SECURITIES AND EXCHANGE COMMISSION
                       Washington, D.C. 20549

                          ---------------         
                             FORM 10-Q

   / X /     QUARTERLY REPORT PURSUANT TO SECTION 13 OR
             15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 

             For the quarterly period ended  September 25, 1997   
                                            -------------------

                                OR

   /   /     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
             OF THE SECURITIES EXCHANGE ACT OF 1934 

             For the transition period from          to          
                                           ----------  -----------

                   Commission file number   0-5485  
                                          ----------
            
                         ENVIRODYNE INDUSTRIES, INC.            
           -----------------------------------------------------
           (Exact name of registrant as specified in its charter)


           Delaware                                95-2677354  
-------------------------------                ----------------
(State or other jurisdiction of                (I.R.S. Employer
incorporation or organization)                 Identification No.)

701 Harger Road, Suite 190, Oak Brook, Illinois           60523  
------------------------------------------------       ----------
  (Address of principal executive offices)             (Zip Code)

Registrant's telephone number, including area code:  (630) 571-8800


     Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.  Yes   X       No        
                           ------       -------

     APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:  Indicate by check
mark whether the registrant has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court.  Yes   X       No        
                                        ------       ------

     As of November 7, 1997, there were 14,693,143 shares
outstanding of the registrant's Common Stock, $.01 par value.

                          Page 1 of 29 Pages
<PAGE>

                     INDEX TO FINANCIAL STATEMENTS


             ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES

          UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Consolidated balance sheets at September 25, 1997 (unaudited)
    and December 26, 1996                                       4

Unaudited consolidated statements of operations for the
     three months ended September 25, 1997 and
     September 26, 1996 and for the nine months ended
     September 25, 1997 and September 26, 1996                  5

Unaudited consolidated statements of cash flows
     for the nine months ended September 25, 1997
     and September 26, 1996                                     6

Notes to consolidated financial statements                      7


           VISKASE HOLDING CORPORATION AND SUBSIDIARIES

        UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Consolidated balance sheets at September 25, 1997 (unaudited)
     and December 26, 1996                                     19

Unaudited consolidated statements of operations
     for the three months ended September 25, 1997
     and September 26, 1996 and for the nine months
     ended September 25, 1997 and September 26, 1996           20

Unaudited consolidated statements of cash flows
     for the nine months ended September 25, 1997
     and September 26, 1996                                    21

Notes to consolidated financial statements                     22



<PAGE>




                   PART I.  FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS
        --------------------

The financial information included in this quarterly report
has been prepared in conformity with the accounting principles
and practices reflected in the financial statements included
in the annual report on Form 10-K filed with the Securities
and Exchange Commission for the year ended December 26, 1996
(1996 Form 10-K). These quarterly financial statements should
be read in conjunction with the financial statements and the
notes thereto included in the 1996 Form 10-K. The accompanying
financial information, which is unaudited, reflects all
adjustments which are, in the opinion of management, necessary
for a fair statement of the results for the interim periods
presented.

The condensed consolidated balance sheet as of December 26,
1996 was derived from the audited consolidated financial
statements in the Company's annual report on Form 10-K.

Reported interim results of operations are based in part on
estimates which may be subject to year-end adjustments. In
addition, these quarterly results of operations are not
necessarily indicative of those expected for the year.

<PAGE>
<PAGE>
           ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
                   CONSOLIDATED BALANCE SHEETS


                              September 25,   December 26,
                                  1997           1996      
                              --------------  ------------
                                         (in thousands) 

ASSETS
  Current assets:
    Cash and equivalents            $ 16,772      $ 41,794
    Receivables, net                  77,351        79,174
    Inventories                       99,005        95,012
    Other current assets              27,285        22,141
                                    --------      --------
       Total current assets          220,413       238,121

  Property, plant and equipment,
    including those under
    capital leases                   585,877       578,704
    Less accumulated depreciation
      and amortization               138,896       116,896
                                    --------      --------
    Property, plant 
      and equipment, net             446,981       461,808
 
  Deferred financing costs             5,045         5,902
  Other assets                        39,465        42,809
  Excess reorganization value        117,499       125,107
                                    --------      --------
                                    $829,403      $873,747
                                    ========      ========

LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities:
    Short-term debt including
      current portion of
      ong-term debt and
      obligations
      under capital leases          $ 13,688    $   11,291
    Accounts payable                  36,466        37,015
    Accrued liabilities               83,724        82,109
                                    --------      --------
        Total current liabilities    133,878       130,415

  Long-term debt including
    obligations
    under capital leases             509,579       521,179

  Accrued employee benefits           52,813        53,697
  Deferred and noncurrent
    income taxes                      44,493        64,811
  Commitments and contingencies

  Stockholders' equity:
    Preferred stock, $.01 par value;
      none outstanding
    Common stock, $.01 par value;
      14,693,143 shares issued
      and outstanding at
      September 25, 1997 and
      14,545,107 shares at
      December 26, 1996                  147           145
    Paid in capital                  135,880       135,100
    Accumulated (deficit)            (49,624)      (38,813)
    Cumulative foreign currency
      translation adjustments          2,298         7,305
    Unearned restricted stock 
      issued for future service          (61)          (92)
                                    --------      --------
        Total stockholders' equity    88,640       103,645
                                    --------      --------
                                    $829,403      $873,747
                                    ========      ========

The accompanying notes are an integral part of the
consolidated financial statements.

<PAGE>
<PAGE>
      ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
         CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                       Three Months      Three Months    Nine  Months       Nine   Months
                                                      Ended September  Ended September  Ended September    Ended September
                                                          25, 1997        26, 1996          25, 1997           26, 1996    
                                                      ---------------   --------------   --------------    ----------------
                                                    (in thousands, except for number of shares and per share amounts)
<S>                                                   <C>               <C>               <C>                <C>
NET SALES                                                $155,004          $163,825          $466,072           $489,308

COSTS AND EXPENSES
  Cost of sales                                           116,334           122,763           350,061            366,525
  Selling, general
    and administrative                                     28,534            28,134            82,734             83,080
  Amortization of intangibles
    and excess reorganization value                         3,966             4,220            12,064             12,426
  Restructuring charges                                     3,500                               3,500                   
                                                         --------          --------          --------           --------
OPERATING INCOME                                            2,670             8,708            17,713             27,277


  Interest income                                              97               414               855              1,186
  Interest expense                                         13,927            14,582            42,335             43,954
  Other (income) expense, net                                 363             1,064             1,814              4,325
                                                         --------          --------          --------           --------
(LOSS) BEFORE INCOME TAXES                                (11,523)           (6,524)          (25,581)           (19,816)

  Income tax (benefit)                                     (7,770)           (2,600)          (14,770)            (5,800)
                                                         --------          --------          --------           --------

NET (LOSS)                                               $ (3,753)         $ (3,924)         $(10,811)          $(14,016)
                                                         ========          ========          ========           ========

WEIGHTED AVERAGE
  COMMON SHARES                                        14,645,809        14,514,721        14,587,810         14,255,987


PER SHARE AMOUNTS:

NET (LOSS)                                                  $(.26)            $(.27)            $(.74)             $(.98)
                                                            =====             =====             =====              =====

<FN>
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>

<PAGE>
<PAGE>
               ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                               Nine  Months Ended        
                                                                       ---------------------------------
                                                                       September 25,      September 26,
                                                                            1997               1996     
                                                                       -------------      -------------
                                                                                 (in thousands)
<S>                                                                    <C>                <C>
Cash flows from operating activities:
  Net (loss)                                                              $(10,811)          $(14,016)
  Adjustments to reconcile net (loss)
    to net cash provided by operating activities:
      Depreciation and amortization under capital lease                     32,024             32,329
      Amortization of intangibles and excess
        reorganization value                                                12,064             12,426
      Amortization of deferred financing fees and discount                   1,298              1,742
      (Decrease) in deferred and noncurrent income taxes                   (17,392)           (10,157)
      Foreign currency transaction loss (gain)                               1,231               (111)
      Net (gain) on disposition of assets                                     (928)              (200)

