Restaurant distributor COI files Ch. 11 - Nashville Business Journal:

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a Nashville-based foodservice distributor with nearlya half-billion dollars in revenude and customers such as Shoney's, Applebee's and , has filed for Chaptet 11 bankruptcy. Citing risinv fuel prices and the loss of one of itsbiggesf customers, COI has debts in the $50 to $100 millionh range, including a $2.3 million debt to Ryder Trans Services in La Over the last several months, the company, whicgh has 700 employees and has distribution centerws in Nashville, Tifton, Ga., and Ripley, W. Va., has starter to reduce the number of restaurants it serves to cut according tothe filing. Company officials declined to comment onthe filing. Commissary Operations Inc.
does businesw as and also manufactures food products through a second Nashvilles divisioncalled Chairman's Choice Foods. Accordiny to the bankruptcy filing, COI lost a customer in March 2007 whos e business had generated 18 percent ofthe company's revenues. The compangy had revenues of $470 milliobn in 2007, according to Business Journal Inlate 2007, COI obtained a largre new account that more than replaced the volum e of lost sales, however, the company had to invesr substantial capital in early 2008 to service the new customer, accordinhg to the filing. Also this year, the companuy lost several million dollars when its customer closed afterd filing Chapter7 bankruptcy.
Bankruptcy Attorney Susanb Limor says there is a ripple effect in the bankruptcyh courts when one company is dependenton "If one customer is a large portion of a company's busines s they become economically intertwined with them," Limodr says. "The more diverse your customerpool is, the bettetr off you are." Amy Vinson, a restaurant analyst with Avondalre Partners, says food, freight and gas costs are up in the industryt and there is little profit margin. Vinson says regiona distributors don't have a larged enough customer base to dilute the particulaer impact any one customercan have. "That's where they can get into Vinson says.
COI say it was further hurt by risinhgas prices. "The rise in fuel price s has been very detrimental tothe (COI's) profitability," accordinb to the filing. The company is askinyg the court for control of its bank accountxs to continuebusiness operations.