Schwartz Brothers Inc., a troubled wholesale distributor of videocassettes and recorded music, said yesterday that "serious cash flow problems" have left it unable to supply video rental stores with movies scheduled for release this week.
The Lanham-based company said it had lined up Ingram Entertainment Inc. of Nashville, Tenn., to fill these orders.
The cash crunch puts the company's future in serious doubt. Marilyn Schwartz, a spokeswoman who is no relation to the founding family, said the company's managers were "looking at six or seven options" and that an announcement was expected within 48 hours.
Seth Goldstein, publisher of Seth Goldstein's Video Report, said "Schwartz has been in financial hot water for a long time." After yesterday's announcement, he said, "One possibility is that they will seek Chapter 11 court protection."