8-K

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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549



                                    FORM 8-K

                                 CURRENT REPORT
      Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


Date of Report (Date of earliest event reported)      November 19, 1997

                             PAYLESS CASHWAYS, INC.
             (Exact name of registrant as specified in its charter)

             Iowa                        1-8210                   42-0945849 
(State or other jurisdiction     (Commission File Number)        (IRS Employer
     of incorporation)                                       Identification No.)

       Two Pershing Square, 2300 Main Street,
       P.O. Box 419466, Kansas City, Missouri                 64141-0466
      (Address of principal executive offices)                (Zip Code)

Registrant's telephone number, including area code:      (816) 234-6000

                                       N/A
         (Former name or former address, if changed since last report.)


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ITEM 3:  Bankruptcy or Receivership.

         The United States Bankruptcy court for the Western District of Missouri
(the "Court") confirmed the Payless Cashways, Inc. (the "Company") First Amended
Plan of Reorganization, as modified on October 9, 1997 (the "Plan"), on November
19, 1997. The effective date of the Plan is expected to be on or around December
2, 1997. The following  summary of the Plan omits certain  information set forth
in the  Plan.  Any  statements  contained  herein  concerning  the  Plan are not
necessarily complete, and in each such instance reference is made to the Plan, a
copy of which is  incorporated  herein by reference to the  Company's  Quarterly
Report on Form 10-Q for the quarter ended August 30, 1997.  Each such  statement
is qualified in its entirety by such reference.

         At the current time there are 39,964,041 shares of Company stock issued
and  outstanding.  Upon  implementation  of the Plan,  the  Company  will  issue
20,000,000  shares of newly  reorganized  Payless  common stock (the "New Common
Stock").  The Plan generally  provides for the  following:  (I) The secured bank
group (the "Existing Lenders") under the existing credit agreement (the "Amended
Credit  Agreement")  will  receive  (a)  payment of accrued  interest,  fees and
expenses,  (b) Net Cash  Proceeds  (as  defined  in the  Plan)  from the sale of
certain  collateral  securing the Amended Credit Agreement and the collection of
certain  promissory notes pledged to the Existing  Lenders,  (c) their allocable
portion  of $278.1  million of new term  notes  (the "New Term  Notes")  under a
secured term loan  facility to take effect upon  emergence  from Chapter 11 (the
"Term  Facility")  and (d) an  estimated  10,730,671  shares of New Common Stock
(equivalent  to  approximately  53.7% of the  shares  of the  newly  reorganized
Company  expected  to  be  outstanding  upon  emergence  from  Chapter  11  (the
"Effective  Date")),  of which 460,000 shares will be distributed to the lenders
providing a revolving  credit  facility to supply working  capital  financing to
take  effect  upon   emergence   from  Chapter  11  (the  "Exit   Facility")  in
consideration  for their  commitment to provide the Exit Facility.  The New Term
Notes will be subject to a scheduled  amortization of an aggregate of $3 million
per year and shall be prepaid in the amount of any  dispositions or realizations
on certain  collateral.  In addition,  the Term Facility will be prepaid from an
annual  cash flow  sweep of 65% of  excess  cash  flow (as  defined  in the Term
Facility).  The New Term Notes will also contain  covenants and other provisions
consistent with the Exit Facility.  (II) The holders of notes under the existing
loan facility with the Prudential  Insurance Company of America (the "Prudential
Loan Facility") will receive new notes (the "New Notes")  pursuant to a new loan
facility in the amount of the existing  notes plus accrued  interest.  These New
Notes will bear  interest at a rate of LIBOR plus 4.0% per annum,  mature  seven
years from the Effective  Date,  will amortize at a rate of $4 million per year,
subject to adjustment  for asset sales  proceeds  applied as a credit toward the
scheduled amortization,  and will be secured by the same collateral that secures
the existing Prudential Loan Facility.  (Subsequent to July 21, 1997, Prudential
sold its  interest  in these  notes to UBS  Mortgage  Finance,  Inc.)  (III) The
Company will enter into a loan agreement with the financial  institutions  which
were party to a synthetic lease  facility,  providing for payment by the Company
of $16 million,  at an interest  rate of LIBOR plus 3.5%,  with a maturity of 54
months, with principal  installments  aggregating $1 million the first year, and
thereafter quarterly installments of approximately $1 million secured by a first
mortgage on the three remaining  synthetic  lease store sites. In addition,  the
loan agreement contains various financial  incentives for prepayment of the loan
prior  to  matutiy.  The  balance  of  these  financial   institutions'  claims,
approximately $15.4 million,  will be treated as a general unsecured claim. (IV)
Unsecured  claims  against  the  Company  of  vendors  and  suppliers  for goods
delivered and services rendered prior to the Petition Date, claims in respect of
the Senior  Subordinated  Notes,  contingent  unliquidated claims and claims for
damage arising from the rejection by the Company  pursuant to Section 365 of the
Bankruptcy  Code of executory  contracts  and  unexpired  leases  (collectively,
"General  Unsecured  Claims")  will  receive  their pro rata share of  8,269,329
shares or  approximately  41.3% of the shares of the newly  reorganized  Company
expected  to be  outstanding.  (V) Holders of issued and  outstanding  shares of
existing  preferred stock will receive their pro rata share of 600,000 shares of
New Common Stock (3% of the shares of the newly

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reorganized  Company  expected to be  outstanding).  (VI)  Holders of issued and
outstanding shares of existing common stock will receive their pro rata share of
400,000  shares of New Common  Stock (2% of the shares of the newly  reorganized
Company expected to be outstanding).  In addition, any stock options relating to
existing  preferred  stock and common  stock will be canceled  on the  Effective
Date.

