Dart Distributing, a Chaska, Minn.-based rackjobber, was apparently shut down Jan. 28 when its lender pulled the plug on its revolving credit facility.

Dart Distributing, a Chaska, Minn.-based rackjobber, was apparently shut down Jan. 28 when its lender pulled the plug on its revolving credit facility.

According to sources, First Source Capital in Rolling Meadows, Ill., supplied the revolving credit facility, which was secured by Dart’s inventory and assets, and the bank forced the closure by failing to meet payroll. The bank is now said to have someone on site who is trying to assess whether to try and sell the company or liquidate it through a Chapter 7 filing.

While the account was current in making payments to the major vendors, it was said to be involved in a workout situation with its bank. This usually means that the account is in technical default of the loan covenants. If the bank wants to work with the account to help it return to fiscal health, it will extend waivers to the covenants. But in this case, the bank apparently didn’t like the way the company performed over the holiday selling season.

Dart, founded in 1987, was a family-run operation that sold a majority interest to the Milwaukee-based Cedar Creek financial company in 1997. Dart claims customers that include Best Buy, Musicland, Alco-Duckwall, K's Merchandise, Walgreens, Cub Foods, Target Stores, Gander Mountain, Mills Fleet Farm, Kum & Go, Office Depot, Fry's Food and Drug, Ace Hardware, Urban Lights, and Albertson's.

Calls and/or e-mails to Dart, Cedar Creek and First Source were not returned.