Suppliers Seeking B.P. John Liquidation
Three suppliers of B.P. John Furniture Co., which employs 258 people in Santa Ana, have asked a federal bankruptcy court judge to liquidate the company because it owes them more than $100,000.
The suppliers said Wednesday that they filed the involuntary bankruptcy petition because they feared that the proposed sale of the 99-year-old furniture maker and distributor would make it more difficult to obtain payment of their bills.
“The company apparently is underwater,” said Robert Dewberry, an attorney for the creditors. “Most companies don’t stop paying their bills without a reason.”
Miles Stover, vice president of operations for B.P. John, said the company would fight the bankruptcy action. He said that sales of the company have declined in the past year and that the firm has also been hurt taking a charge for damaged furniture.
The company, a wholly owned subsidiary of Pasotex Inc. of El Paso, Tex., specializes in making water beds, as well as wooden tables, dining room sets and bedroom suites. Stover said the legal action could imperil a deal to sell the company to an unnamed buyer.
Two of the three creditors who filed the petition to liquidate in federal bankruptcy court on Oct. 25 in Santa Ana had sued B.P. John in Superior Court in May as well. Webb Massey Co., an Orange wood products manufacturer, sued for $49,794 in payments due, and International Forest Product Inc., a wholesale lumber distributor in Chino, sued for $56,063.
B.P. John offered a payment schedule, but it was unacceptable to the creditors. The company offered to pay 10% above the value on future orders to International Forest until the debt was paid off. To Webb Massey, the company offered a similar deal for $20,000 worth of the debt, and it offered to return $30,000 worth of water bed frames.
“It was a ridiculous offer,” said Jeanne Massey of Webb Massey. “The frames are a special B.P. John color; nobody else buys them.”
An involuntary bankruptcy petition to liquidate must be signed by at least three creditors, so Abrasive Belt Cleaner of Elsinore, which has only $126 in outstanding bills to B.P. John, agreed to join in, Dewberry said.
He said creditors became nervous that B.P. John would soon be going out of business when the company announced a warehouse liquidation sale last June. Stover said the sale was to dispose of $1 million in furniture with cracked paint.
