SecProbe.io

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<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.txt
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June 8, 2005
By Edgar "CORRESP"

Ms. Meagan Caldwell
United States Securities and Exchange Commission
Washington, D. C. 20549-0303

Re: COLONIAL COMMERCIAL CORP. ("COMPANY") 2004 FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 2004

Dear Ms. Caldwell:

Thank you for your letter of May 26, 2005. At your request, we are responding to
each of your points with this supplemental letter. We are keying our responses
to your comments.

     1.   We acknowledge your first comment and will include the revisions
          referred to later in this letter in our future filings.

     2.   In your Comment 2 you ask us to include estimated interest
          payments on our debt in our contractual obligation table and further
          ask us to disclose any assumptions made to derive these amounts.

               a.   Contractual Obligations will be presented as follows:

               Contractual Obligations:
               ------------------------

               The following table represents certain contractual commitments
               associated with operating agreements, obligations to financial
               institutions and other long-term debt obligations as of December
               31, 2004:

<TABLE>
<CAPTION>
                                               Payment Due by Period (in thousands)
                                      -----------------------------------------------------
                                               Less than                             Over
                                       Total     1 Year    1-3 Years   4-5 Years   5 Years
                                      -----------------------------------------------------
<S>                                   <C>      <C>         <C>         <C>         <C>
Operating leases                      $12,055  $    2,720  $    6,808  $    1,321  $  1,206
Compensation agreements                 1,835         680       1,155           -         -
Notes payable                           1,514         115       1,131         268         -
Notes payable interest                    444         126         306          12         -
Line of credit                         12,325      12,325           -           -         -
Line of credit interest                   747         747           -           -         -
                                      -------  ----------  ----------  ----------  --------
Totals                                $28,920  $   16,713  $    9,400  $    1,601  $  1,206
                                      =======  ==========  ==========  ==========  ========
</TABLE>

               Notes payable carry a fixed interest percentage rate per annum,
               with the exception of a $750,000 note that accrues interest at
               the prime rate. "Notes payable interest" in the table assumes an
               average annual prime rate of 6.25%. The prime rate as of December
               31, 2004 was 5.25%. See Note 6, Notes Payable, of the Financial
               Statements for the terms of these notes.

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               "Line of credit" in the table is shown as a less than one year
               obligation because the lending bank may demand payment at any
               time. The line of credit consists of a revolving credit line that
               bears interest at .25% below prime and a term loan that bears
               interest at .50% above prime. "Line of credit interest" in the
               table assumes that the principal amount outstanding on the line
               is paid in full on December 31, 2005, that the principal amount
               to be repaid on that date will be $12,325,000 (which is the
               principal amount that was outstanding on December 31, 2004), and
               assumes that the average prime rate will be 6.25% in 2005. The
               prime rate was 5.25% as of December 31, 2004. See Note 5,
               Financing Arrangements, of the Financial Statements for the terms
               of the line of credit.

     3.   In your Comment 3 you request that we expand our disclosure
          regarding inventory shipments to include whether we include in our
          "cost of sales" line item the following: inbound freight charges,
          purchasing and receiving costs, inspection costs, warehousing costs,
          internal transfer costs and the other costs of our distribution
          network. You also request that, if we currently exclude a portion of
          these costs from cost of sales, we note that our gross margins are not
          comparable to those of other entities that include these costs in cost
          of sales.

               a.   We will disclose that our "cost of sales" line item
                    excludes incoming freight, purchasing, receiving,
                    inspection, warehousing and handling costs, and that we
                    include these costs in our selling, general and
                    administrative expenses. We will also indicate that our
                    gross margins may differ from others in this or similar
                    industries that do include these items in their costs of
                    sales line item.

     4.   In your Comment 4 you note that our counsel has advised us that
          they are not aware of any material pending or threatened litigation,
          claims or assessments, except for one matter of which any verdict or
          settlement will be covered by insurance. You ask us to describe how
          the nature of this claim, including the differences that would cause
          us to be liable, differs from the other claims and potential claims.
          You also ask us to describe the amount or range of amounts relating to
          this claim.

               a.   The matter referred to in your letter is a lawsuit
                    (captioned Rhodes v. A.O. Smith Corporation, et al., filed
                    on or about April 26, 2004 in the Superior Court of New
                    Jersey, Law Division, Middlesex County, Docket Number
                    MID-L-2979-04AS) in which plaintiff claims to have
                    contracted mesothelioma as a result of his occupational
                    exposure to asbestos dust and fibers. Counsel expects that
                    trial of this lawsuit would result in an adverse verdict and
                    estimates that the total adverse verdict for all defendants
                    could range between $500,000 and $2,500,000. Any such
                    verdict would be covered by insurance. The lawsuit differs
                    from other lawsuits in that plaintiff has established the
                    nature of his disease and that a predecessor of the Company
                    was a major supplier of the asbestos containing products
                    that he alleges caused his disease. The Company is a
                    defendant in this lawsuit, as well as other asbestos related
                    lawsuits, solely because the Company purchased the assets
                    and the name of the predecessor of the Company. All of these
                    claims relate to alleged sales of asbestos products, or
                    products containing asbestos, by the Company's predecessor.
                    The Company never sold any asbestos related products.
                    Furthermore, because the Company never sold asbestos
                    products nor products containing asbestos, and because of
                    our indemnification agreements as well as insurance coverage
                    referred to in our initial letter, the matter is not
                    material to our Company and is set out as a matter of
                    disclosure only.

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     5.   In your Comment 5 you request certain information relating to
          asbestos-related claims.

               a.   We do not have probable product liabilities related to
                    asbestos related claims because of indemnification
                    agreements, and insurance coverage, and because we never
                    sold asbestos products nor products containing asbestos.
                    Accordingly, we have made no accruals or reserves for
                    asbestos claims or settlements and have not recorded any
                    expense for these claims and settlements.

               b.   All claims and legal defenses have been handled by
                    insurers. Our insurers have not provided the roll-forward
                    and settlement information that you request.

                                        Sincerely,

                                        /s/Bernard Korn
                                        ---------------
                                        Bernard Korn
                                        Chief Executive Officer

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