      Changes in operating assets and liabilities:
        Accounts receivable                                                 (1,614)             7,440
        Inventories                                                         (9,171)            (1,839)
        Other current assets                                                (5,833)            (5,509)
        Accounts payable and accrued liabilities                             6,116             16,704
        Other                                                                  601              1,054
                                                                           -------           --------
      Total adjustments                                                     18,396             53,879
                                                                           -------           --------
        Net cash provided by operating activities                            7,585             39,863

Cash flows from investing activities:
  Capital expenditures                                                     (36,036)           (22,832)
  Proceeds from disposition of assets                                       11,873              2,129
                                                                          --------           --------
        Net cash (used in) investing activities                            (24,163)           (20,703)

Cash flows from financing activities:
  Issuance of common stock                                                     813                 20
  Proceeds from revolving loan and long-term borrowings                        314              1,130
  Deferred financing costs                                                    (522)               (91)
  Repayment of revolving loan, long-term borrowings
    and capital lease obligation                                            (8,043)           (10,909)
                                                                           -------            -------
        Net cash (used in) financing activities                             (7,438)            (9,850)

Effect of currency exchange rate changes on cash                            (1,006)              (440)
                                                                           -------            -------
Net increase (decrease) in cash and equivalents                            (25,022)             8,870
Cash and equivalents at beginning of period                                 41,794             30,325
                                                                           -------            -------
Cash and equivalents at end of period                                      $16,772            $39,195
                                                                                                                     
---------------------------------------------------------------------------------------------------------------

Supplemental cash flow information:
  Interest paid                                                             $33,706           $34,639
  Income taxes paid                                                         $ 3,908          $  1,090

<FN>
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>

<PAGE>
<PAGE>
                  ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1. INVENTORIES (dollars in thousands)

Inventories consisted of:

                                      September         December
                                      25, 1997          26, 1996 
                                      ---------         --------
Raw materials                          $ 17,543         $ 14,960
Work in process                          30,525           29,057
Finished products                        50,937           50,995
                                       --------         --------
                                       $ 99,005         $ 95,012
                                       ========         ========

Approximately 62% of the inventories at September 25, 1997 were valued
at Last-In, First-Out (LIFO). These LIFO values exceeded current
manufacturing cost by approximately $6 million at September 25, 1997.


2. DEBT OBLIGATIONS (dollars in thousands)

Outstanding short-term and long-term debt consisted of:

                                      September         December
                                      25, 1997          26, 1996 
                                      ---------         --------
Short-term debt, current maturity
  of long-term
  debt, and capital lease obligation:

  Current maturity of Viskase Capital
    Lease Obligation                   $ 9,675           $ 6,633
  Current maturity of Viskase
    Limited Term Loan (3.9%)             1,648             1,876
  Other                                  2,365             2,782
                                       -------           -------
         Total short-term debt         $13,688           $11,291
                                       =======           =======
Long-term debt:

  12% Senior Secured Notes due 2000   $160,000          $160,000
  10.25% Senior Notes due 2001         219,262           219,262
  Viskase Capital Lease Obligation     124,873           134,549
  Viskase Limited Term Loan (3.9%)       3,296             4,690
  Other                                  2,148             2,678
                                      --------          --------
          Total long-term debt        $509,579          $521,179
                                      ========          ========



3.  CONTINGENCIES

In late 1993, Viskase commenced a legal action against American
National Can Company (ANC) in Federal District Court for the Northern
District of Illinois, Eastern Division, 93C7651. Viskase claimed that
ANC's use of two different very low density polyethylene plastic
resins in the manufacture of ANC's multi-layer barrier shrink film
products was infringing various Viskase patents relating to multi-
layer barrier plastic films used for fresh red meat, processed meat
and poultry product applications. In November 1996, after a three-week
trial, a jury found that ANC had willfully infringed Viskase's patents
and awarded Viskase $102.4 million in compensatory damages. The Court
also entered an order permanently enjoining ANC from making or selling
infringing products after December 23, 1996.

On September 29, 1997, the Court set aside the jury verdict in part
and ordered a retrial on certain issues. The Court upheld the jury
finding on the validity of all of Viskase's patents and the jury
finding that ANC had wilfully infringed Viskase's patents by ANC's use
of Dow Chemical Company's "Attane" brand polyethylene plastic resin
in ANC's products. However, the Court ordered a new trial on the issue
of whether ANC's use of Dow Chemical Company's "Affinity" brand
polyethylene plastic resin infringed Viskase's patents and whether
such conduct was wilful. Because the jury rendered one general damage
verdict, the Court ordered a retrial of all damage issues. By
operation of the Court's order, the injunction in respect of ANC's
future use of the "Affinity" brand resin was removed. No new trial
date has been set. The Company expects ANC to vigorously contest this
matter and to appeal any final judgment. No part of the pending claims
have been recorded in the Company's financial statements.

Litigation is pending with respect to events arising out of the
Envirodyne bankruptcy case and the 1989 acquisition of Envirodyne by
Emerald Acquisition Corporation (Emerald) with respect to which,
although Envirodyne is not presently a party to such litigation,
certain defendants have asserted indemnity rights against Envirodyne.

In ARTRA Group Incorporated v. Salomon Brothers Holding Company Inc,
   -----------------------------------------------------------------
Salomon Brothers Inc, D.P. Kelly & Associates, L.P., Donald P. Kelly, 
--------------------------------------------------------------------
Charles K. Bobrinskoy, James L. Massey, William Rifkin and Michael 
------------------------------------------------------------------
Zimmerman, Case No. 93 A 1616, United States Bankruptcy Court for the 
---------
Northern District of Illinois, Eastern Division, ARTRA Group
Incorporated (ARTRA) alleges breach of fiduciary duty and tortious
inference in connection with the negotiation and consummation of the
Plan of Reorganization. The plaintiff seeks damages in the total
amount of $136.2 million plus interest and punitive damages of $408.6
million. D.P. Kelly & Associates, L.P. and Messrs. Kelly, Bobrinskoy,
Massey, Rifkin and Zimmerman have asserted common law and contractual
rights of indemnity against Envirodyne for attorneys' fees, costs and
any ultimate liability relating to the claims set forth in the
complaints. Upon a motion of the defendants, the Bankruptcy Court
dismissed ARTRA's claims. ARTRA appealed to the U.S. District Court
and on October 31, 1996, the U.S. District Court affirmed the
Bankruptcy Court's decision. ARTRA has appealed to the U.S. Court of
Appeals for the Seventh Circuit. The appeal has been fully briefed and
oral arguments heard in May 1997. The parties are awaiting the U.S.
Court of Appeals decision.

Envirodyne is continuing its evaluation of the merits of the
indemnification claims against Envirodyne and the underlying claims
in the litigation. Upon the undertaking of D.P. Kelly & Associates,
L.P. to repay such funds in the event it is ultimately determined that
there is no right to indemnity, Envirodyne is advancing funds to D.P.
Kelly & Associates, L.P. and Mr. Kelly for the payment of legal fees.
Although the Company is not a party to the case, the Company believes
that the plaintiff's claims raise similar factual issues to those
raised in the Envirodyne bankruptcy case which, if adjudicated in a
manner similar to that in the Envirodyne bankruptcy case, would render
it difficult for the plaintiff to establish liability or prove damages.
Accordingly, the Company believes that the indemnification claims will
not have a material adverse effect upon the business or financial
position of the Company, even if the claimants were successful in
establishing their right to indemnification.

