Norwalk Distributors is preparing to shut down, and, say sources, is negotiating to ease the pain of the closure for suppliers.

Norwalk Distributors is preparing to shut down, and, say sources, is negotiating to ease the pain of the closure for suppliers.

According to sources, Trent George, who acquired the Anaheim Calif.-based wholesaler from the founding Shropshall family in September 2003, decided during the week of May 23 to pull the plug when the operation got into a cash-flow squeeze.

Since the acquisition, Norwalk has been funding operations from cash-flow because George never went to a bank for a line of credit. George is trying to avoid a Chapter 11 filing, or at the very least negotiate a pre-packaged Chapter 11 proceeding, in order to get the greatest possible recovery for suppliers.

The good news is that in closing down, there is no bank on line first to get paid. The bad news for small suppliers is the major vendors are all secured, and are first in line.

Since the major vendors all hold liens on the wholesaler's inventory and account receivables, George is in negotiations to allow the latter to be collected by Irvine, Calif.-based Super D. It is hoped that this will improve the recovery of payments due them.

In addition, Super D will take on the Norwalk sales staff.

George's negotiations also involve trying to get the majors vendor to take a slight "haircut" on what they are owed, making funds available for partial payments to smaller suppliers.

George would only confirm that he is shutting down and is involved in negotiations as to how that will occur.

Super D executives didn't return a call for comment.

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