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Hardwood Supply, one of the largest businesses in Burrton, Kansas, has filed for chapter 11 protection, with declared debts of more than $6.7 million, the Wichita Eagle reported yesterday. The business makes hardwood trim for the regional home construction industry and has struggled for several years with large debts. There are four related corporate filings in the bankruptcy court in Wichita, for Hardwood Cabinets LLC, Hardwood Manufacturing LLC, Hardwood Millwork and Supply LLC and their holding company, WK Holdings. The biggest creditors are three banks: Midland National of Newton, owed more than $3 million; First Bank of Newton, owed more than $1.3 million; and Kanza Bank of Kingman, for which the amount owed is not listed in the bankruptcy filings.

The U.S. Federal Reserve was given a week to tell a federal judge its position on immediately rewriting regulations setting debit card swipe fees in the wake of a court found the current rule unlawful, Bloomberg News reported yesterday. U.S. District Judge Richard Leon yesterday ordered Fed General Counsel Scott Alvarez to appear in his courtroom on Aug. 21 after a lawyer for the Fed said it hadn’t made any decisions on how to replace the current rule, or whether to appeal the judge’s ruling. Earlier in the hearing, Judge Leon laid out a timeline that would put a final interim rule in place by the end of the month. An interim final rule takes effect immediately before any public comments are accepted. Yesterday's hearing comes two weeks after retailers battling banks over debit card transaction costs were handed a victory by Judge Leon, who said that merchants were overcharged billions of dollars under an unlawful swipe fee set by the Fed.

Bankruptcy Judge Christopher Sontchi yesterday granted Orchard Supply Hardware Corp. permission to pay up to $3.1 million in bonuses to its top executives, Dow Jones Daily Bankruptcy Review reported today. Judge Sontchi said that he would sign off on the bonuses, which are tied to the successful sale of the company’s business, after a U.S. Trustee grilled Orchard’s advisers on whether the payments complied with bankruptcy laws.

The corporate parent of Fort Worth, Texas-based Hawk Electronics says that it will declare bankruptcy this week and liquidate after defaulting on a loan to its major creditor, which then blocked access to nearly $800,000 in its bank accounts on July 30, the Fort Worth Star-Telegram reported today. Customers are being told that there will be no interruption of service as Hawk, a unit of Teletouch Corp., transfers the account to its master network provider AT&T. Although Teletouch said in a July 30 federal securities filing that would file for chapter 11 reorganization in Delaware this week as it phases out its ongoing business. The company could then file a liquidation plan with the bankruptcy court or convert the bankruptcy to chapter 7 liquidation. The company said it had been trying to negotiate a deal with its New York lender, DCP, so it could meet its short-term obligations. It disclosed in February that DCP had extended a $6 million line of credit. The Fort Worth communications wholesaler-retailer disclosed last month that it had defaulted.

Retailers battling banks over debit-card transaction costs were handed a victory by a U.S. judge, who said that merchants were overcharged billions of dollars under an unlawful swipe fee set by the Federal Reserve, Bloomberg News reported yesterday. U.S. District Judge Richard Leon ruled yesterday that the Fed considered data it wasn’t allowed to use under the Dodd-Frank law in setting the cap on debit-card transaction fees, known as swipe fees, at 21 cents, and neglected to bolster competition in card networks. The decision, unless overturned on appeal, will force regulators to revisit rules that bankers said would cost them 45 percent of their swipe-fee revenue. Lenders collected about $16 billion annually from those fees before the Fed’s regulation and responded by cutting back on perks such as rewards programs and free checking to soften the blow to their profits.

Struggling from the fallout of federal immigration audits, two Southwest grocery-store chains have filed for bankruptcy protection with plans to reorganize, the Wall Street Journal reported on Saturday. California’s Mi Pueblo grocery store operator filed for chapter 11 protection on July 22 after the 21-store chain was told to replace some of its 3,260 workers whose documentation came under review during a U.S. Immigration and Customs Enforcement audit, according to court papers filed with the U.S. Bankruptcy Court in San Jose, Calif. The chain—which stocks its shelves with imported foods from Mexico, South America and other countries for its primarily Hispanic customers—said in court papers that the federal audit led the company to struggle with higher payroll costs and training expenses as new workers have been brought on board, said bankruptcy attorney Robert Harris in court documents. The stores sell fresh tortillas, marinated cuts of meat and specialty cheeses from throughout Central and South America. That filing comes after executives at Pro’s Ranch Market put the company’s 11 stores, which employ about 2,235 workers and are mostly located in Arizona, under bankruptcy protection in May.

Banks and payment networks are pressing state lawmakers to bar retailers from charging customers more to pay with credit cards than with debit cards or cash, Bloomberg News reported today. The laws’ supporters say that they are trying to protect consumers from unfair costs when they make purchases with credit cards. Utah has already passed a law banning such surcharges, and New Jersey may follow suit. In all, about 20 state legislatures are weighing legislation related to payment cards, according to the American Bankers Association. The move for state laws is an extension of a decade-long fight between retailers that include Home Depot Inc., Wal-Mart Stores Inc. and Target Corp., and members of the payments industry, including JPMorgan Chase & Co., the biggest U.S. credit-card lender, and Visa Inc. and Mastercard Inc., the largest networks, over “swipe” fees for debit and credit cards. Because retailers generally have to pay more to banks when their customers use credit cards than when they pay with debit cards, the banks are trying to prevent stores from steering buyers to debit transactions. At stake is an estimated $40 billion that banks take in each year from credit-card swipe fees, according to Madeline Aufseeser, a senior analyst with Boston-based consultancy Aite Group LLC.

Furniture supplier World Imports filed for chapter 11 protection on Wednesday, Furniture Today reported on Friday. The company said a number of factors led to the filing, including a large antidumping tariff, an unsuccessful new software system and writedowns of bad debt. World Imports said in court documents that it has an outstanding balance on a line of credit with PNC Bank for about $11.1 million and about $3.6 million in unsecured trade payables. Deliveries will continue and World Imports plans to unveil a 2014 catalog later this month. The company also said it has partnered with a large trucking company to allow for the implementation of a new next-day delivery program to New York, New Jersey and Philadelphia area customers.

Belle Foods, the operator of former Bruno’s and Food World stores, filed for chapter 11 protection yesterday citing difficulties paying creditors with the revenues from its 57 stores in Alabama, Georgia, Florida, and Mississippi, the Birmingham (Ala.) News reported today. In June 2012, Birmingham-based Belle Foods purchased the stores from Southern Family Markets, a company that took control of a number of Bruno’s and Food World stores after the bankruptcy of what had been a Birmingham grocery titan for much of the last century. According to court documents, Belle Foods owes Southern Family Markets $28 million—$4 million for a loan and $24 million in a revolving line of credit. Belle Foods also owes C&S Wholesale Grocers $6 million—$5.1 in accounts payable and $900,000 on a pension withdrawal liability note. Belle Foods also has around $8 million in other accounts payable due.

An investment group led by actor Patrick Dempsey has completed its $9.2 million acquisition of Tully's Coffee chain, which filed for chapter 11 protection last fall, the Associated Press reported yesterday. Dempsey's group, Global Baristas, won an auction of Tully's assets in federal bankruptcy court in January, beating out a combined rival bid of about $10.6 million from AgriNurture Inc. and Starbucks Corp. Starbucks had wanted to buy about half of Tully's 47 shops in Washington and California and turn them into Starbucks stores, while the rest of the company would keep the Tully's name under the ownership of AgriNurture, which is based in the Philippines. Global Baristas has said that it intends to continue operating Tully's and retain its more than 500 employees.