Avignone Freres, the venerable Columbia Road catering and dining establishment, has filed for Chapter 11 protection under federal bankruptcy laws.
The 67-year-old deli, candy shop, cafe and bakery intends to continue operations and honor all present catering commitments, said John Orcino, president of Avignone Freres.
"Over the years, we have provided excellent service to our many valued Washington-area clients, and together with their support we look forward to this tradition in the years ahead," he added.
The caterer's current liabilities, $823,455, far exceeded its assets of $520,373 at the end of May, according to documents filed in federal bankruptcy court. About half of Avignone Freres' debts were to suppliers, with an additional $161,807 owed in back taxes.
For the nine months ended May 31, Avignone Freres had a net loss of $148,277.
Orcino said his company has taken "drastic measures in production and overhead costs" to overcome its financial difficulties.
Avignone Frere's financial troubles stem from its requirement to pay cash for delivery of goods, while its accounts receivable are taking 60 to 90 days to collect, according to the firm's bankruptcy court filing.
Most caterers in the area have faced this problem, said Lawrence L. Bell, one of Avignone Freres' attorneys.
Columbia Catering, which caters most of the State Department's high-level entertainment, was padlocked for five days in March by the Internal Revenue Service. The Rockville firm's owner said then that Columbia had owed the IRS $85,000 and had been chronically late in paying its taxes because of the slow rate of payment by its customers.
Some of Avignone Freres' largest debts are owed to I. Feldman & Co. Inc. in Savage, Md., Buchanan and Co. in the District, Jacobs Leasing in Landover, Md., and Scott & Co. Inc. in the District.
The restaurant's largest category of debt was for advertising and promotion.
"Avignone Freres filed for Chapter 11 because it doesn't want to leave any of its creditors in the cold," said Bell, one of the company's attorneys. "They're going to try to stay in business."
"We are struggling very hard to come out of Chapter 11," added Orcino.
Orcino's father Pietro, who died last year, began working for Avignone Freres as a baker in the early 1930s after he came to this country from his native Italy.
After several years at other places, including stints as chef to the Italian air attache, at the British embassy and for the late Evelyn Walsh McLean, Orcino bought out the original Avignone Freres owners in 1945.
The catering arm of Orcino's business soon became one of the city's leaders in this field. Avignone Freres served Washington high society, catering affairs at the State Department, White House and the Pan American Union. The Soviet Union was also a loyal Avignone Freres customer.
In the 1960s Avignone Freres' walk-in restaurant trade dropped to about 10 percent of what it once was because of urban problems in the Columbia Road NW area. Orcino closed the restaurant, but in reopened at the same location May 1977.
The caterer was closed for a day last fall because of health code violations. The violations included an unsanitary food processing area and equipment; flies, birds and a cat in food processing area; ineffective roach and rodent control; no soap in restrooms; no certified food supervisor and improper garbage disposal. The restaurant reopened the next day.