         Fractional  shares of New Common  Stock will not be issued to creditors
or  shareholders  in connection  with the Plan. In addition,  no distribution of
less than  $5.00 will be made for  fractional  share  interests.  As a result of
these  provisions,  equity  security  holders  holding  less than 100  shares of
existing  common stock will receive no  distribution of New Common Stock and may
not receive any cash under the Plan.

         For financial  information  regarding the assets and liabilities of the
Company  refer to the  Company's  Quarterly  Report on Form 10-Q for the quarter
ended August 30, 1997. The Company's most recent Monthly Operating Report, filed
with the Court on  November  17,  1997,  reflects  that the total  assets of the
Company were $1,243,804 and total  liabilities were $1,046,595 as of November 1,
1997, before the application of "fresh start" reporting.  "Statement of Position
90-7" of the American Institute of Certified Public  Accountants  adopted by the
Company  provides that the emergence from the Chapter 11 proceeding  will result
in the creation of a new reporting  entity without any  accumulated  deficit and
with the Company's assets and liabilities  restated to their fair values,  under
so-called "fresh start"  reporting.  The impact of fresh start reporting will be
dependent  on the terms of the Plan and the fair values of assets and  remaining
liabilities  at such time.  The  Company  believes  that the  present  aggregate
carrying  value of goodwill and land,  buildings and  equipment  exceed the fair
value of such assets and, as a result, write-downs in the carrying value of such
assets will likely be required as a part of fresh start reporting,  although the
amounts of such write-downs are not presently determinable.


ITEM 7:  Financial Statements and Exhibits

         (a)      Financial Statements of Business acquired.

                  Not applicable.

         (b)      Pro Forma Financial Information.

                  Not applicable.

         (c)      Exhibits.

                   2.1     First Amended Plan of Reorganization,  as modified on
                           October 9, 1997 (incorporated  herein by reference to
                           Exhibit 2.1 filed as part of the Company's  Quarterly
                           Report on Form 10-Q for the quarter  ended August 30,
                           1997).

                  99.1     Press Release dated November 19, 1997.





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         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                    PAYLESS CASHWAYS, INC.


Dated:  November 26, 1997      By:  /s/ Stephen A. Lightstone
                                  ----------------------------------------------
                                    Stephen A. Lightstone, Senior Vice President
                                    Finance and Chief Financial Officer
                                    (Principal Financial Officer and Principal
                                    Accounting Officer)

EX-99

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Case Name:  In re Payless Cashways, Inc.
Case No.:  97-50543
                                                         
                                   
Contact:       Ann Julsen/Anita-Marie Hill - Sitrick And Company
               310/788-2850 or 816/234-6183


              Court Confirms Payless Cashways' Reorganization Plan;
               Company to Emerge from Chapter 11 December 3, 1997

                  Kansas  City,  Mo. -- November  19, 1997 -- Payless  Cashways,
Inc.  (OTC  Bulletin  Board:  PYLSQ),  the nation's  fifth  largest  retailer of
building materials and home improvement products,  announced today that the U.S.
Bankruptcy  Court  for the  Western  District  of  Missouri  has  confirmed  the
Company's  First Amended Plan of  Reorganization.  The Court's  confirmation  of
Payless  Cashways'  Plan  clears  the  way for the  Company's  emergence  from a
voluntary Chapter 11 proceeding on December 3, 1997.
         Confirmation  of the Plan came at the conclusion of a hearing to assure
that all  reorganization  requirements  had been met under the Bankruptcy  Code,
which included  acceptance by the requisite majority of creditor and shareholder
classes.
         Payless also announced a new nine-member Board of Directors, which will
assume  responsibilities  December 3rd after the  reorganized  Payless  Cashways
emerges from Chapter 11. The new directors include:
o Peter G. Danis - Interim Chairman of Payless Cashways, Inc. and
        President/Chief Executive Officer of Boise Cascade Office Products Corp.
o David M. Chamberlain - Chairman of Genesco, Inc.
o H. D. (Harry) Cleberg - President/Chief Executive Officer of Farmland 
         Industries, Inc.
o David G. Gundling - President/Chief Executive Officer of Hagemeyer Foods  
         N.A., Inc.
o Max D. Hopper - Principal of Max D. Hopper Associates, Inc.
o Donald E. Roller- Former President/Chief Executive Officer of U.S. Gypsum
         Company
o David Stanley - Chief Executive Officer of Payless Cashways, Inc.
o Susan M. Stanton - President/Chief Operating Officer of Payless Cashways, Inc.
o Peter M. Wood - Former Managing Director of J.P. Morgan & Company, Inc.

