Fleming Won't Comment on Bankruptcy Rumors; Observers See Tighter Credit Terms

NEW YORK - Grocery distributor Fleming Cos., which has seen several top executives depart in recent weeks as it rides out a federal investigation of its accounting practices, declined to comment Thursday on speculation that it may soon file for bankruptcy, Dow Jones Newswires reports.

"We wouldn't discuss market speculation or rumors of that type," Fleming spokesman Shane Boyd told Dow Jones Newswires.

Fleming is still negotiating with banks to replace its five-year revolving line of credit, Boyd said. In response to unconfirmed market speculation that the company has fully drawn down its current credit line, Boyd said the company doesn't make such disclosures outside normal quarterly filings with the Securities and Exchange Commission.

Boyd added that he wasn't aware of any manufacturers that have tightened credit terms. "I'm not aware of anything outside the normal case-by-case discussions we have with all our vendors," Boyd said.

Industry observers interviewed by Dow Jones Newswires said that while vendors haven't stopped shipping goods to Fleming, they have become stricter on terms, demanding payment for past-due accounts or cash upon delivery in advance of new shipments.

"Credit terms are getting tighter, and vendors are bracing themselves for the worst, but goods are still moving," said Richard Hastings, an analyst at Bernard Sands, New York.
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