In the flooring industry over my 35+ years I've watched a lot of distributors get strung out by customers they've had relationships for years in down economies. Mediocre business practices and management usually catch up with them, especially in this downturn. I've seen more distributors take the hit than save the customer, though you'll most likely hear of the failure vs. the save.
Tough call, emotion is typically not your friend in business decisions, the party in debt usually takes advantage of the situation. We've had more than one long-time builder customer take us for $40-80K in the past few years filing bankruptcy.
Is writing off the bad-debt from a solvent customer an option? Can you have a talk with the owner (preferably in person) and voice your concerns and make your decision based on his responses?
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