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HBS Professor Thomas R. Piper and writer Jeffrey DeVolder prepared this case solely as a basis for cla ss discussion and not as an endorsement, a source of primary data, or an illustration of effective or ine ffective management. The authors thank John A. Schweig of W. W.
Grainger, Inc.
(HBS MBA 1983), and Mary A. Noonan of Arrow Electronics (HBS
MBA 1990), for their valuable contributions to the development of this case.
This case, though based on real events, is fictionalized, and any resemblance to actual persons or entities is coincidental. T here are occasional references to actual companies in the narration.
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THOMAS R. PIPER
JEFFREY DEVOLDER
Jones Electrical Distribution
After several years of rapid growth, in the spring of 2007 Jones Electrical
Distribution anticipated a further substantial increase in sales. Despite g ood profits, the company had experienced a shortage of cash and had found it necessary to increase its borrowing from Metropolitan Bank—a local one- branch bank—to $250,000 in 2006. The maximum loan that Metropolitan would make to any one borrower was