Cooper-Booth Wholesale Files for Bankruptcy
MOUNTVILLE, Pa. -- Cooper-Booth Wholesale Co. filed for bankruptcy protection earlier this week. Executives at the distributor, which delivers to convenience stores across the Mid-Atlantic, put the 250-employee company under Chapter 11 protection in Philadelphia.
President Barry Margolis said a major customer has been accused of smuggling cheap illegal cigarettes, leading federal authorities to get a seizure warrant on Cooper-Booth's PNC Bank account to recover money that the customer had recently made. He did not identify the customer in court papers, according to Dow Jones & Co.
Mountville, Pa.-based Cooper-Booth owes about $10.7 million in bank and credit-card debt, in addition to about $22.8 million worth of trade debt, according to court papers.
Bank officials who saw the seizure warrant declared Cooper-Booth to be in default of its borrowing agreements. That left the company without enough money to pay $61,000 to fuel its trucks and make $2.7 million worth of purchases through the end of the week.
The situation put "the company in the precarious position of not being able to access funds to run the day-to-day operations of the business," Margolis stated in court documents, adding that the bankruptcy filing will help stabilize the company's operations while it deals with federal authorities and bank executives.
Cooper-Booth officials have asked Bankruptcy Judge Magdeline D. Coleman for permission to spend cash that would otherwise be off-limits. The company and its affiliates "will lose significant revenue if they cannot immediately purchase supplies to fill their customer orders as needed," Cooper-Booth's attorney Aris Karalis stated in the court documents.