exercise their modified rights.  The proposed Plan
includes other substantial changes to the Company and to
the Company's underlying equity securities; such changes
may also affect the nature of the Warrants.  The Company
cannot predict with any certainty whether its proposed
treatment of the Warrants will prevail.  The terms of the
final approved Plan will contain the comprehensive and
controlling treatment of the rights under the Warrants.  


CLOTHESTIME INC.: Emerges from Bankruptcy
-----------------------------------------
The Orange County Register reported on January 1, 1998,
that Clothestime Inc. is remaking its image through store
remodelings and a renewed focus on fashion.

Under the company's four-year reorganization, approved by a
bankruptcy judge in September, creditors owed about $50
million were paid $3.5 million up front, or 7 cents on the
dollar.

The agreement also calls for creditors to receive fixed
annual payments totaling $5 million over the next four
years, as well as variable annual payments based on company
performance.

If Clothestime makes good on all the payments, chairman and
CEO David Sejpal and three other partners will assume 100
percent ownership of the company. If not, creditors will
get a stake in the chain. "We are solidly back in the
black," Sejpal said. "We have cash in the bank and, other
than payments we are required to make to creditors, our
company is debt-free."

Clothestime emerged from Chapter 11 bankruptcy as a private
company. Annual revenue is approaching $200 million and is
projected to grow about 15 percent this year, Sejpal said.
Plans call for opening 10 to 15 stores by January 1999.


COLOR TILE: Committee Taps Special Counsel on Contingency
---------------------------------------------------------
The Official Committee of Unsecured Creditors of Color Tile
Inc., et al applied to retain Winstead Sechrest & Minick PC
as special counsel to the Committee on a contingency basis
to prosecute eight adversary proceedings against numerous
recipients of preferential transfers in the amount of
$1,000 to $5,000.

The law firm is willing to pursue these suits on a
contingency basis of 33 1/3 percent of the recoveries plus
its expenses.


CONSOLIDATED STAINLESS: Time to Assume or Reject Leases
-------------------------------------------------------
Consolidated Stainless, Inc. is seeking an extension of
time to and including June 13, 1998 to assume or reject
unexpired leases of nonresidential real property.

The debtor states that cause exists for the extension due
to the complexity of the case and the debtor's efforts in
formulating a plan.  Until a plan is developed, the debtor
cannot determine whether it is economically prudent to
assume certain leases and risk incurring administrative
liabilities.


ERNST HOME CENTER: Hearing on Extension to Choose Leases
--------------------------------------------------------
On February 13, 1998 the court will hear the extension
motion of the debtors, Ernst Home Center, Inc. and EDC,
Inc.

The debtors are seeking an extension of time within which
to assume or reject AOS Agreement Leases.  In September of
1996 Ernst sold to AOS Investments, LLC many of its rights
to benefit from the "bonus value" in 24 retail store
leases.  In exchange Ernst received at least $2.5 million
and the right to share in future revenues generated by the
leases.  

Ernst requests that the court extend Ernst's deadline to
assume or reject the leases through and including March 27,
1998.  The debtor asserts that these leases are among the
primary assets of the estate, and that the complexity of
the case and the large number of leases involved justifies
the extension.


FIRST MERCHANTS: Order Establishes Equity Procedures
----------------------------------------------------
On January 21, the U.S. Bankruptcy Court of Delaware
entered an Interim Order in the case of First Merchants
Acceptance Corporation establishing Notification and
Approval Procedures for the Sale or Other Transfer of
Certain General Unsecured Claims and Equity Interests.

The Court also set a hearing date to approve the Interim
Order on a final basis for February 3, 1998 at 12 p.m.


FRETTER: Objection to Committee's Prosecution of Claims
-------------------------------------------------------
Oliver L. Fretter, Oliver L. Fretter Revocable Trust,
Howard O. Fretter, John B. Hurley, Julian L. Potts Ernest
L. Grove, mark T. Malta, Peter A. Dow, Bruce D. Birgbauer,
Dale R. Campbell and Paul R. Mattei (Movants) object tot he
motion of the official Committee of Unsecured Creditors for
an order granting the Committee standing to prosecute
claims on behalf of the Fretter estate and authorizing the
Committee to interven in the Silo Adversary proceeding.

The Movants claim that the Committee has previously alleged
causes of action based on state fraudulent conveyance law
and breach of fiduciary duty law in the bankruptcy court in
the District of Delaware, identical to this complaint filed
in the bankruptcy court in the northern district of Ohio.