In 1993, the Antitrust Division of the United States Department of
Justice began an investigation of the disposable plastic cutlery
industry. This investigation has resulted in the indictment, trial and
conviction of certain companies and individuals in the industry, but
did not include Clear Shield National or any of its present or former
employees. In February 1996 Clear Shield National and three other
plastic cutlery manufacturers were named as defendants in the
following three civil complaints: Eisenberg Brothers, Inc., on behalf 
                                  -----------------------------------
of itself and all others similarly situated, v. Amcel Corp., Clear 
------------------------------------------------------------------
Shield National, Inc., Dispoz-O Plastics Corp. and Benchmark Holdings,
---------------------------------------------------------------------
Inc. t/a Winkler Products, Civil Action No. 96-728, United States 
-------------------------
District Court for the Eastern District of Pennsylvania; St. Cloud 
                                                         ---------
Restaurant Supply Company v. Amcel Corp., Clear Shield National, Inc.,
---------------------------------------------------------------------
Dispoz-O Plastics Corp. and Benchmark Holdings, Inc. t/a Winkler 
----------------------------------------------------------------
Products, Case No. 96C 0777, United States District Court for the 
--------
Northern District of Illinois, Eastern Division; and Servall Products, 
                                                     ----------------
Inc., on behalf of itself and all others similarly situated, v. Amcel 
---------------------------------------------------------------------
Corporation, Clear Shield National, Inc., Dispoz-O Plastics 
-----------------------------------------------------------
Corporation and Benchmark Holdings, Inc. t/a Winkler Products, Civil 
-------------------------------------------------------------
Action No. 96-1116, United States District Court for the Eastern
District of Pennsylvania. Each of the complaints alleges, among other
things, that from October 1990 through April 1992 the defendants
unlawfully conspired to fix the prices at which plastic cutlery would
be sold. The Company informed the plaintiffs that such claims as they
relate to Clear Shield were discharged by the order of the Bankruptcy
Court and Plan of Reorganization and that the plaintiffs are
permanently enjoined from pursuing legal action to collect discharged
claims.

On February 27, 1996, the plaintiff in the St. Cloud case voluntarily 
                                           ---------
dismissed the action without prejudice and refiled its action in the
United States District Court for the Eastern District of Pennsylvania
but did not name Clear Shield National as a defendant. On March 14,
1996, Eisenberg Brothers Inc., St. Cloud and Servall filed a motion
in Clear Shield National's bankruptcy proceeding in the United States
Bankruptcy Court for the Northern District of Illinois, Eastern
Division, contending that the Bankruptcy Court's order did not
discharge the plaintiffs' claims. On March 19, 1997, the Bankruptcy
Court denied their motion and granted the Company's cross motion for
summary judgement. Eisenberg Brothers, Inc. has appealed the
Bankruptcy Court's decision to the U.S. District Court. On October 24,
1997, the District Court upheld the Bankruptcy Court's decision. The
plaintiff's period for appeal is running.

In March 1997 Viskase Corporation received a subpoena from the
Antitrust Division of the United States Department of Justice relating
to a grand jury investigation of the sausage casings industry. Viskase
Corporation is cooperating fully with the investigation.

The Company and its subsidiaries are involved in various legal
proceedings arising out of their business and other environmental
matters, none of which is expected to have a material adverse effect
upon results of operations, cash flows or financial position.


4.  ACCOUNTING STANDARDS

The Company will implement the provisions of Statement of Financial
Accounting Standards No. 128, "Earnings Per Share" (SFAS No. 128),
which will be effective for interim and annual financial statements
issued for periods ending after December 15, 1997. SFAS No. 128
simplifies the previous standards for computing earnings per share,
replacing the presentation of primary earnings per share with a
presentation of basic earnings per share. It also requires dual
presentation of basic and diluted earnings per share on the face of
the income statement for all entities with complex capital structures,
which applies to the Company. Management believes that adoption of
SFAS No. 128 will not have a material effect on the Company's earnings
per share amounts.

The Company will implement the provisions of Statement of Financial
Accounting Standards No. 129, "Disclosure of Information About Capital
Structure" (SFAS No. 129), which will be effective for interim and
annual financial statements issued for periods ending after December
15, 1997. SFAS No. 129 requires that companies include additional
detail in disclosures about capital structure related to rights and
privileges associated with outstanding security issues. Management
believes that adoption of SFAS No. 129 will not have a material effect
on the Company.

The Company will implement the provisions of Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" (SFAS
No. 130), which will be effective for interim and annual financial
statements issued for periods ending after December 15, 1997. SFAS No.
130 establishes standards for reporting and display of comprehensive
income and its components in a full set of general purpose financial
statements. Management believes that adoption of SFAS No. 130 will not
have a material effect on the Company.

The Company will implement the provisions of Statement of Financial
Accounting Standards No. 131, "Disclosures about Segments of an
Enterprise and Related Information" (SFAS No. 131), which will be
effective for interim and annual financial statements issued for
periods ending after December 15, 1997. SFAS No. 131 specifies revised
guidelines for determining an entity's operating segments and the type
and level of financial information to be disclosed. Management
believes that adoption of SFAS No. 131 will not have a material effect
on the Company.


5.  RESTRUCTURING CHARGES (dollars in thousands)

During the third quarter, the Company's Viskase subsidiary committed
to a plan of restructuring whereby it will adjust its operations from
a segregated regional focus to a more congruent global focus. These
actions are directly related to lowering Viskase's fixed costs.
Restructuring actions identified resulted in charges to continuing
operations of $3.5 million before tax and included costs associated
with voluntary and involuntary severance expense and the consolidation
of a finishing plant. In the third quarter, $.7 million was charged
against the reserve.


6.  SUBSIDIARY GUARANTORS

Envirodyne's payment obligations under the Senior Secured Notes are
fully and unconditionally guaranteed on a joint and several basis
(collectively, Subsidiary Guarantees) by Viskase Corporation, Viskase
Holding Corporation, Viskase Sales Corporation, Clear Shield National,
Inc., Sandusky Plastics, Inc. and Sandusky Plastics of Delaware, Inc.,
each a direct or indirect wholly owned subsidiary of Envirodyne and
each a "Guarantor." These subsidiaries represent substantially all of
the operations of Envirodyne conducted in the United States. The
remaining subsidiaries of Envirodyne generally are foreign
subsidiaries or otherwise relate to foreign operations.

The obligations of each Guarantor under its Subsidiary Guarantee are
the senior obligation of such Guarantor, and are collateralized,
subject to certain permitted liens, by substantially all of the
domestic assets of the Guarantor and, in the case of Viskase Holding
Corporation, by a pledge of 65% of the capital stock of Viskase S.A.
The Subsidiary Guarantees and security are shared with the lenders
under the Revolving Credit Agreement on a pari passu basis and are
subject to the priority interest of the holders of obligations under
the Letter of Credit Facility, each pursuant to an intercreditor
agreement.

The following consolidating condensed financial data illustrate the
composition of the combined Guarantors. No single Guarantor has any
significant legal restrictions on the ability of investors or
creditors to obtain access to its assets in the event of default on
the Subsidiary Guarantee other than its subordination to senior
indebtedness described above. Separate financial statements of the
Guarantors are not presented because management has determined that
these would not be material to investors. Based on the book value and
the market value of the pledged securities of Viskase Corporation,
Viskase Sales Corporation, Clear Shield National, Inc., Sandusky
Plastics, Inc. and Sandusky Plastics of Delaware, Inc., these
Subsidiary Guarantors do not constitute a substantial portion of the
collateral and, therefore, the separate financial statements of these
subsidiaries have not been provided. Separate unaudited interim
financial statements of Viskase Holding Corporation are being filed
within this quarterly report.

Investments in subsidiaries are accounted for by the parent and
Subsidiary Guarantors on the equity method for purposes of the
supplemental consolidating presentation. Earnings of subsidiaries are
therefore reflected in the parent's and Subsidiary Guarantors'
investment accounts and earnings. The principal elimination entries
eliminate investments in subsidiaries and intercompany balances and
transactions.