         Under the terms of the plan,  holders of secured  bank claims under the
Company's  pre-petition  credit  facilities,  estimated at $419.4  million,  are
expected to receive  approximately  $43 million in cash,  $278.1  million of new
term  notes,  and 10.7  million  shares of new common  stock in the  reorganized
Payless Cashways.

                                  -- more --


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         Holders of general,  allowed unsecured  claims,  including trade claims
and Senior Subordinated Notes,  estimated to total approximately $311.6 million,
will receive approximately 8.3 million shares of common stock in the reorganized
Company.
         The Plan also calls for current common  stockholders to receive 400,000
shares of new common stock  -approximately one share of new Payless common stock
for each 100 shares of existing common stock. The new stock is expected to trade
on the NASDAQ National Market under the symbol "PCSH" beginning December 3rd. It
is anticipated that the initial,  partial  distribution of new common stock will
commence in December 1997, to holders of allowed claims and interests, including
trade creditors, bondholders, and shareholders.
         "Since  filing  Chapter 11 just four months ago,  Payless  Cashways has
successfully  restructured  the  Company's  financial  position,  resulting in a
stronger,  leaner  Company  emerging  with a balance  sheet  that  supports  our
business, and a business that supports our balance sheet," Mr. Stanley said. "As
of the  effective  date of the Plan,  total  liabilities  are reduced  from $1.1
billion to approximately  $597 million;  balance sheet debt is reduced from $689
million  to  approximately  $426  million.  Under the Plan,  interest  costs are
reduced from more than $60 million in 1996 to a projected $29 million by 2002."
         As part of the  restructuring,  the Company  closed 29  underperforming
stores and reduced its  workforce  by 1,900 --  reducing  operating  expenses by
approximately $80.3 million annually.  Previously  implemented corporate expense
reductions will reduce operating costs by $7 million annually.
         "Going forward with less debt and more financial  flexibility,  the new
Payless  Cashways  will invest in the  renovation  and upgrading of its consumer
stores in order to  provide  a broader  range of  product  choices  and a better
shopping  experience,"  Mr.  Stanley  said.  "At the same  time,  our  dedicated
national  sales force is  concentrating  on providing  high levels of service to
large-volume  professionals  Company-wide  and in Contractor  Supply  centers in
select markets."
         "Looking ahead to the year 2000 and beyond, our industry will have more
participants   than  just  two  warehouse  competitors.    Nearly  one   million
professional and do-it-yourself

                                -- more --

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customers  shop our 164  stores in 20 states  weekly.  In our  niche,  targeting
professionals and DIYers who prefer a non-warehouse  store format, we believe we
can and will be among the best building materials retailers," he said.
         Mr. Stanley emphasized that "the reorganization could not have occurred
without  the  hard  work  and  dedication  of every  Payless  Cashways  employee
nationwide.  Our employees,  on whom tremendous demands have been placed to make
the  new,  reorganized  Payless  Cashways  a  reality,  are owed a  sincere  and
heartfelt  thanks for a job well  done.  Our  suppliers  have also stood with us
through this extremely difficult time, and for their loyalty, we are grateful."
         The Company filed its Chapter 11 petition and Plan of Reorganization in
the U.S. Bankruptcy Court for the Western District of Missouri in Kansas City on
July 21, 1997.
         Payless  Cashways,  Inc. is a full-line  building  materials  specialty
retailer  concentrating on remodelers,  residential and commercial  contractors,
property management and industrial firms, and do-it-yourselfers. At November 19,
1997, the Company operates 164 building materials stores in 20 states located in
the  Midwestern,  Southwestern,  Pacific Coast,  and Rocky Mountain  areas.  The
stores operate under the names of Payless Cashways, Furrow, Lumberjack,  Hugh M.
Woods, Knox Lumber,  and Contractor  Supply.  Payless Cashways currently employs
approximately   12,500  people  in  its  stores,   headquarters   offices,   and
distribution centers.
         This  paragraph  is  included  in this  release to comply with the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. There
are certain important factors that could cause results to differ materially from
those anticipated by the  forward-looking  statements made above.  Investors are
cautioned  that all  forward-looking  statements  involve risk and  uncertainty.
Among the factors that could cause different  results are: consumer spending and
debt levels,  interest  rates,  housing  activity,  lumber prices,  product mix,
growth of certain market segments,  competitor  activities,  an excess of retail
space  devoted  to the sale of  building  materials,  success  of the  Company's
strategy,  the adequacy of and compliance with financing,  stability of customer
demand and supplier  support,  and timely emergence from Chapter 11.  Additional
information concerning these and other factors is contained in the Company's SEC
filings, copies of which are available from the Company without charge or on the
Company's web site, payless.cashways.com.

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