Spokane Journal of Business

Floor covering supplier here seeks bankruptcy protection

Owner launches a storage operation at former location

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A longtime Spokane flooring supply company has closed its doors and filed for Chapter 7 liquidation in U.S. Bankruptcy Court here, citing debts of $2.1 million.

Floor Supply Distributing Inc., has been in operation here for about 45 years, says company President Lynn Dilliner. He says the poor economy caused the company's demise. He says that in addition to a drop-off in the construction industry, which Floor Supply served, it's become difficult to collect accounts receivable.

"In this last week I've gotten 11 bankruptcies from customers that owe me," Dilliner says. "We had some awfully good accounts, too, but everyone's struggling."

At its peak, Floor Supply also had operations in Seattle, Portland, and Alaska, employed 88 workers, and had annual sales of more than $26 million, he says.

Dilliner says that of Floor Supply's debts, about $1.4 million is owed to him, either as money he invested in the company or for the company's lease on a building, at 1802 N. Langley, that he owns through a separate company, DLLD LLC.

In the filing, Floor Supply lists as assets about $1 million in inventory and $142,000 in accounts receivable, says attorney Timothy Fischer, who is representing the company in the filing.

The filing lists a secured claim of $490,000, owed to Washington Trust Bank.

The largest unsecured claim is $775,000 owed to Dilliner for promissory notes dated between 2004 and 2009. In the filing, the company also lists an unsecured claim of $323,000 to Walton CWOR Swan Industrial 11 LLC, in Chicago, that's identified as a judgment. Dilliner says the judgment is a result of Floor Supply vacating a warehouse in Portland, which Walton was then unable to sublease out.

Now, Dilliner is operating another business through DLLD, called Receiving & Storage, in the 51,000-square-foot warehouse on Langley. That company has one other employee, and offers receiving and storage of flooring materials owned by its customers. He says that venture also is looking into the possibility of recycling floor coverings.

  • Jeanne Gustafson

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