Atlanta-based Wheeler’s declares Chapter 11
Wheeler’s Building Materials, the Atlanta-based pro dealer, filed for Chapter 11 bankruptcy protection in federal court on Feb.11, citing “the collapse of the residential real property building industry.” The company is seeking relief from its lenders in order to continue operating its remaining truss plant, door shop and five lumberyards.
The family owned business, until recently one of the Southeast’s largest LBM chains, listed assets of less than $10 million and debts that total approximately $20 million in its court filings. Among its largest creditors are BlueLinx ($957,474); Dairyman’s Supply Co. ($933, 874); Guardian Building Products ($837,738); Boise Cascade ($758,541); and Wachovia/Great Southern Wood ($619,493).
Wheeler’s ranked 27th on the Home Channel News Top 350 Pro Dealers list, with sales of $250 million in 2006.
Founded in 1949, Wheeler’s went through an expansion phase from 2005 to early 2007, growing to 17 locations in Georgia; Charlotte, N.C.; and Birmingham, Ala. The company was taken over by second-generation owners Mark and Jim Manis, who held the positions of CEO and president.
According to the Chapter 11 petition, the sudden drop-off in housing starts “has resulted in the situation where sales have dropped precipitously and receivables have been rendered uncollectable.” In October 2007, Wheeler’s began cutting payroll and expenses, reducing inventory and consolidating locations, the motion states. The company’s headcount was reduced from 1,000 to 450 last year, according to press reports. In January 2008, Wheeler’s laid off another 264 people.
The Manis brothers have both resigned as officers and directors of Wheeler’s, according to the bankruptcy court filing. Paul Diamond has been named as the new company president.
Messages for Mark Manis seeking comment were not returned. But shortly after the bankruptcy filing, Manis told the Rome, Ga., News Tribune that Wheeler’s in tends to survive the down turn. “Filing bankruptcy gives us time to get caught up with our creditors, and for some clients to get caught up with us,” Manis told the news paper. “It’s a last option for any business, but that’s what it’s there for.”