National Wholesale Liquidators Files Chapter 11 for Bankruptcy

Discount retailer National Wholesale Liquidators said on Monday that General Electric cut its credit availability by $15 million over the last few weeks, putting a “major hardship” on its ability to pay current and past bills.

“It’s really a bank-financing issue,” Robert Pidgeon, the discounter’s director of personnel, said yesterday. “We are caught in the credit crunch of the world.”

The company, which operates about 50 stores nationwide, first indicated to vendors that it was having financial difficulties late last month. In a letter to vendors on Oct. 27, the company said lender GE Capital had reduced its credit line by $10 million without notice. The discounter filed for Chapter 11 bankruptcy protection Monday night.

Bankruptcy experts say today’s volatile economy likely will limit National Wholesale Liquidators’ options and make it difficult to restructure and emerge from bankruptcy.

“Right now no one is shopping,” Reisman said. “Market conditions in the future are Russian roulette.”