Wheeler’s declares Chapter 11
Wheeler’s Building Materials, one of the Southeast’s fastest growing LBM chains until the housing downturn, has filed a voluntary petition for Chapter 11 bankruptcy protection in the Northern District of Georgia federal court. The company is seeking relief from its lenders in order to continue operating its remaining truss plant, door shop and five lumberyards.
The Atlanta-based pro dealer listed assets of less than $10 million and debts that total approximately $20 million. Its largest creditor, BlueLinx, is owed $957,474, according to papers filed in U.S. Bankruptcy Court. Other top creditors listed include Guardian Building Products, Boise Cascade, Wachovia/Great Southern Wood Products, U.S. Lumber Group and Moulding & Millwork.
According to the Chapter 11 petition, “The collapse of the residential real property building industry 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.
Wheeler’s ranked 27th on Home Channel News Top 350 Pro Dealers list, with sales of $250 million in 2006.
Wheeler’s opened in Rome, Ga., in 1949. Second-generation owners Mark and Jim Manis, who served as CEO and president, respectively, led the company through an expansion phase in 2005 and 2006, growing the chain to 17 locations in Georgia; Charlotte, N.C.; and Birmingham, Ala.
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.