<PAGE>
<PAGE>
         ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
                 CONSOLIDATING BALANCE SHEETS
                      SEPTEMBER 25, 1997

<TABLE>
<CAPTION>
                                                                Guarantor       Nonguarantor                     Consolidated
                                                    Parent     Subsidiaries     Subsidiaries    Eliminations (1)     Total    
                                                  --------     ------------     ------------    ------------     -------------
                                                                                (in thousands)
<S>                                             <C>            <C>              <C>             <C>              <C>
ASSETS
  Current assets:
    Cash and equivalents                          $  9,711      $   (1,335)       $ 8,396                           $ 16,772
    Receivables and advances, net                   79,584          53,194         49,041         $ (104,468)         77,351
    Inventories                                                     67,188         33,119             (1,302)         99,005
    Other current assets                               925          16,042         10,318                             27,285
                                                  --------        --------       --------          ---------        --------
      Total current assets                          90,220         135,089        100,874           (105,770)        220,413

Property, plant and equipment including
  those under capital lease                            144         446,518        139,215                            585,877
  Less accumulated depreciation
    and amortization                                   115         111,134         27,647                            138,896
                                                  --------        --------       --------          ---------        --------
Property, plant and equipment, net                      29         335,384        111,568                            446,981

Deferred financing costs                             4,519                            526                              5,045
Other assets                                                        37,603          1,862                             39,465
Investment in subsidiaries                          50,534         120,570                          (171,104)
Excess reorganization value                                         82,587         34,912                            117,499
                                                  --------        --------       --------          ---------        --------
                                                  $145,302        $711,233       $249,742          $(276,874)       $829,403
                                                  ========        ========       ========          =========        ========
LIABILITIES & STOCKHOLDERS' EQUITY
  Current liabilities:
    Short-term debt including current 
      portion of long-term debt and 
      obligation under capital lease                              $ 10,227       $  3,461                          $  13,688
    Accounts payable and advances                  $    35         107,064         33,835          $(104,468)         36,466
    Accrued liabilities                             16,113          44,081         23,530                             83,724
                                                  --------        --------       --------          ---------        --------
      Total current liabilities                     16,148         161,372         60,826           (104,468)        133,878

Long-term debt including obligation
  under capital lease                              379,262         126,970          3,347                            509,579

Accrued employee benefits                                           48,666          4,147                             52,813
Deferred and noncurrent income taxes                27,653          (5,077)        21,917                             44,493
Intercompany loans                                (366,401)        340,022         26,379

Commitments and contingencies

Stockholders' equity:
  Preferred stock, $.01 par value;
    none outstanding
  Common stock, $.01 par value;
    14,693,143 shares issued and
    outstanding                                        147               3         32,738            (32,741)            147
  Paid in capital                                  135,880          87,899         87,871           (175,770)        135,880
  Accumulated earnings (deficit)                   (49,624)        (50,860)        10,279             40,581         (49,624)
  Cumulative foreign currency
    translation adjustments                          2,298           2,238          2,238             (4,476)          2,298
  Unearned restricted stock issued
    for future services                                (61)                                                              (61)
                                                  --------        --------       --------          ---------        --------
    Total stockholders' equity                      88,640          39,280        133,126           (172,406)         88,640
                                                  --------        --------       --------          ---------        --------
                                                  $145,302        $711,233       $249,742          $(276,874)       $829,403
                                                  ========        ========       ========          =========        ========
<FN>
(1)  Elimination of intercompany receivables, payables and investment accounts.
</TABLE>

<PAGE>
<PAGE>
                ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
                        CONSOLIDATING BALANCE SHEETS
                              DECEMBER 26, 1996

<TABLE>
<CAPTION>
                                                                Guarantor     Nonguarantor                     Consolidated
                                                   Parent     Subsidiaries    Subsidiaries    Eliminations (1)     Total    
                                                 --------     ------------   ------------    ------------     -------------
                                                                                (in thousands)
<S>                                             <C>            <C>              <C>             <C>              <C>
ASSETS
  Current assets:
    Cash and equivalents                          $ 25,785      $   (162)          $ 16,171                         $41,794
    Receivables and advances, net                   61,960        70,258             46,032       $ (99,076)         79,174
    Inventories                                                   59,730             36,509          (1,227)         95,012
    Other current assets                               187        11,730             10,224                          22,141
                                                  --------      --------           --------       ---------        --------
      Total current assets                          87,932       141,556            108,936        (100,303)        238,121

Property, plant and equipment including
  those under capital lease                            133       420,396            158,175                         578,704
  Less accumulated depreciation
    and amortization                                    95        86,715             30,086                         116,896
                                                  --------      --------           --------       ---------        --------
Property, plant and equipment, net                      38       333,681            128,089                         461,808

Deferred financing costs                             5,144                              758                           5,902
Other assets                                                      40,784              2,025                          42,809
Investment in subsidiaries                          64,433       123,236                           (187,669)
Excess reorganization value                                       87,702             37,405                         125,107
                                                  --------      --------           --------       ---------        --------
                                                  $157,547      $726,959           $277,213       $(287,972)       $873,747
                                                  ========      ========           ========       =========        ========
LIABILITIES & STOCKHOLDERS' EQUITY
  Current liabilities:
    Short-term debt including current 
      portion of long-term debt and 
      obligation under capital lease                            $  7,182             $4,109                       $  11,291
    Accounts payable and advances                   $   35        85,156             50,900       $ (99,076)         37,015
    Accrued liabilities                              6,197        44,235             31,677                          82,109
                                                  --------      --------           --------       ---------        --------
      Total current liabilities                      6,232       136,573             86,686         (99,076)        130,415

Long-term debt including obligation
  under capital lease                              379,262       137,063              4,854                         521,179

Accrued employee benefits                                         49,366              4,331                          53,697
Deferred and noncurrent income taxes                29,088        10,824             24,899                          64,811
Intercompany loans                                (360,680)      340,000             20,681              (1)

Commitments and contingencies

Stockholders' equity:
  Preferred stock, $.01 par value;
    none outstanding
  Common stock, $.01 par value;
    14,545,107 shares issued and
    outstanding                                        145             3             32,738         (32,741)            145
  Paid in capital                                  135,100        87,899             87,871        (175,770)        135,100
  Accumulated earnings (deficit)                   (38,813)      (42,050)             7,872          34,178         (38,813)
  Cumulative foreign currency
    translation adjustments                          7,305         7,281              7,281         (14,562)          7,305
  Unearned restricted stock issued
    for future services                                (92)                                                             (92)
                                                  --------      --------           --------       ---------        --------
    Total stockholders' equity                     103,645        53,133            135,762        (188,895)        103,645
                                                  --------      --------           --------       ---------        --------
                                                  $157,547      $726,959           $277,213       $(287,972)       $873,747
                                                  ========      ========           ========       =========        ========
<FN>
(1)  Elimination of intercompany receivables, payables and investment accounts.
</TABLE>

<PAGE>
<PAGE>
            
                ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
                  CONSOLIDATING STATEMENTS OF OPERATIONS
                 FOR NINE MONTHS ENDED SEPTEMBER 25, 1997

<TABLE>
<CAPTION>
                                                                Guarantor       Nonguarantor                     Consolidated
                                                    Parent     Subsidiaries     Subsidiaries    Eliminations         Total    
                                                  --------     ------------     ------------    ------------     -------------
                                                                                (in thousands)
<S>                                             <C>            <C>              <C>             <C>              <C>
NET SALES                                                        $312,332          $184,711       $(30,971)         $466,072

COSTS AND EXPENSES
  Cost of sales                                                   240,661           140,313        (30,913)          350,061
  Selling, general and administrative               $3,735         45,707            33,292                           82,734
  Amortization of intangibles and
    excess reorganization value                                     9,666             2,398                           12,064
  Restructuring charges                                             3,500                                              3,500
                                                  --------       --------          --------      ---------          --------

OPERATING INCOME (LOSS)                             (3,735)        12,798             8,708            (58)           17,713

  Interest income                                      584                              271                              855
  Interest expense                                  32,410          8,767             1,158                           42,335
  Intercompany interest expense (income)           (30,380)        28,135             2,245
  Management fees (income)                          (3,393)         2,615               778
  Other expense (income), net                        1,392            179               243                            1,814
  Equity loss (income) in subsidiary                 8,868         (2,407)                          (6,461)                
                                                  --------       --------          --------      ---------          --------
INCOME (LOSS) BEFORE INCOME TAXES                  (12,048)       (24,491)            4,555          6,403           (25,581)
  Income tax provision (benefit)                    (1,237)       (15,681)            2,148                          (14,770)
                                                  --------       --------          --------      ---------          --------
NET INCOME (LOSS)                                 $(10,811)       $(8,810)         $  2,407         $6,403          $(10,811)
                                                  ========        =======          ========      =========          ========
</TABLE>

                CONSOLIDATING STATEMENTS OF OPERATIONS
               FOR THREE MONTHS ENDED SEPTEMBER 25, 1997

<TABLE>
<CAPTION>
                                                                Guarantor       Nonguarantor                     Consolidated
                                                    Parent     Subsidiaries     Subsidiaries    Eliminations         Total    
                                                  --------     ------------     ------------    ------------     -------------
                                                                                (in thousands)
<S>                                             <C>            <C>              <C>             <C>              <C>
NET SALES                                                        $104,865           $59,905        $(9,766)         $155,004

