Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, July 14, 1994 TAG: 9408050030
SECTION: BUSINESS PAGE: B8 EDITION: METRO
SOURCE: SANDRA BROWN KELLY STAFF WRITER
DATELINE: LENGTH: Medium
Owner Richard Walters said his two stores, on Roanoke's downtown City Market and in Blacksburg on the edge of the Virginia Tech campus, showed a profit. But William Terry, attorney for Walters' largest creditor, NationsBank Corp., said the June accounting looked like a loss.
U.S. Bankruptcy Judge Ross Krum said he, too, was concerned that the bookstores may be losing money, but he decided to give the company another chance anyway. He said the stores can continue to use income from sales to pay expenses, but he ordered Walters to return to court on Aug. 8 to give an accounting of July's business.
If the judge doesn't like the report, he could rule that the stores can't use cash receipts to pay expenses, which means they can't stay open, said Tom Dickenson, the Roanoke attorney representing Walters.
Dickenson said after Wednesday's hearing that the judge's concern about the stores' cash flow was "valid," but that Walters still hopes to have a good enough July to turn the business around.
He said the first half of the month has been "pretty good" and that Walters is planning some promotions to increase cash flow.
Dickenson said his client has been told that if he can't "under all circumstances" show that he has made money, the judge "may shut us down."
BS&T filed in April for protection from creditors during reorganization under Chapter 11 bankruptcy, but Dickenson has had the case for only a month.
The purpose of the June hearing was to ask the court to allow BS&T to use cash to pay operating expenses, including the purchase of new merchandise, which the stores needed to attract customers.
NationsBank attorney Terry argued that allowing the stores to limp along was merely postponing the inevitable. Terry said the drop in sales from $2.4 million in 1992 to $2.1 million and $1.3 million over the next two years indicated "a company out of control."
Weekly sales from late April through the end of May ranged from $15,989 to $20,013, court records show.
Walters and a group of partners owe a unit of NationsBank about $500,000 borrowed at 18 percent interest.
Memo: ***CORRECTION***