The adversary proceeding involves Dixons US Holdings, and
eight affiliated companies and the Official Committee of
Unsecured Creditors of Dixons US Holdings Inc. In the
adversary proceeding in Delaware the plaintiffs contend
that the $43.6 million dividend distribution to Fretter's
shareholders constituted a fraudulent conveyance of the
debtor's assets, and is a voidable fraudulent transfer.  
The Committee and Dixons also allege breach of fiduciary
duties and waste of corporate assets.


GUY F. ATKINSON: Court Approves Sale Procedures
-----------------------------------------------
In the case of Guy F. Atkinson Company of California, Guy
F. Atkinson Company and Guy F. Atkinson Holdings, Ltd. the
court approved the sale procedures for the bid on certain
Atkinson assets proposed by The Clark Construction Group,
Inc.

The purchase price is $1 million and a mutually agreed yet
undetermined amount of cash for the Equipment and the
assumed agreements.  A hearing approving the sale to Clark
will take place on February 5, 1988.


HAYES CORP: Announces Work Force Cuts
--------------------------------------
The Atlanta Journal/Constitution reported on January 27,
1988, that on January 26 Hayes Corp. announced a slash in
company costs that included cutting 15 percent of its work
force.

The troubled Norcross modem maker, which merged a month ago
with Maryland-based Access Beyond, has cut 100 of the 700
work force positions in its first several weeks as a
publicly traded company. The moves will pare more than $4
million per fiscal quarter in costs, said Ron Howard,
former head of Access Beyond, who became Hayes' chief
executive officer.

"We are not doing this just to diminish the losses," he
said. "We are approximately a $225 million company and
there's no real reasons why we are not profitable."

To pay for the merger and restructuring, Hayes will take a
"significant" charge in its fourth fiscal quarter. Also
Monday, the company announced a new credit arrangement with
NationsCredit, shifting from a $35 million to a $50 million
line of credit at a lower interest rate. The new deal lets
the company borrow money more cheaply.


KIDDIE ACADEMY: String of Franchises Defaulted on Loans
-------------------------------------------------------
The Denver Business Journal reported on 01/23/98 that
Kiddie Academy International Inc., a Bel Air, Md.-based
franchiser of child-care centers nationwide, was forced to
seek Chapter 11 bankruptcy protection when a string of
franchises defaulted on loans, according to company
officials.

The company filed for reorganization protection in U.S.
Bankruptcy Court in Baltimore earlier this month. The
company and three subsidiaries reported combined assets of
about $2.1 million and liabilities of more than $4 million
in its court filings.

"Basically, it is to get out of lease obligations," said
company President Michael J. Miller. Miller said that
within an 18-month period, 13 new franchisees defaulted on
lease loans guaranteed by Kiddie Academy. The parent
company had to step in and run all 13 centers, including
centers in Colorado.

"It was just too many centers coming back to us too fast,"
said Miller.  Miller said company officials realized during
the summer that they would need to do something to
"mitigate damages" after they were forced to close
centers in Colorado, Ohio and the Midwest. When the centers
had started showing signs of trouble, the parent company
stepped in.

But the attempt to rejuvenate those now-defunct centers
proved to be too large a financial strain, Miller said. The
parent company was forced to pay back rent and buy new
equipment for the centers. Miller also sent district
managers to each location to supervise branch managers.


MANHATTAN BAGEL: Hearing on Sale of Company Owned Stores
--------------------------------------------------------
The court in the case of Manhattan Bagel Company, Inc. and
I&J Bagel, Inc., has set a hearing date of February 6, 1998
for the debtor's motion for an order approving the sale of
35 company owned stores and assumption and assignment of
certain leases, or in the alternative, their rejection.

The debtor states that several parties have demonstrated
interest in the purchase of the stores, and if they can not
be sold, the debtor will close the stores and seek
authority for their rejection.  No specific names of
interested parties or purchase price bids are mentioned.

The debtor is submitting a form of Franchise Agreement to
be approved by the court to be entered into with a
prospective purchaser.


MARVEL ENTERTAINMENT: Reaches Settlement with Bondholders
---------------------------------------------------------
Federal Filings reports on January 27, 1998, that Marvel
Entertainment Group Inc.'s holding companies and the
indenture trustee for their bondholders have reached a
settlement that calls for distribution to the bondholders
of the Marvel common stock pledged to secure the bonds in
lieu of foreclosure.  In exchange, trustee LaSalle National
Bank's claims against the holding companies would be
reduced to reflect the agreed on value of the Marvel stock
distributed.


MIDCOM: Hearing Set for Sale
----------------------------
In the case of Midcom Communications Inc., et al., February
3, 1998 has been set as the date of the sale hearing on the
motion of Ad Val, Inc., debtor authorizing the sale of
substantially all of the assets between the debtor as
seller and DICOMM Ventures, Include.