COSTS AND EXPENSES
  Cost of sales                                                    81,004            45,164         (9,834)          116,334
  Selling, general and administrative               $1,320         16,258            10,956                           28,534
  Amortization of intangibles and
    excess reorganization value                                     3,133               833                            3,966
  Restructuring charges                                             3,500                                              3,500
                                                  --------       --------          --------      ---------          --------
OPERATING INCOME (LOSS)                             (1,320)           970             2,952             68             2,670

  Interest income                                       93                                4                               97
  Interest expense                                  10,697          2,878               352                           13,927
  Intercompany interest expense (income)           (10,145)         9,435               710
  Management fees (income)                          (1,050)           854               196
  Other expense (income), net                          529          1,098            (1,264)                             363
  Equity loss (income) in subsidiary                 2,983         (1,727)                          (1,256)                   
                                                  --------       --------          --------      ---------          --------

INCOME (LOSS) BEFORE INCOME TAXES                   (4,241)       (11,568)            2,962          1,324           (11,523)
  Income tax provision (benefit)                      (488)        (8,517)            1,235                           (7,770)
                                                  --------       --------          --------      ---------          --------
NET INCOME (LOSS)                                  $(3,753)       $(3,051)         $  1,727        $ 1,324          $ (3,753)
                                                   =======        =======          ========        =======          ========
</TABLE>

<PAGE>
<PAGE>
              ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
                       CONSOLIDATING CASH FLOWS
                FOR NINE MONTHS ENDED SEPTEMBER 25, 1997
<TABLE>
<CAPTION>
                                                                Guarantor       Nonguarantor                     Consolidated
                                                    Parent     Subsidiaries     Subsidiaries    Eliminations         Total    
                                                  --------     ------------     ------------    ------------     -------------
                                                                                (in thousands)
<S>                                             <C>            <C>              <C>             <C>              <C>
Net cash provided by (used in)
  operating activities                            $(10,997)       $31,008          $(12,426)                         $ 7,585

Cash flows from investing activities:
  Capital expenditures                                 (11)       (26,285)           (9,740)                         (36,036)
  Proceeds from disposition of assets                               1,151            10,722                           11,873
                                                  --------       --------          --------      ---------          --------
      Net cash provided by (used in)
        investing activities                           (11)       (25,134)              982                          (24,163)

Cash flows from financing activities:
  Issuance of common stock                             813                                                               813
  Proceeds from revolving loan and
    long-term borrowings                                                                314                              314
  Deferred financing costs                            (522)                                                             (522)
  Repayment of revolving loan, long-term
    borrowings and capital lease obligations                       (7,047)             (996)                          (8,043)
  Increase (decrease) in Envirodyne loan            (5,357)                           5,357                                 
                                                  --------       --------          --------      ---------          --------
      Net cash provided by (used in)
        financing activities                        (5,066)        (7,047)            4,675                           (7,438)
Effect of currency exchange rate changes on cash                                     (1,006)                          (1,006)
                                                  --------       --------          --------      ---------          --------
Net (decrease) in cash and equivalents             (16,074)        (1,173)           (7,775)                         (25,022)
Cash and equivalents at beginning of period         25,785           (162)           16,171                           41,794
                                                  --------       --------          --------      ---------          --------
Cash and equivalents at end of period              $ 9,711        $(1,335)          $ 8,396                          $16,772
                                                   =======        =======           =======      =========           =======
/TABLE
<PAGE>
<PAGE>
           ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
              CONSOLIDATING STATEMENTS OF OPERATIONS
             FOR NINE MONTHS ENDED SEPTEMBER 26, 1996

<TABLE>
<CAPTION>
                                                                Guarantor       Nonguarantor                     Consolidated
                                                    Parent     Subsidiaries     Subsidiaries    Eliminations         Total    
                                                  --------     ------------     ------------    ------------     -------------
                                                                                (in thousands)
<S>                                             <C>            <C>              <C>             <C>              <C>
NET SALES                                                        $314,794          $203,838       $(29,324)         $489,308

COSTS AND EXPENSES
  Cost of sales                                                   241,813           154,734        (30,022)          366,525
  Selling, general and administrative               $4,021         46,626            32,433                           83,080
  Amortization of intangibles and
    excess reorganization value                                     9,804             2,622                           12,426
                                                  --------       --------          --------      ---------          --------
OPERATING INCOME (LOSS)                             (4,021)        16,551            14,049            698            27,277

  Interest income                                      649                              537                            1,186
  Interest expense                                  32,605          9,730             1,619                           43,954
  Intercompany interest expense (income)           (30,676)        28,056             2,620
  Management fees (income)                          (4,656)         3,647             1,009
  Other expense (income), net                        1,958             (9)            2,376                            4,325
  Equity loss (income) in subsidiary                12,428         (3,467)                          (8,961)                 
                                                  --------       --------          --------      ---------          --------
INCOME (LOSS) BEFORE INCOME TAXES                  (15,031)       (21,406)            6,962          9,659           (19,816)
  Income tax provision (benefit)                    (1,015)        (8,280)            3,495                           (5,800)
                                                  --------       --------          --------      ---------          --------
NET INCOME (LOSS)                                 $(14,016)     $ (13,126)           $3,467       $  9,659          $(14,016)
                                                  ========      =========            ======       ========          ========

</TABLE>
             CONSOLIDATING STATEMENTS OF OPERATIONS
           FOR THREE MONTHS ENDED SEPTEMBER 26, 1996


<TABLE>
<CAPTION>
                                                                Guarantor       Nonguarantor                     Consolidated
                                                    Parent     Subsidiaries     Subsidiaries    Eliminations         Total    
                                                  --------     ------------     ------------    ------------     -------------
                                                                                (in thousands)
<S>                                             <C>            <C>              <C>             <C>              <C>
NET SALES                                                        $104,382           $70,628       $(11,185)         $163,825

COSTS AND EXPENSES
  Cost of sales                                                    80,898            53,205        (11,340)          122,763
  Selling, general and administrative               $1,208         15,660            11,266                           28,134
  Amortization of intangibles and
    excess reorganization value                                     3,347               873                            4,220
                                                  --------       --------          --------      ---------          --------
OPERATING INCOME (LOSS)                             (1,208)         4,477             5,284            155             8,708

  Interest income                                      246                              168                              414
  Interest expense                                  10,834          3,224               524                           14,582
  Intercompany interest expense (income)           (10,017)         9,355               662
  Management fees (income)                          (1,467)         1,210               257
  Other expense (income), net                         (125)            12             1,177                            1,064
  Equity loss (income) in subsidiary                 3,810         (1,403)                          (2,407)                 
                                                  --------       --------          --------      ---------          --------
INCOME (LOSS) BEFORE INCOME TAXES                   (3,997)        (7,921)            2,832          2,562            (6,524)
  Income tax provision (benefit)                       (73)        (3,956)            1,429                           (2,600)
                                                  --------       --------          --------      ---------          --------
NET INCOME (LOSS)                                  $(3,924)       $(3,965)           $1,403        $ 2,562          $ (3,924)
                                                  ========      =========            ======       ========          ========
</TABLE>

<PAGE>
<PAGE>
              ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
                       CONSOLIDATING CASH FLOWS
               FOR NINE MONTHS ENDED SEPTEMBER 26, 1996

<TABLE>
<CAPTION>
                                                                Guarantor       Nonguarantor                     Consolidated
                                                    Parent     Subsidiaries     Subsidiaries    Eliminations         Total    
                                                  --------     ------------     ------------    ------------     -------------
                                                                                (in thousands)
<S>                                             <C>            <C>              <C>             <C>              <C>
Net cash provided by (used in)
  operating activities                             $(9,626)       $21,453           $28,036                          $39,863

Cash flows from investing activities:
  Capital expenditures                                  (4)       (19,346)           (3,482)                         (22,832)
  Proceeds from disposition of assets                  136          1,762               231                            2,129
                                                  --------       --------          --------      ---------          --------
      Net cash provided by (used in)
        investing activities                           132        (17,584)           (3,251)                         (20,703)

