Region's largest dry cleaner seeks bankruptcy protection

PHOTOGRAPHER: James Schlett

Upstate’s New York’s largest dry cleaning chain is seeking bankruptcy protection six months after the company embarked on a quarter-million-dollar campaign to become a more environmentally-friendly company.

Greener Cleaners – formerly KEM Cleaners – filed today for Chapter 11 reorganization in U.S. Bankruptcy Court. The Schenectady-based chain cited $1.15 million in liabilities and $647,276 in assets.

The 57-year-old chain attempted to reinvent itself last spring by investing $250,000 in R.R. Street & Co.’s Solvair cleaning system, which cleans clothes with biodegradable cleaning fluid and dries them with liquid carbon dioxide, instead of heat.

The installment of that equipment at the chain’s State Street headquarters prompted its name change from KEM Cleaners to Green Cleaners. The chain leases space for its 14 retail outlets and headquarters.

Greener was the sixth dry cleaner in the nation to use R.R. Street’s cleaning system. The chain hoped it would boost business by attracting environmentally-conscious consumers.

At the time of the moniker change in June, Greener employed 75 companywide, including 35 at its main facility. Clothes dropped off at all of Greener’s retail outlets are cleaned at its Schenectady headquarters.

The bankruptcy case’s largest secured creditor is KeyBank National Association, which has a $300,000 claim.

David Siegal, Greener’s co-owner, who holds 50 percent of its stock, is the case’s largest unsecured creditor. He has a $522,800 claim, which includes a $250,000 loan for the Solvair system. Benson Seidman Living Trust, the San Diego firm that holds the rest of Greener’s stock, has a $98,200 unsecured claim.

Greener reported in its bankruptcy petition operating losses of $509,200 for last year and $160,200 for 2006.

The chain last year closed its Erie Boulevard and Upper Union Street stores in one of several consolidation efforts Greener pursued, including placing all of its dry cleaning operations in a centralized location in Schenectady. In 1998, the chain relocated its headquarters from Guilderland to the former King Cadillac building on State Street.

It is not clear how Greener plans to reorganize. Company attorney Christian Dribusch did not immediately return a call.