TFI Building Materials Files Bankruptcy Papers
In yet another sign that the building industry remains deep in recession, a regional building materials company with more than 300 employees has filed for bankruptcy reorganization in the face of plummeting sales.
TFI Building Materials Inc. of Anaheim sought protection from creditors’ claims under Chapter 11 of the federal bankruptcy code in a petition filed last week in U.S. Bankruptcy Court in Santa Ana.
The privately held corporation is a holding company for a string of wholesale electrical, plumbing, appliance and hardware supply businesses that operate under several names in California, Nevada, Utah and Washington.
Company officials could not be reached Thursday for comment.
But Newport Beach attorney Marc Winthrop, who is representing TFI in the bankruptcy, said the company has more than $10 million in debt and more than $10 million in assets. Exact totals have not yet been tallied, he said.
Winthrop said the bankruptcy is rooted “directly in the decline in the building industry.”
TFI sells supplies to builders “and the market is not doing well enough to give the company very many customers. If they aren’t building houses, it is hard to sell toilets and ovens and lighting fixtures.”
Winthrop called the case “a classic Chapter 11. We are operating with the use of cash from the company’s lender, Midlantic National Bank, and are seeking a court ruling on our petition to allow Midlantic to extend additional credit.”
TFI currently owes the New Jersey-based bank “between $7.1 million and $7.2 million,” according to the attorney, who said Midlantic is supporting the company’s request to borrow additional working capital in the wake of its bankruptcy financing.
In addition to the debt to Midlantic, TFI said it owed a total of $3.9 million to its 20 largest unsecured creditors, including $1 million to GE Credit Corp.
In its bankruptcy filing, the company said it operates TFI Hollywood Appliance Supply, with offices in Santa Ana, West Hollywood, Chino, Palm Desert, San Bernardino and El Cajon; Ward Manufacturing & Supply, in the City of Industry and in Las Vegas; Rio Grande Appliance Supply, in Salt Lake City and Park City, Utah; Rio Grande Building Products in Salt Lake City; Brennan Commercial, in Kirkland, Wash., and California/Coast Wholesale Electric, in Montclair, Escondido and San Diego.
Winthrop said that the company will close some of its divisions and consolidate sales offices but that only a few layoffs will result.
“This is a distribution and sales business. They don’t make things, so there aren’t that many people in any one office” to be affected by a closure, Winthrop said.
Winthrop said he was was unable to identify which offices would be shut down.