National Home Centers Inc., the No. 26 dealer on this year's ProSales 100 listing, filed for Chapter 11 bankruptcy on Dec. 9, citing problems with its lender, which itself is emerging from Chapter 11.
According to a report by ArkansasBusiness.com, the Springdale, Ark.-based dealer sought protection from creditors under Chapter 11 because it failed to reach an agreement CIT Group Inc., a financial services firm that specializes in serving small businesses.
"We could not reach a resolve," CEO and company founder Dwain Newman told the publication. "It's certainly the company's last choice. It is our mission in life to pay our creditors but we're frozen [for the time being]."
CIT Group filed for Chapter 11 last month. It announced Tuesday that a federal bankruptcy judge had approved its reorganization plan and that the company planned to leave Chapter 11 status today, Dec. 17.
National Home Centers listed both its assets and liabilities between $10 million and $50 million, with between 200 and 1,000 creditors, according to the report. The company had sales of $145 million in 2008, down 24% from sales of $191 million in 2007. It had eight retail centers and two flooring centers in Arkansas, employing just over 500 people.
In an interview with ProSales last spring, executive vice president and CFO Brent Hanby said the dealer had cut more than 200 positions at the company in 2008 and closed its smallest location in Hebrew Springs, Ark. Last month the company closed a location in Chenal Park.
The company has yet to file required documents listing its financial status and reorganization plans. Those had been due on Dec. 22, but National Home Centers won permission today to delay those filings until Jan. 15. It has filed a report that indicates it owes its 20 largest unsecured creditors $5.1 million. Top creditors include Guardian, Boise, BlueLinx, Orgill, Krestmark, and Weather Shield. The creditors' meeting is set for Jan. 29.
U.S. Bankruptcy Judge Bea Berry, based in Fayetteville, Ark., already has approved several routine motions permitting National Home Centers to keep its utility service and pay taxes while in Chapter 11. Berry will hear more routine, "first day" motions at a hearing scheduled for Friday, Dec. 18.