Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, August 9, 1994 TAG: 9408100013
SECTION: BUSINESS PAGE: C8 EDITION: METRO
SOURCE: STEPHEN FOSTER STAFF WRITER
DATELINE: LENGTH: Medium
Bookstore owner Richard Walters said in a U.S. Bankruptcy Court hearing that The Hampton Corp., a Rocky Mount computer company, had contracted to sell computer equipment and software in his Blacksburg and Roanoke stores - and guarantee him at least $2,000 a month in income.
BS&T also reported to the court that in July it earned a profit of $2,516 on sales of $75,905, according to Walters' attorney, Tom Dickenson.
Walters said last week's sales were the best the company has had since Christmas, a period that included Blacksburg's Steppin' Out festival. Sales were about $26,000.
The court is allowing Walters to use income from sales to pay the stores' operating expenses temporarily. The expenses include an inventory last week of the company's stock by an outside company, the first in five years.
"That gives us a base line of reliability," Judge Ross Krum said.
He ordered Walters to return to court Sept. 12, when "we'll have another month of financial data to look at."
Since April, when BS&T filed for Chapter 11 protection from creditors during financial reorganization, lawyers for NationsBank Corp. have argued that the stores are losing money. NationsBank, which is owed about $395,000 by the bookstore, has argued that Walters shouldn't be allowed to use the stores' current revenue to buy new merchandise rather than repay old debt.
NationsBank's lawyer, Paul Black, told Krum, "At best, they're treading water." He argued that the inventory evaluation was "a lot of smoke" and questioned the accuracy of Walters' accounting methods.
"There comes a point in time, your honor, when it's time to put an end to things," Black said.
But, referring to one document, Walters said, "We're right on line. The cash is there, and we're making the money we say we're making."
He expressed optimism that the stores would make money in the next few months as university students return to Blacksburg and said the computer deal would help especially.
"If [Krum] is still calling us back by November or December, he's going to see exactly what he wants to see," Walters said. The deadline for Walters' attorneys to file a bankruptcy payment plan is Aug. 25.
The two-month agreement with The Hampton Corp. will allow the computer company to use small amounts of space in each BS&T store to sell equipment and software, Walters said. With stock already in the Blacksburg store and plans to move it into the Roanoke store this weekend, the company has estimated it can sell $150,000 worth of merchandise. It has agreed to pay BS&T 5 percent of any sales over $40,000, with a guaranteed minimum of $2,000 a month.
"People who haven't come to the store heretofore will be more likely to," Walters said.
by CNB