Pursuant to the purchase agreement, the debtor wills ell
substantially all of the assets used in the business.  The
purchaser will pay to the debtor a purchase price of $6.6
million less $650,000 which shall be retained in escrow as
security for certain indemnification provisions in the
Purchase Agreement.

The court will entertain overbids of not less than $232,000
in excess of the purchase price plus an expense
reimbursement up to $150,000.


MINISCRIBE: Bondholder Objects to Attorney Fees
-----------------------------------------------------                 
As reported in the January 23, 1998, issue of the Denver
Business Journal, a federal judge has been asked to decide
if lawyers who helped resolve a bankruptcy case involving
MiniScribe Corporation deserve a $500,000 bonus while an
unsecured bondholder remains more than $90 million in the
hole.

The U.S. Trustee's Office and the Harris Trust Co. filed
separate objections to the rare application by the trustee
for Mini-Scribe Corp., attorney Tom Connolly, to give the
Denver law firm of Dufford & Brown the bonus.

California-based Harris Trust, however, objected to the 20
percent bonus on the grounds that Harris Trust lost nearly
all of its $97.8 million in convertible subordinated
debentures that it held in MiniScribe when the company
failed.

The Dufford & Brown attorneys helped resolve a lawsuit
against accounting firm Coopers & Lybrand that brought $84
million to the strapped MiniScribe estate. Harris Trust
recovered $6.5 million from the bankruptcy proceedings,
while the rest of the unsecured creditors were paid in
full.

Investigators caught MiniScribe, a maker of disk drives,
shipping boxes of bricks disguised as computer parts to
inflate sales and doctoring its books to deceive investors.

U.S. Bankruptcy Court Judge Charles Matheson held a
scheduling conference Jan. 22, but a decision was not
expected.


MOBILEMEDIA: Announces Reorganization Plan
------------------------------------------
MobileMedia Corporation announced on January 27, 1998, that
it has filed a plan of reorganization with the U.S.
Bankruptcy Court for the District of Delaware.  MobileMedia
said that its Plan has the support of the Steering
Committee of its secured lenders.  The members of the
Steering Committee hold approximately 45% of the total debt
of the secured lender group, MobileMedia's largest creditor
group.  

MobileMedia said that the Unsecured Creditors Committee,
which represents the holders of the Company's subordinated
debt, has advised the Company that it opposes the Plan.  
MobileMedia said that it anticipates confirmation of its
Plan by the bankruptcy court despite possible continued
opposition by the Unsecured Creditors Committee and that it
expects to emerge from Chapter 11 in mid-1998.

Mr. Joseph A. Bondi, Chairman, Restructuring, of
MobileMedia and a Managing Director of the New York based
turnaround firm, Alvarez & Marsal, Inc., stated, "In 1997,
the Company was able to fund all post-petition interest and
capital expenditure from internally generated funds, and
substantially exceeded its forecasted financial results.  
This Plan will enable MobileMedia to emerge from Chapter 11
with an extremely strong balance sheet, with strong
prospects for growth."  

Under the terms of the Plan:

    *Holders of the Company's $649 million of pre-petition
     secured debt would receive $150 million of ten-year
     senior notes and 97% of the Company's common stock.  

    *Holders of the Company's pre-petition unsecured debt
     would receive a combination of 3% of the Company's
     common stock, warrants and other consideration if they
     accept the Plan.  

    *The current equity in the Company would be
     extinguished.  

MobileMedia said the implementation of the Plan will reduce
the Company's existing debt by approximately 80%.  

Once MobileMedia's Disclosure Statement and Plan are
approved by the court, the Plan will be submitted for a
vote by the Company's creditors.  


MOBILEMEDIA: Wins Approval for Interexchange Carrier
----------------------------------------------------
According to MobileMedia Bankruptcy News of January 28,
1998 (Issue 17), MobileMedia Corporation seeks court
approval to consolidate and rationalize their voice
telecommunication systems from 18 long distance carriers to
a single interexchange carrier. They propose MCI as the
interexchange carrier offering the best deal following an
extensive solicitation of competitive proposals from five
carriers. The Debtors project that the new agreement with MCI
will yield $6,000,000 in annual savings.  

By this Motion, the Debtors have sought and obtained the
Court's authority to enter into the new Interexchange Carrier
Agreement with MCI and to post a $2,100,000 security deposit
to secure the Debtors' future performance under the
Agreement. The Debtors commit to purchase $1,000,000 of
service monthly from MCI for the next 21 months.


NOBODY BEATS THE WIZ: Assets Acquired by Cablevision
----------------------------------------------------
Cablevision Systems Corporation (ASE: CVC) today announced
that it has reached an agreement in principle to acquire
assets of Nobody Beats The Wiz, Inc., owner of the New York
area's largest consumer electronics retail chain Nobody
Beats the Wiz.  Nobody Beats the Wiz is currently in
voluntary bankruptcy proceedings.  