Cash flows from financing activities:
  Issuance of common stock                              20                                                                20
  Proceeds from revolving loan and
    long-term borrowings                                            1,130                                              1,130
  Deferred financing costs                             (91)                                                              (91)
  Repayment of revolving loan, long-term
    borrowings and capital lease obligations                       (6,354)           (4,555)                         (10,909)
  Increase (decrease) in Envirodyne loan            23,450                          (23,450)                                
                                                  --------       --------          --------      ---------          --------
      Net cash provided by (used in)
        financing activities                        23,379         (5,224)          (28,005)                          (9,850)
Effect of currency exchange rate
  changes on cash                                                                      (440)                            (440)
                                                  --------       --------          --------      ---------          --------
Net increase (decrease) in cash
  and equivalents                                   13,885         (1,355)           (3,660)                           8,870
Cash and equivalents at beginning of period         18,013            486            11,826                           30,325
                                                  --------        -------           -------      ---------          --------
Cash and equivalents at end of period             $ 31,898        $  (869)          $ 8,166                          $39,195
                                                  ========        =======           =======       ========           =======
/TABLE
<PAGE>

<PAGE>

      VISKASE HOLDING CORPORATION AND SUBSIDIARIES


The financial information included in this quarterly report has
been prepared in conformity with the accounting principles and
practices reflected in the financial statements included in the
annual report on Form 10-K filed with the Securities and Exchange
Commission for the year ended December 26, 1996 (1996 Form 10-K).
These quarterly financial statements should be read in conjunction
with the financial statements and the notes thereto included in the
1996 Form 10-K. The accompanying financial information, which is
unaudited, reflects all adjustments which are, in the opinion of
management, necessary for a fair statement of the results for the
interim periods presented.

The condensed consolidated balance sheet as of December 26, 1996
was derived from the audited Viskase Holding Corporation's
consolidated financial statements included in Envirodyne
Industries, Inc.'s annual report on Form 10-K.

Reported interim results of operations are based in part on
estimates which may be subject to year-end adjustments. In
addition, these quarterly results of operations are not necessarily
indicative of those expected for the year.

<PAGE>
<PAGE>
       VISKASE HOLDING CORPORATION AND SUBSIDIARIES
              CONSOLIDATED BALANCE SHEETS


                                     September 25,     December 26,
                                         1997             1996    
                                     ------------      -----------
                                            (in thousands)   

ASSETS
  Current assets:
    Cash and equivalents               $  8,396         $ 16,171
    Receivables, net                     43,392           43,634
    Receivables, affiliates              53,069           51,269
    Inventories                          33,119           36,509
    Other current assets                 10,318           10,224
                                       --------         --------  
      Total current assets              148,294          157,807

  Property, plant and equipment         139,215          158,175
    Less accumulated depreciation        27,647           30,086
                                       --------         --------
    Property, plant and
      equipment, net                    111,568          128,089
 
  Deferred financing costs                  526              758
  Other assets                            1,862            2,025
  Excess reorganization value            34,912           37,405
                                       --------         --------  
                                       $297,162         $326,084
                                       ========         ========  

LIABILITIES AND STOCKHOLDER'S EQUITY
  Current liabilities:
   Short-term debt including current
      portion of long-term debt         $ 3,461        $   4,109
    Accounts payable                     11,753           13,736
    Accounts payable and
      advances, affiliates               32,160           51,891
    Accrued liabilities                  23,530           31,677
                                       --------         --------  
      Total current liabilities          70,904          101,413

  Long-term debt                          3,347            4,854

  Accrued employee benefits               4,147            4,331
  Deferred and noncurrent
    income taxes                         21,917           24,899
  Intercompany loans                     64,389           58,691

  Commitments and contingencies

  Stockholder's equity:
    Common stock, $1.00 par value,
      1,000 shares authorized;
      100 shares issued and outstanding
    Paid in capital                     103,463          103,463
    Retained earnings                    26,757           21,152
    Cumulative foreign currency
      translation adjustments             2,238            7,281
                                       --------         --------  
        Total stockholders' equity      132,458          131,896
                                       --------         --------  
                                       $297,162         $326,084
                                       ========         ========

The accompanying notes are an integral part of the consolidated
financial statements.

<PAGE>
<PAGE>
          VISKASE HOLDING CORPORATION AND SUBSIDIARIES
             CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

                                     Three Months      Three Months         Nine  Months        Nine  Months
                                    Ended September   Ended September      Ended September    Ended September
                                       25, 1997          26, 1996             25, 1997            26, 1996   
                                    ---------------   ---------------      ---------------    ---------------
                                          (in thousands, except for number of shares and per share amounts)
<S>                                  <C>               <C>                  <C>                <C>
NET SALES                               $59,905            $70,628            $184,711           $203,838

COSTS AND EXPENSES
  Cost of sales                          45,164             53,205             140,313            154,734
  Selling, general
    and administrative                    9,554              9,767              29,017             28,161
  Amortization of intangibles
    and excess reorganization value         833                873               2,398              2,622
                                        -------            -------            --------           --------
OPERATING INCOME                          4,354              6,783              12,983             18,321

  Interest income                             4                168                 271                537
  Interest expense                          352                524               1,158              1,619
  Intercompany interest expense             710                662               2,245              2,620
  Management fees                           196                257                 778              1,009
  Other (income) expense, net            (1,264)             1,177                (757)             2,376
                                        -------            -------            --------           --------
INCOME BEFORE INCOME TAXES                4,364              4,331               9,830             11,234

  Income tax provision                    1,790              2,021               4,225              5,181
                                        -------            -------            --------           --------

NET INCOME                              $ 2,574           $  2,310              $5,605             $6,053
                                        =======           ========              ======             ======
WEIGHTED AVERAGE
  COMMON SHARES                             100                100                 100                100


PER SHARE AMOUNTS:

NET INCOME                              $25,740            $23,100             $56,050            $60,530
                                        =======            =======             =======            =======
<FN>
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>

<PAGE>
<PAGE>
              VISKASE HOLDING CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                     Nine    Months   Ended      
                                                              -----------------------------------
                                                              September 25,          September 26,
                                                                  1997                   1996    
                                                              ------------           ------------
                                                                     (in thousands)
<S>                                                           <C>                    <C>
Cash flows from operating activities:
  Net income                                                     $ 5,605               $ 6,053
  Adjustments to reconcile net income 
    to net cash provided by operating activities:
      Depreciation                                                 7,488                 8,334
      Amortization of intangibles and excess
        reorganization value                                       2,398                 2,622
      Amortization of deferred financing fees and discount           152                   170
      (Decrease) in deferred and noncurrent income taxes            (254)                 (578)
      (Gain) on disposition of assets                               (878)                   (6)

      Changes in operating assets and liabilities:
        Accounts receivable                                       (3,195)                6,469
        Accounts receivable, affiliates                           (5,741)               (4,351)
        Inventories                                                 (492)                2,010
        Other current assets                                        (691)                 (430)
        Accounts payable and accrued liabilities                    (285)                9,474
        Accounts payable and advances, affiliates                (17,134)               (1,731)
        Other                                                       (399)                     
                                                                 -------              --------
      Total adjustments                                          (19,031)               21,983
                                                                 -------              --------
        Net cash provided by (used in) operating activities      (13,426)               28,036

Cash flows from investing activities:
  Capital expenditures                                            (9,740)               (3,482)
  Proceeds from disposition of assets                             11,722                   231
                                                                 -------              --------
        Net cash provided by (used in) investing activities        1,982                (3,251)

Cash flows from financing activities:
  Proceeds from revolving loan and long-term borrowings              314         
  Repayment of revolving loan and long-term borrowings              (996)               (4,555)
  Increase (decrease) in Envirodyne loan                           5,357               (23,450)
                                                                 -------              --------
        Net cash provided by (used in) financing activities        4,675               (28,005)

Effect of currency exchange rate changes on cash                  (1,006)                 (440)
                                                                 -------              --------
Net (decrease) in cash and equivalents                            (7,775)               (3,660)
Cash and equivalents at beginning of period                       16,171                11,826
                                                                 -------              --------
Cash and equivalents at end of period                            $ 8,396              $  8,166
                                                                 =======              ========
----------------------------------------------------------------------------------------------------

