Bison Building Materials, America's 14th-biggest LBM operation, asked a bankruptcy judge Tuesday to let it extend its debtor-in-possession (DIP) financing facility by one month to Jan. 29. Meanwhile, the Houston-based dealer is reaching compromises with several of its major vendors that will end hundreds of thousands of dollars worth of claims against it.
U.S. Bankruptcy Judge Wesley W. Steen is scheduled to conduct a hearing Dec. 14 on Bison's request to extend the DIP financing, which Bison says is vital to its ability to continue operating. The DIP credit facility with Wachovia Bank had been scheduled to expire on Dec. 25. For a $10,000 fee, this credit facility would last until Jan. 29. Terms of the DIP facility haven't been disclosed, but as of March, Bison had a $30 million revolver facility from Wachovia to which it owed $14.6 million as of June 25.
Bison, the No. 14 company on the 2009 ProSales 100, filed for Chapter 11 protection from creditors on June 28. It recorded a loss of $16.1 million in $214 million in revenue during the fiscal year ended last April 30. Between June 28 and Oct. 31, it has posted another $2.4 million worth of net losses.
In court filings, Bison said its problems came after it began to expand along the Interstate 35 corridor in 2005 and then into Nevada, Arizona, Colorado, Ohio and New Mexico. When the housing downturn occurred, Bison retrenched to its core Texas business in metro Houston.
Bison's recent Chapter 11 filings contain a number of recent submissions that suggest the company is seeking to settle vendors' payment concerns, but not always by paying 100% of what was due. On Tuesday, for instance, Steen issued an order approving compromise settlements with Crest Metal Doors and with Steves and Sons Inc. Under the agreements, Crest was allowed a general unsecured claim against Bison totaling $137,585,80 and an administrative claim worth $40,631.50, while Steves was allowed a general unsecured claim of $412,242.41 and an administrative claim of $316,055.25. Together, that's $549,828.24 worth of unsecured claims.
However, the order notes that when the remaining unpaid principal on the unsecured claims falls to $250,000, "the Settling Parties shall issue a credit satisfying such claims in full," in effect wiping out close to half of the unsecured claims part of Bison's debt to Crest and Steves.
Meanwhile, Bison has proposed the bankruptcy court approve another compromise, this time with The Buying Source LLC.
According to a Bison filing, on June 11 the company executed a $1.2 million promissory note to Buying Source in which it gave a deed of trust to Bison property in Pearland, Texas. The promissory note gives Buying Source a security interest in that land, and in return Buying Source kept providing Bison with goods and services and credit terms.
Under the compromise agreement proposed to the Steen, Bison will give title to the Pearland property--which it believes is worth $400,000 to $700,000--in exchange for full and final satisfaction of Buying Source's $1.2 million claim.
Steen is scheduled to hear a proposal on this plan on Jan. 25 in U.S. Bankruptcy Court in Houston.