WHAT DO WE DO NOW? The Toledo Shirt Company manufactures mens shirts sold to department stores and other outlets throughout Ohio, Illinois, and Indiana. For the past 14 years, one of Tole- dos major customers has been Abraham and Sons, a chain of nine stores selling mens clothing. Mr. Abraham retired 18 months ago and his two sons took complete control of the organization. Since that time, they have invested significant sums of money in an attempt to expand each store by also selling womens clothing. Success in this new mar- ket has been difficult. Abraham and Sons is not known for selling womens clothing, and no one in the company has much expertise in the area. Approximately seven months ago, James Thurber, Toledos chief financial officer, began to notice that it was taking longer than usual to collect payments from Abraham and Sons. Instead of the normal 30 days, the retailer was taking 45 daysand frequently longerto pay each invoice. Because of the amount of money involved, Thurber began to monitor the balance daily. When the age of the receivable ($343,000) hit 65 days, he called Abraham and Sons. The treasurer assured him that the company was merely having seasonal cash flow issues but that payments would soon be back on a normal schedule. Thurber was still concerned and shortly thereafter placed Abraham and Sons on a cash and carry basis. No new sales were to be made unless cash was collected in advance. The companys treasurer immediately called Thurber to complain bitterly. We have been one of your best customers for well over a decade, but now that we have gotten into a bit of trouble you stab us in the back. When we straighten things out here, we will remember this. We can get our shirts from someone else. Our expansions are now complete; we have hired an expert to help us market womens clothing. We can see the light at the end of the tunnel. Abraham and Sons will soon be more profitable than ever. In hopes of appeasing the customer while still protecting his own position, Thurber agreed to sell merchandise to Abraham and Sons on a very limited credit basis. A few days later, Thurber received a disturbing phone call from a vice president with another clothing manufacturer. Weve got to force Abraham and Sons into involun- tary bankruptcy immediately to protect ourselves. Those guys are running the company straight into the ground. They owe me $230,000, and I can only hope to collect a small portion of it now. I need two other creditors to sign the petition and I want Toledo Shirt to be one of them. Abraham and Sons has already mortgaged all of its buildings and equipment so we cant get anything from those assets. Inventory stocks are dwindling and sales have disappeared since theyve tried to change the image of their stores. We can still get some of our money but if we wait much longer nothing will be left but the bones. Should the Toledo Shirt Company be loyal to a good customer or start the bankruptcy process to protect itself? What actions should Thurber take?