Four years ago, when it received the Outstanding Corporate Business Award from the National Minority Business Council, Bell Atlantic Corp. went out of its way to praise Shirley Blair and her small Silver Spring firm.

Blair and her company -- Blair Temporaries and Staffing Inc. -- had become symbols for minority business. Not only had she begun her own firm in 1993, but Blair had reached out to other minority-owned companies by organizing a loose consortium of temporary agencies she called Minorities in the Temporary Industry (MITTI). Using MITTI, Blair was able to handle large corporate jobs by subcontracting work to other firms in the group.

But today, Blair and her company are engulfed in controversy. Blair Temporaries and Staffing has filed for Chapter 11 bankruptcy protection from more than 300 creditors -- mostly individuals who worked as temporaries -- while it attempts to reorganize. Bell Atlantic and other clients have canceled contracts. Blair is searching for ways to hold her business and personal finances together.

Before her current financial troubles, companies such as Bell South and Bell Atlantic were wooed by Blair's can-do attitude and the allure of the public relations benefit they would get from working with so many minority firms.

"They were so proud of that contract," said Bell Atlantic spokesman Jim Smith, who added that a company news release trumpeted its award from the National Minority Business Council. Although the announcement highlighted several Bell Atlantic contracts with minority-owned companies, in effect "that news release said, `Yahoo, we got Blair,' " Smith said.

But Smith said the relationship ended prematurely. "Blair's own developing financial problems ended up causing some concern at Bell Atlantic."

But Blair blames Bell Atlantic for causing most of her difficulties. She blames the telecommunications company for holding up payments on invoices, thereby plugging up her cash flow -- allegations Bell Atlantic denies.

"We are categorically denying that we are responsible for Shirley Blair's financial difficulties and bankruptcy [reorganization]," said Bell Atlantic's Smith.

Bell South also terminated a contract with Blair, but declined to comment further on its relationship with the company. The contract started in July 1998 and was terminated eight months later.

Blair also blames her financial predicament on her lender, Classical Financial Services in Washington, an alternative lender that typically serves companies unable to secure bank financing.

According to parties involved, the relationship with Classical, which began in the fall of 1997, worked like this: Blair's company would give Classical all of the timecards from its temporaries. Classical would then invoice Blair Temporaries' clients. In the meantime, Classical had an agreement to forward Blair 90 percent of the value of the invoice. Then, when the client paid, the money was to go directly to Classical or to a Classical trustee. In essence, the arrangement is similar to a revolving line of credit.

Blair asserts that Classical did not give her the full amount that her contract stipulated. Classical claims Blair had clients send their payments directly to her and then diverted the money into her personal and corporate accounts, according to a civil suit filed by Classical in Montgomery County Circuit Court last October against Blair.

Classical took Blair to court to stop her from what the company alleged was a diverting of "cash collateral," and it asked the judge to appoint a receiver to manage Blair's funds. The court did so. But Blair and Classical later agreed that Blair would repay the money without the assistance of a receiver.

However, that plan was superseded three months ago when Blair filed for personal and corporate bankruptcy. Now the fight between Classical, Blair and at least one client (Bell Atlantic) has landed in bankruptcy court. And the fight is ugly.

"They were determined to keep us held hostage," Blair said of her relationship with Classical. She said she attempted to get out of her contract by having another funding company buy it out, but Classical would not release her. A spokesman for Classical said if there had been such an offer, the company would have considered it.

Classical representative Henry Purchase said Blair's problems are her fault. Several people had told him about the fiery entrepreneur with the budding minority network. "I had met some other people who said this woman is on her way up," he said, adding that she has "disappointed so many people."

Purchase said Classical had asked Blair to bring in more experienced personnel to run her back office -- Blair Temporaries' administration and bookkeeping. Blair denies she had any financial problems before Classical, but acknowledges that she might not have had an efficient back-office operation.

In a deposition in November for the lawsuit brought by Classical, one former employee said there were problems getting money on time, to temporaries and to employees, although she did not say for how long. The woman said she was told the problem was due to Classical. However, she also said Blair did not have the "proper staff" to run her company smoothly.

Blair said that given another chance, she would not go to a company such as Classical. As for her management of back-office matters, she said, "The back office was really handled by the funding company. . . . To be honest, you relinquish control."

But she added later, "Our back office allowed them to take advantage." She also said it "was not as strong as it would have been if it was about crunching numbers and getting rich. . . . They're right, my back office wasn't tight, but it wasn't tight with Resource Funding Group [the company's previous lender] and we never missed a payroll."

Leslie Adler, associate general counsel of Resource Funding Group, would not comment on the Woodbury, N.Y., company's relationship with Blair. "The only thing I can confirm . . . is we did at one time fund her," Adler said.

As for the temps who worked for Blair, many feel abandoned. Erica Gordon, who was a Blair temp for Bell South in Atlanta, said Blair owes her about $1,800.

"When I first met her, I was actually just shocked," Gordon said. "This [was] a young black woman doing what she had to do and taking care of business."

Gordon, who has entrepreneurial aspirations of her own, said she had hoped to use Blair as a role model. Instead, she said, the whole situation "is depressing."

Blair said the experience has been the most traumatic of her life. She said she has seen several companies similar to hers go out of business because of alternative lenders such as Classical. In hindsight, she said, she would not have entered such an arrangement.

She added that her faith keeps her grounded, and that bad things happen to good companies. "I'm not going anywhere," she said.