LEWISTON – Bob Dinan intends to liquidate the inventory of his Bob’s Discount Off-Price Superstores in order to pay his creditors, his lawyer said Wednesday.
Dinan’s Lewiston-based corporation filed for Chapter 11 bankruptcy protection last week. Jonathan Doolittle, his lawyer, said he’ll fight a motion filed Tuesday by Bob’s Discount Furniture of Connecticut that asks the federal bankruptcy court in Portland to dismiss the request for protection.
Bob’s Discount Furniture is locked in a U.S. District Court battle with Dinan over the use of the Bob’s Discount name.
Furniture Bob opened a store in Maine last summer. He sued Lewiston’s Superstore Bob over the name shortly after, alleging trademark infringement. A federal court trial for that case was set for July, but the bankruptcy case could delay it.
Furniture Bob’s lawyer Bob Keach and his associate Todd Holbrook said Tuesday the bankruptcy filing was intended to frustrate the trademark suit.
Not so, Doolittle said Wednesday. It’s intended to allow Dinan to sell off his inventory in order to pay off his creditors. After that, the business, at least as it stands today, will cease to exist.
Dinan began his Bob’s Discount business in the early 1990s, parlaying a yard sale operation into a small empire of as many as nine stores. Dinan’s business operates four stores today.
One is at its headquarters and superstore in Lewiston, which opened in the former Coca-Cola plant on Lisbon Street in 2000. That deal was in large part financed with a $1.28 million loan guaranteed by the U.S. Department of Agriculture.
The USDA refused to discuss the loan Wednesday, saying it could do so only through a Freedom of Information Act request and after notifying Dinan of the inquiry.
The USDA loan would be secured by Dinan’s Lisbon Street property.
In the bankruptcy filing, Dinan acknowledged owing more than $935,000 to creditors holding the 20 largest unsecured claims against his business. There were scores more with lessor claims.
Banknorth also filed a notice with the court citing an interest in the business.
Doolittle said selling off the inventory in Dinan’s stores and warehouses offers the best hope for those creditors to get payment.
Dinan hasn’t returned calls to his office seeking comment.
A hearing on the motion to dismiss Dinan’s bankruptcy petition is set for next week. Doolittle said Dinan needs the protection afforded by Chapter 11 in order to manage a liquidation sale.
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