The acquisition provides Cablevision with retail
outlets in the New York area, creating a showplace where
Cablevision can market its family of brands and offer its
telecommunications services side-by-side with electronics
equipment consumers use to access those services.  

Following the acquisition Cablevision intends to keep open
36 of the existing retail locations; 17 will be closed and
are not covered by the acquisition.  

Nobody Beats the Wiz will get access to increased attention
from Cablevision's strong New York metropolitan area
customer base, while maintaining the Wiz's widely
recognized retail presence in a very competitive
marketplace.

As the sixth largest operator of cable television systems,
Cablevision's cable division serves households primarily in
the New York, Boston and Cleveland metropolitan areas.


NYTEST ENVIRONMENTAL INC.: Seeks Dismissal of Bankruptcy
--------------------------------------------------------
Nytest Environmental Inc. (OTC-Bulletin Board: NYTS),
currently under the protection of Chapter XI of the
U.S. Bankruptcy Court, announced January 27, 1998, that,
subject to the Court's approval, it intends to seek
dismissal of its current bankruptcy case on or about
February 12, 1998, and subsequently give Peaceful
Possession of its facility to its lender, The CIT
Group/Credit Finance.


THE WOODLANDS: Bank May Be Willing to Provide Millions
------------------------------------------------------
It was reported in the KansasCityStar on 01/28/98
that the owners of The Woodlands told a federal bankruptcy
judge Tuesday that they were firmly committed to financing
the track's reorganization, and a bank said it would
provide millions of dollars to carry it out.

G. Michael Finnigan, chief financial officer for Hollywood
Park Inc., which owns The Woodlands, said Hollywood Park
would provide a $28.6 million letter of credit if a
bankruptcy court judge approved the company's plan to bring
The Woodlands out of bankruptcy in partnership with an
American Indian-operated casino.

The money would be used to protect the track's secured
creditors in the event the U.S. Department of the Interior
took the property into trust for the Wyandotte Tribe of
Oklahoma. John Varnell, a Bank of America officer,
testified that Hollywood Park, of Inglewood, Calif., is an
old and valued customer with a $100 million line of
credit. Hollywood Park is using only $3.7 million of that
line, Varnell said.

In answer to a question by Judge John T. Flannagan, Varnell
said Hollywood Park could get the letter of credit
immediately at the same interest rate it would pay for any
other money from its line of credit.   The Woodlands'
creditors strongly oppose the debtor's reorganization plan.
They have painted it as a scheme through which the track
owners want to take virtually a free ride on the creditors'
money for almost two years while trying to get the
necessary state and federal approvals for casino gambling.

William Grace, a St. Joseph casino operator, bought 85
percent of The Woodlands' $29.7 mortgage debt at deep
discounts. He opposes The Woodlands' plan and has demanded
that the track be sold at auction. If that happens, Grace
could bid in the amount of his debt holding to gain control
of the track.

Grace, whose companies are involved in the management of
gambling and gambling related business around the country,
has the contract to build and manage a casino for the Iowa
Tribe of Kansas near St. Cloud. His companies also
operate an Indian-owned hotel and casino near Prescott,
Ariz.

The bankruptcy hearing began last week in U.S. District
Court in Kansas City, Kan. The hearing is expected to last
at least through the end of this week.


WESTERN PACIFIC: Seeks to Reject Employment Agreements
------------------------------------------------------
Western Pacific Airlines, Inc., debtor seeks to reject the
employment agreements of Catherine Nagle and Edward R.
Beauvais.  Western Pacific states that the benefits that it
receives under these contracts are exceeded by their costs
and that in its business judgment, the company determined
that the rejection of the contract is in the best interests
of the estate.


WESTERN PACIFIC: Taps Arthur Andersen as Accountants
----------------------------------------------------
Western Pacific Airlines is seeking a nunc pro tunc order
approving the employment of Arthur Andersen LLP as
accounting and financial advisors to the debtor as of
October 15, 1997.  Arthur Andersen has unpaid service fees
of approximately $225,000 as a pre-petition claim which the
firm is willing to forego.

Arthur Andersen has been performing work since the outset
of the case.  The firm has not requested a retainer and the
firm will charge its current hourly rates ranging from $425
per hour for a Senior Partner to $100 per hour for a staff
consultant.

                    ---------

A listing of meetings, conferences and seminars appears   
every Tuesday.
  
Bond pricing, appearing each Friday, is supplied 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 and Lexy Mueller, Editors.   
  
Copyright 1998.  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  * * *