SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  SCHEDULE 13D
                    Under the Securities Exchange Act of 1934

INFORMATION  TO BE INCLUDED IN  STATEMENTS  FILED  PURSUANT TO RULE 13d-1(a) AND
AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)

                               (Amendment No. 2)*

Avatex Corporation
(Name of Issuer)

$5.00 Cumulative Convertible Preferred Stock
(Title of Class of Securities)

05349F204
(CUSIP Number)

Martin D. Sklar, Esq., Kleinberg, Kaplan, Wolff & Cohen, P.C., 551 Fifth Avenue,
New York,  New York 10176 Tel:  (212)  986-6000
(Name,  Address  and  Telephone Numberof Person Authorized to Receive Notices
 and Communications)

June 18, 1999
(Date of Event which Requires Filing of this Statement)

If the filing person has previously  filed a statement on Schedule 13G to report
the  acquisition  which is the subject of this  Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[ ].

Note:  Schedules  filed in paper format shall include a signed original and five
copies of the  schedule,  including  all  exhibits.  See Rule 13d-7(b) for other
parties to whom copies are to be sent.

*The  remainder of this cover page shall be filled out for a reporting  person's
initial filing on this form with respect to the subject class of securities, and
for  any  subsequent   amendment   containing   information  which  would  alter
disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the  Securities  Exchange  Act of
1934 ("Act") or otherwise  subject to the liabilities of that section of the Act
but  shall be  subject  to all other  provisions  of the Act  (however,  see the
Notes).

                       (Continued on the following pages)

                                  (Page 1 of 5)





                                  SCHEDULE 13D

Page 5 of 5

1.       NAME OF REPORTING PERSONS
         I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
                  Elliott Associates, L.P., a Delaware Limited Partnership

2.       CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
         (a)[x]
         (b)[ ]

3.       SEC USE ONLY

4.       SOURCE OF FUNDS*
                  00

5.   CHECK BOX IF DISCLOSURE OF LEGAL  PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
     2(d) or 2(e) [ ]

6.       CITIZENSHIP OR PLACE OF ORGANIZATION
                  Delaware

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH

7.       SOLE VOTING POWER
                  111,637

8        SHARED VOTING POWER
                  0

9.       SOLE DISPOSITIVE POWER
                  111,637

10.      SHARED DISPOSITIVE POWER
                  0

11.      AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
                  111,637

12.      CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
         EXCLUDES CERTAIN SHARES*   [ ]

13.      PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
                  17.11%

14.      TYPE OF REPORTING PERSON*
                  PN

                      *SEE INSTRUCTIONS BEFORE FILLING OUT!





         This  statement is filed  pursuant to Rule 13d-2(a) with respect to the
shares of $5.00 Cumulative  Convertible Preferred Stock (the "$5.00 First Series
Preferred Stock") of Avatex Corporation (the "Issuer") beneficially owned by the
Reporting Person specified herein as of June 28, 1999 and amends and supplements
the Schedule 13D dated as of April 23, 1998 filed by the  Reporting  Person,  as
amended (the "Schedule 13D").  Except as set forth herein,  the Schedule 13D, as
previously amended, is unmodified.

ITEM 4.  PURPOSE OF TRANSACTION

         Elliott  acquired  the $5.00  Cumulative  Convertible  Preferred  Stock
beneficially  owned by it in the  ordinary  course of its trade or  business  of
purchasing, selling, trading and investing in securities.

         As previously  disclosed in the Schedule 13D, on April 23, 1998 Elliott
brought an action in the Delaware Court of Chancery  against the Issuer,  Xetava
Corporation,  and each member of the  Issuer's  Board of Directors to enjoin the
Issuer's merger with Xetava (Elliott  Associates,  L.P. v. Avatex Corporation et
al., CA 16336) (the "Action"). On June 18, 1999 Elliott and the Issuer agreed to
settle the Action and entered into a Stipulation  of  Settlement.  In connection
with such settlement, Elliott, along with its affiliates Westgate International,
L.P. ("Westgate") and Martley  International,  Inc. ("Martley"),  entered into a
Stockholders'  Agreement  with the Issuer  wherein they agreed to the following,
subject  to  the   occurrence   of  the  proposed   merger  and  various   other
contingencies:

         1. To vote their shares of $5.00 Cumulative Convertible Preferred Stock
and $4.20 Cumulative  Exchangeable  Preferred  Stock,  Series A ("$4.20 Series A
Preferred Stock") in favor of the proposed merger between the Issuer and Xetava,
and granted the Issuer their proxies to effect same;

         2. To waive their  appraisal  rights in  connection  with such proposed
merger;

         3. To exchange  their  shares of the Issuer's  preferred  stock for the
"alternate consideration", as follows:

                  (a) Each share of Elliott's $5.00 First Series Preferred Stock
will be exchanged for (i) $3.7408 in cash, (ii) $8.34 principal  amount of 6.75%
notes  to  be  issued  by  Avatex  Funding,  Inc.  ("Avatex  Funding"),   a  new
wholly-owned subsidiary of the Issuer, (iii) warrants to purchase 0.67456 shares
of the common stock of the post-merger  entity,  and (iv) a deferred  contingent
cash right to receive (x) 16% of an amount equal to 20% of any net recovery that
the Issuer may  receive in  certain  litigation  brought by it against  McKesson
Corporation and a number of large  pharmaceutical  manufacturers  (the "McKesson
Litigation"),  divided by (y) the number of  outstanding  shares of $5.00  First
Series Preferred Stock; and

                  (b) Each share of the Elliott's and Westgate's  $4.20 Series A
Preferred Stock will be exchanged for (i) $2.9705 in cash, (ii) $6.623 principal
amount of 6.75% notes to be issued by Avatex  Funding,  (3) warrants to purchase
0.53567  shares  of the  common  stock  of the  post-merger  entity,  and (iv) a
deferred  contingent  cash right to receive (x) 84% of an amount equal to 20% of
any net recovery that the Issuer may receive in the McKesson Litigation, divided
by (y) the number of outstanding shares of $4.20 Series A Preferred Stock.

         4. For a period of ten years,  not to  acquire  any  additional  equity
securities  of the Issuer or seek to  influence  or control  the  management  or
policies of the Issuer; and

         5. To release the Issuer and its directors  from  liability for matters
in connection with the Issuer's proposed merger with Xetava.

         The Issuer will pay  $150,000  to Elliott  and  $150,000 to Westgate in
consideration for their execution of the Stockholders' Agreement.

         Furthermore,  Elliott  and  Westgate  entered  into  a  Stock  Purchase
Agreement with Phar-Mor,  Inc.  ("Phar-Mor")  on June 18, 1999 whereby  Phar-Mor
will  purchase all of Elliott's  and  Westgate's  shares of the Issuer's  common
stock  now  held  for a  purchase  price  of $2.00  per  share,  to be  effected
simultaneously  with the closing of the  Issuer's  proposed  merger with Xetava.
Elliott and Westgate have each granted  Phar-Mor a proxy to vote their shares of
the Issuer's common stock, but Phar-Mor is contractually  bound to vote in favor
of the revised Xetava merger proposal.

         Subject to the court's approval of the above-referenced  Stipulation of
Settlement, Elliott will dismiss the Action against the Issuer, and Dan Gropper,
Ralph  DellaCamera,  Vincent  Intrieri and Brian  Miller,  the  designees of the
preferred  stockholders  on the  Issuer's  Board of  Directors,  will  resign as
directors of the Issuer.

         Except as set forth  herein,  Elliott has any plans or proposals  which
relate to or would result in any of the actions set forth in  subparagraphs  (a)
through (j) of Item 4.


                                    SIGNATURE

         After  reasonable  inquiry and to the best of its knowledge and belief,
the  undersigned  certifies that the  information set forth in this statement is
true, complete and correct.

Dated:
June 28, 1999              ELLIOTT ASSOCIATES, L.P.


                             By: /s/ Paul E. Singer
                                            Paul E. Singer
                                            General Partner