Filed pursuant to Rules 424(b)(3)
and 424(c) of Regulation C
PROSPECTUS SUPPLEMENT DATED JANUARY 21, 1997
TO PROSPECTUS DATED AUGUST 7, 1996
CAFETERIA OPERATORS, L.P.
12% Senior Secured Notes due December 31, 2001
__________________________________
PLAN OF DISTRIBUTION
On January 21, 1997, SC Fundamental Value Fund, L.P. and
SC Fundamental Value BVI Ltd. together sold an aggregate principal
amount of $4,229,438.92 of the Notes pursuant to this Prospectus,
to Greenwich High Yield, L.L.C. for a negotiated price. Such sale
includes all Notes being offered by SC Fundamental Value Fund, L.P.
and SC Fundamental Value BVI Ltd. pursuant to this Prospectus.
Greenwich High Yield, L.L.C. may offer or reoffer any or all of
such principal amount it purchased.
RECENT DEVELOPMENTS
Change in Accountants
On the recommendation of the Company's Audit Committee,
Deloitte & Touche LLP ("Deloitte & Touche") was dismissed by the
Board of Directors of the Parent effective September 17, 1996.
There have been no disagreements with Deloitte & Touche on any
matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, during the Parent's two
most recent fiscal years or any subsequent interim period which, if
not resolved to the satisfaction of Deloitte & Touche, would have
caused it to make a reference to the subject matter of the
disagreement(s) in connection with any report issued by Deloitte &
Touche. The Deloitte & Touche report on the financial statements
of the Parent and the Company for the fiscal year ended January 3,
1995, dated March 2, 1995, included an explanatory paragraph which
identified factors which raised substantial doubt about the ability
of the Parent and the Company to continue as going concerns. As a
result of the Restructuring during the first quarter of 1996, and
the significant reduction in the Company's debt burden and
resulting interest expense, the March 28, 1996 reports of Deloitte
& Touche, covering the fiscal year ended January 2, 1996 did not
contain any form of qualification or uncertainty regarding the
financial status of the Parent or the Company.
Effective September 17, 1996, the Board of Directors, on
the recommendation of the Parent's Audit Committee, appointed KPMG
Peat Marwick LLP as the independent public accountants of the
Company and the Parent for the fiscal year ending December 31,
1996.
Directors and Executive Officers
At the 1996 Annual Meeting of Stockholders of the Parent,
held on November 21, 1996 (the "1996 Annual Meeting"), the
stockholders of the Parent elected Suzanne Hopgood, Kevin E. Lewis,
Gilbert C. Osnos, Kenneth F. Reimer, Sanjay Varma and E.W.
Williams, Jr. for one-year terms as directors of the Parent, to
hold office until the 1997 Annual Meeting of Stockholders.
Biographies of each of these directors are set forth in the
Prospectus under "MANAGEMENT -- Directors and Executive Officers."
Mr. Russell A. Belinsky, a director since January 1996, chose not
to stand for reelection.
At the request of the Board of Directors of the Parent,
Kevin E. Lewis continued as President and Chief Executive Officer
of the Parent past the September 30, 1996 date previously
established for his resignation from these positions. On December
24, 1996, Mr. Lewis tendered his resignation from these positions,
effective December 31, 1996. On December 24, 1996, Mr. Lewis
agreed with the Board of Directors of the Parent to remain as
Chairman of the Board into 1997. Mr. Kenneth F. Reimer, a director
of the Parent, was elected interim President and Chief Executive
Officer of the Parent, effective January 1, 1997. Mr. Reimer's
service in these positions may be terminated at any time by either
Mr. Reimer or by the Board of Directors. The biography of Mr.
Reimer is set forth in the Prospectus under "MANAGEMENT --
Directors and Executive Officers."
Third Quarter Operating Results
<TABLE>
<CAPTION>
FINANCIAL DATA (UNAUDITED)
(Amounts in thousands)
Thirteen Thirteen Thirty-Nine Thirty-Nine
Weeks Weeks Weeks Weeks
Ended Ended Ended Ended
October 1, October 3, October 1, October 3,
1996 1995 1996 1995
</CAPTION>
<S> <C> <C> <C> <C>
Sales $ 50,002 $ 53,944 $ 149,497 $ 160,914
Operating Income 2,223 184 7,839 1,427
Interest Expense 59 6,723 182 19,500
Net Income (Loss) $ 2,164 $ (6,539) $ 7,657 $ (18,073)
</TABLE>