Supplemental cash flow information:
  Interest paid                                                     $186                   $520
  Income taxes paid                                               $3,579                   $710

<FN>
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>

<PAGE>
<PAGE>
               VISKASE HOLDING CORPORATION AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1. INVENTORIES (dollars in thousands)

Inventories consisted of:
                            September 25,        December 26,
                               1997                 1996      
                            ------------        -------------
Raw materials                 $ 4,365             $ 3,728
Work in process                 8,893              11,395
Finished products              19,861              21,386
                              -------             -------
                              $33,119             $36,509
                              =======             =======

2. CONTINGENCIES

In late 1993, Viskase commenced a legal action against American
National Can Company (ANC) in Federal District Court for the Northern
District of Illinois, Eastern Division, 93C7651. Viskase claimed that
ANC's use of two different very low density polyethylene plastic
resins in the manufacture of ANC's multi-layer barrier shrink film
products was infringing various Viskase patents relating to multi-
layer barrier plastic films used for fresh red meat, processed meat
and poultry product applications. In November 1996, after a three-week
trial, a jury found that ANC had willfully infringed Viskase's patents
and awarded Viskase $102.4 million in compensatory damages. The Court
also entered an order permanently enjoining ANC from making or selling
infringing products after December 23, 1996.

On September 29, 1997, the Court set aside the jury verdict in part
and ordered a retrial on certain issues. The Court upheld the jury
finding on the validity of all of Viskase's patents and the jury
finding that ANC had wilfully infringed Viskase's patents by ANC's use
of Dow Chemical Company's "Attane" brand polyethylene plastic resin
in ANC's products. However, the Court ordered a new trial on the issue
of whether ANC's use of Dow Chemical Company's "Affinity" brand
polyethylene plastic resin infringed Viskase's patents and whether
such conduct was wilful. Because the jury rendered one general damage
verdict, the Court ordered a retrial of all damage issues. By
operation of the Court's order, the injunction in respect of ANC's
future use of the "Affinity" brand resin was removed. No new trial
date has been set. The Company expects ANC to vigorously contest this
matter and to appeal any final judgment. No part of the pending claims
have been recorded in the Company's financial statements.

In March 1997 Viskase Corporation received a subpoena from the
Antitrust Division of the United States Department of Justice relating
to a grand jury investigation of the sausage casings industry. Viskase
Corporation is cooperating fully with the investigation.

The Company and its subsidiaries are involved in various legal
proceedings arising out of their business and other environmental
matters, none of which is expected to have a material adverse effect
upon results of operations, cash flows or financial position.

3.  ACCOUNTING STANDARDS

The Company will implement the provisions of Statement of Financial
Accounting Standards No. 128, "Earnings per Share" (SFAS No. 128),
which will be effective for interim and annual financial statements
issued for periods ending after December 15, 1997. SFAS No. 128
simplifies the previous standards for computing earnings per share,
replacing the presentation of primary earnings per share with a
presentation of basic earnings per share. It also requires dual
presentation of basic and diluted earnings per share on the face of
the income statement for all entities with complex capital structures,
which applies to the Company. Management believes that adoption of
SFAS No. 128 will not have a material effect on the Company's earnings
per share amounts.

The Company will implement the provisions of Statement of Financial
Accounting Standards No. 129, "Disclosure of Information About Capital
Structure" (SFAS No. 129), which will be effective for interim and
annual financial statements issued for periods ending after December
15, 1997. SFAS No. 129 requires that companies include additional
detail in disclosures about capital structure related to rights and
privileges associated with outstanding security issues. Management
believes that adoption of SFAS No. 129 will not have a material effect
on the Company.

The Company will implement the provisions of Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" (SFAS
No. 130), which will be effective for interim and annual financial
statements issued for periods ending after December 15, 1997. SFAS No.
130 establishes standards for reporting and display of comprehensive
income and its components in a full set of general purpose financial
statements. Management believes that adoption of SFAS No. 130 will not
have a material effect on the Company.

The Company will implement the provisions of Statement of Financial
Accounting Standards No. 131, "Disclosures about Segments of an
Enterprise and Related Information" (SFAS No. 131), which will be
effective for interim and annual financial statements issued for
periods ending after December 15, 1997. SFAS No. 131 specifies revised
guidelines for determining an entity's operating segments and the type
and level of financial information to be disclosed. Management
believes that adoption of SFAS No. 131 will not have a material effect
on the Company.


ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
          -----------------------------------------------------------
          AND RESULTS OF OPERATIONS (dollars in thousands)
          ------------------------------------------------

The accompanying management's discussion and analysis of financial
condition and results of operations should be read in conjunction with
the following table:

                                          Three Months Ended     
                                        -----------------------
                                         September   September
                                         25, 1997    26, 1996  
                                        ----------  ----------
                                           (in thousands)

Net sales:
  Food packaging products                 $132,282   $142,944
  Disposable foodservice supplies           22,722     20,881
                                          --------   --------
                                          $155,004   $163,825
                                          ========   ========
Operating income:
  Food packaging products                   $1,925     $8,027
  Disposable foodservice supplies            2,065      1,880
  Other and eliminations                    (1,320)    (1,199)
                                           -------    -------
                                            $2,670     $8,708
                                           =======    =======
Depreciation and amortization 
  under capital lease
  and amortization of
  intangible expense:
  Food packaging products                  $12,770    $13,426
  Disposable foodservice supplies            1,335      1,250
  Other                                          6         12
                                           -------    -------
                                           $14,111    $14,688
                                           =======    =======
Capital expenditures:
  Food packaging products                  $ 8,711    $ 5,730
  Disposable foodservice supplies            2,322        533
  Other                                                     1
                                           -------    -------
                                           $11,033    $ 6,264
                                           =======    =======

Results of Operations
---------------------

The Company's net sales for the first nine months and third quarter
of 1997 were $466.1 million and $155.0 million, respectively, which
represented decreases of 4.7% and 5.4%, respectively, from comparable
periods of 1996. Third quarter net sales at Viskase decreased by 5.9%
from the prior year. The benefits of a stronger presence in the Latin
American markets were offset by lower pricing on small diameter
cellulosic casings. European sales were also negatively affected by
foreign currency translation due to the strengthening of the U.S.
dollar. Third quarter net sales at Clear Shield increased 8.8% from
the prior year due to volume expansion in the western region markets
partially offset by lower pricing due to competitive pressures. Third
quarter net sales at Sandusky decreased by 29.1%. Thermoform sales
increased 9.8% for the quarter. This increase was offset by the
absence of injection molding sales due to the previously announced
closing of its injection molding operations.

Operating income for the first nine months and third quarter of 1997
was $17.7 million and $2.7 million. The Company's 1997 third quarter
operating results included a $3.5 million restructuring charge (see
Note 5). Operating income for the first nine months and third quarter
of 1997, excluding the effect of the restructuring charge, decreased
22.2% and 29.1%, respectively, from comparable periods of 1996. The
decrease in operating income resulted primarily from declines in gross
margins caused by continued price competition in the U.S. and Europe,
particularly within the casing product lines. Additionally, lower
volumes at Sandusky negatively affected gross margins. 

The British beef industry continues to be affected by concerns over
bovine spongiform encephalopathy (BSE), or mad cow disease. While
certain of our film product lines in Europe are sold to customers in
affected industries, management believes that Viskase's results will
not be significantly affected.

Net interest expense for the nine-month period totaled $41.5 million
representing a decrease of $1.3 million from the first nine months of
1996. The decrease is a result of the combination of lower borrowing
levels, a reduction in amortization of deferred financing fees and the
effects of translation.

Other income (expense) approximated $(1.8) million and $(4.3) million
for the first nine months of 1997 and 1996, respectively. The 1997
expense consists principally of foreign exchange losses. The $1.0
million gain recorded on the January 1997 sale of the oriented
polystyrene business is offset by a $(1.0) million reserve on the loss
of the sale of the Puerto Rico facility. The 1996 expense included a
$(2.0) million charge for the termination of the Management Agreement
with D.P. Kelly & Associates, L.P.

