Building Materials Holding Corporation received interim authorization from U.S. Bankruptcy Court today in Wilmington, Del. to continue its present operations.
On June 16, BMHC began reorganization proceedings under Chapter 11 of the U.S. Bankruptcy Code.
Following the court order, the Boise, Idaho dealer and construction services provider can continue to meet its obligations to customers, including the fulfillment of contracts and honoring warranties, while meeting its obligations to suppliers, employees, and subcontractors.
At Wednesday's hearing, the court granted initial approval for BMHC to access a new $80 million in debtor-in-possession financing facility from Wells Fargo Bank and other lenders. BMHC has been permitted by the court to use $40 million of the credit facility immediately, with the full $80 million available upon final court approval.
In a statement issued by BMHC, the company said that it expects the new financing to "provide ample liquidity to meet its ongoing obligations to employees, customers, and suppliers during the reorganization process." Altogether, BMHC expects the reorganization process to take about three to four months.
"All of our operations are open, and we are continuing to serve our customers with the same focus and dedication as always," Robert Mellor, BMHC chairman and CEO, said in the company's statement.
"We appreciate the support we have seen from both our customers and suppliers as we move forward with this process to make BMHC financially stronger for the long term," he added.
According to BMHC's reorganization plan, the dealer will maintain normal operations and continue to pay employee wages and benefits in the usual manner. In addition, the company expects to pay in full suppliers of goods provided in 20 days prior to filing and those with claims of under $5,000, BMHC said.
A July 1 hearing has been set in U.S. Bankruptcy Court where BMHC will seek final approval for its interim financing plan.
In this year's ProSales 100, BMHC posted the largest sales decline in 2008 of any dealer on the list: down nearly 41% to $1.3 billion. The dealer is the sixth-largest U.S. LBM dealer but slashed about 5,800 jobs last year, about a third of its total workforce.