Quantcast

Lincoln Logs seeks to reorganize in Chapter 11 bankruptcy action

CHESTERTOWN For more than three decades, Lincoln Logs has been a leading business in Chestertown and a pioneer nationally in designing and providing materials for log homes. Lincoln Logs Ltd. has been an industry leader that innovated efficient home construction materials and methods. But regardless of the companys storied history, apparently they are not immune from the reeling housing market. Earlier this month, suffering losses from the housing slump and battered economy, the Lincoln Logs filed for protection under federal Chapter 11 bankruptcy laws. In their court papers filed Sept. 16 in Albany, Lincoln Logs cited financial problems they attributed to the poor housing market and lack of timely payments from their customers, according to the Capital Region Business Review. Details of the bankruptcy action were detailed in their Sept. 26 issue. Lincoln Logs Chief Operating Officer wouldnt be answering questions about the bankruptcy filing, according to a receptionist answering the phone Monday. She referred calls to the companys bankruptcy attorney, Angela Miller of Phillips Lytle LLP in Buffalo. As of Tuesday, Miller had not returned phone calls or emails. Court papers indicate that Lincoln Logs has at least $10 million owed to at least 200 creditors, the Business Review reported. Assets were not specified. Court papers cite that Lincoln Logs owes First Pioneer Farm Credit about $2.6 million. The company has outstanding debt with a range of local firms, the Business Review reported, including owing $205,935 to Curtis Lumber Co. of Ballston Spa, $110,785 to R. Galusha Transport of Fort Edward, $146,136 to Holbrook Lumber Co. of Albany, and a total of $169,073 to two firms for legal and accounting work, according to the U.S. Bankruptcy Court documents. LaPell said in a court affidavit that the company has incurred operating losses after acquiring three businesses in 2003, the news report said. Plus, sales have dropped 36 percent since Spring 2006, the affidavit said. The court documents cite a sales backlog of $26.4 million, but customers have paid for only about 10 percent of these orders, LaPell stated in his affidavit, the report said. The company has 48 employees, primarily working at its Chestertown headquarters and in a sawmill it owns in Saratoga County. The Company also owns a model home off Rte. 9 at the southern entrance to Warrensburg. In a Chapter 11 bankruptcy proceeding, a company makes an effort to reorganize and continue operations, not close down permanently. The success rate of such actions is as high as 27 percent, according to U.S. Dept. of Justice data. On Sept. 22, a U.S. bankruptcy court judge agreed to allow Lincoln Logs to continue operations at least temporarily, until the next round of court hearings beginning Oct. 20, the Business Review reported. Since the acquisitions, Lincoln Logs management has cut $2.1 million in operating expenses, the news report said. These cost reductions, along with the firms pending sales orders, position it to recover quickly when the housing market rebounds, LaPell said in the court filing.

0
Vote on this Story by clicking on the Icon

Comments

Use the comment form below to begin a discussion about this content.

Sign in to comment