The Company has entered into forward foreign exchange contracts to
hedge certain foreign currency transactions on a continuing basis for
periods consistent with its committed foreign exchange exposures. This
practice minimizes the effect of foreign exchange rate movements on
the Company's operating results. The Company's hedging activities do
not subject the Company to additional exchange risk because gains and
losses on these contracts offset losses and gains on the transactions
being hedged. The cash flows from forward contracts are classified
consistent with the cash flows from the transactions or events being
hedged.

The tax benefit for the first nine months resulted from the benefit
of U.S. losses partially offset by the provision related to income
from foreign subsidiaries. The Company's effective tax rate reflects
the permanent differences in the U.S. resulting from non-deductible
amortization, foreign losses for which no tax benefit is provided, and
the reduction of a prior year valuation allowance. The reduction in
the valuation allowance in the third quarter has affected the rate in
the third quarter. A benefit of $14.8 million was provided on a loss
before income taxes of $25.6 million. The U.S. tax benefit is recorded
as a reduction of the deferred tax liability and does not result in
a refund of income taxes.

Other
-----

The Company entered into a contract to sell its Barceloneta, Puerto
Rico facility. The transaction was completed in the fourth quarter at
a loss of approximately $1.0 million; this loss was recognized in the
third quarter.

In September 1997, the Company announced that it has retained
Donaldson, Lufkin and Jenrette Securities Corporation to assist the
Board of Directors in evaluating the Company's strategic alternatives.

In March 1997, the Company announced that it was exploring the
potential sale of Viskase Corporation's PVC film business and on July
11, 1997, the Company announced that Viskase Corporation had entered
into a non-binding letter of intent with LINPAC Plastics Limited for
the purchase of such PVC film business. Viskase's plants in Aurora,
Ohio, and Sedgefield, England, would be affected by a sale. The
purchase is subject to a number of contingencies and is expected to
be consummated during the fourth quarter.

In February 1997, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards No. 128, "Earnings
per Share" (SFAS No. 128). This statement will be adopted by the
Company, as required, for periods ending after December 15, 1997.
Implementation of this statement is not expected to have a material
impact on the earnings-per-share data presented by the Company.

In February 1997, the FASB issued SFAS No. 129, "Disclosure of
Information About Capital Structure." This statement will be adopted
by the Company, as required, for periods ending after December 15,
1997. Implementation of this statement is not expected to have a
material impact on the Company.

In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income." This statement will be adopted by the Company, as required,
for periods ending after December 15, 1997. Implementation of this
statement is not expected to have a material impact on the Company.

In June 1997, the FASB issued SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information." This statement
will be adopted by the Company, as required, for periods ending after
December 15, 1997. Implementation of this statement is not expected
to have a material impact on the Company.

Liquidity and Capital Resources
-------------------------------

Cash and equivalents decreased by $25.0 million during the nine months
ended September 25, 1997. Cash flows used in investing activities of
$24.2 million and used in financing activities of $7.4 million
exceeded funds provided by operations of $7.6 million. Cash flows
provided by operating activities were principally attributable to the
Company's loss from operations and the Company's seasonal increase in
working capital offset by the effect of depreciation and amortization.
Cash flows used for financing activities were principally attributable
to the principal repayment under the GECC Lease. Cash flows used in
investing activities consist principally of capital expenditures for
property, plant and equipment net of the proceeds from the sale of
certain assets principally related to the Company's former oriented
polystyrene business.

The Company finances its working capital needs through a combination
of cash generated through operations and borrowings under the
Revolving Credit Facility and proceeds available from asset sales. The
availability of funds under the Revolving Credit Facility is subject
to the Company's compliance with certain covenants (which are substan-
tially similar to those included in the Indenture), to borrowing base
limitations measured by accounts receivable and inventory of the
Company and to reserves which may be established in the discretion of
the lenders. Currently, there are no drawings under the $20 million
Revolving Credit Facility.

The Company's Senior Secured Notes, Revolving Credit Facility and
Letter of Credit Facility contain a number of financial covenants
that, among other things, require the maintenance of a minimum level
of tangible net worth, maximum ratios of debt and senior debt to total
capitalization, and a minimum fixed charge coverage. The Company
solicited and received the required consents from the holders of
Senior Secured Notes for certain amendments to certain financial
covenants, and waivers under, the Senior Secured Notes Indenture. In
addition, the Company has amended, and received substantially similar
waivers under, the Revolving Credit Facility and Letter of Credit
Facility. The Company is currently in compliance with the amended
covenants under the Senior Secured Notes Indenture, Revolving Credit
Facility and Letter of Credit Facility.

There are no significant restrictions on the Company's ability to
transfer funds among its operations under the terms of its principal
debt agreements.

The Company anticipates that its operating cash flow, asset sales, and
borrowings under the Revolving Credit Facility will be sufficient to
meet its operating expenses and to service its interest payments on
the Senior Secured Notes, the 10.25% Notes and its other outstanding
indebtedness. The Company will be required to satisfy its $80 million
mandatory redemption obligation with respect to the Senior Secured
Notes in 1999 and to pay the remaining principal amount of the Senior
Secured Notes in 2000. Additionally, the Company's 10.25% Notes, of
which $219.3 million principal amount is outstanding, will mature in
December 2001. The Company expects that in order to make these
payments it will be required to pursue one or more alternative
strategies, such as refinancing its indebtedness, selling additional
equity capital, reducing or delaying capital expenditures, or selling
assets. There can be no assurance that any of these strategies could
be effected on satisfactory terms, if at all.

Capital expenditures for the first nine months of 1997 and 1996
totaled $36.0 million and $22.8 million, respectively. Capital
expenditures for 1997 are expected to be approximately $45 million.

The Company spent approximately $7 million in 1996 on research and
development programs, including product and process development, and
on new technology development. The 1997 and future research and
development and product introduction expenses are expected to
approximate $8 million to $9 million annually. Among the projects
included in the current research and development efforts is the
application of certain patents and technology licensed by Viskase to
a new process for the manufacture of cellulosic casings. The first
production unit is currently under construction and is expected to
begin full production in late 1998. The commercialization of these
applications and the related capital expenditures associated with such
commercialization will require substantial financial commitments in
future periods.

The Company and its subsidiaries are taking actions to provide that
their computer systems are capable of processing for the periods of
the year 2000 and beyond. The costs associated with this are not
expected to significantly affect operating cash flow.



                PART II. OTHER INFORMATION

Item 1 - Legal Proceedings
         -----------------
For a description of pending litigation and other contingencies, see
Part 1, Note 3, Contingencies in Notes to Consolidated Financial
Statements for Envirodyne Industries, Inc. and Subsidiaries.


Item 2 - Changes in Securities
         ---------------------
No reportable events occurred during the quarter ended September 25,
1997.


Item 3 - Defaults Upon Senior Securities
         -------------------------------
None.


Item 4 - Submission of Matters to a Vote of Security Holders
         ---------------------------------------------------
None.


Item 5 - Other Information
         -----------------
None.


Item 6 - Exhibits and Reports on Form 8-K
         --------------------------------

(a)      Exhibits

 10.22   Second Amendment to/Consent and Waiver under Revolving Credit
         Agreement, dated as of August 4, 1997, between Envirodyne
         Industries, Inc. and the Prudential Insurance Company of
         America.

 10.23   Second Supplemental Indenture, dated as of September 2, 1997,
         between Envirodyne Industries, Inc. and Fleet National Bank
         (formerly Shawmut Bank of Connecticut, National Association),
         as Trustee.

 10.24   Amendment No. 2 to Credit Agreement, dated as of August 5,
         1997, between Envirodyne Industries, Inc. and BT Commercial
         Corporation, individually and as agent.


(b)      Reports on Form 8-K

         None.
<PAGE>
                             SIGNATURES
                             ----------


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.



                               ENVIRODYNE INDUSTRIES, INC.   
                               ---------------------------
                               Registrant




                               By: /s/                          
                                   --------------------------
                                   Gordon S. Donovan
                                   Vice President, Chief Financial
                                   Officer and Treasurer
                                   (Duly authorized officer
                                    and principal financial
                                    officer of the registrant)



Date:  November 10, 1997