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Bison Building Materials Ltd., Houston, TX, has filed for Chapter 11 Bankruptcy protection. The regional building materials supplier is the latest company to file for federal protection as a result of the struggling residential construction market in the U.S., following Stock Building Supply, ORCO Construction Supply, and Building Materials Holding Corp. which have filed within the last two months.
At its peak, Bison had about 1,350 employees with locations in six states; as of June 1, the company employed 556 people and had closed all operations outside of Texas. Sales have declined nearly 40% since 2006, to $179.1 million for fiscal year 2009 ended April 30.
A combination of real estate lease obligations and a tight credit market led to the decision to file for bankruptcy, said Pat W. Bierschwale, president of Bison Building Holdings, in a statement filed with the U.S. Bankruptcy Court for the Southern District of Texas. Since most of the Debtors' discontinued operations are in markets such as Las Vegas and Phoenix, some of the most toxic real estate markets in the U.S., the Debtors' efforts to sublease or otherwise mitigate damages of landlords have been largely unsuccessful.
"Management decided it was not possible to continue to pay lease rentals attributable to the discontinued operations."
Additionally, revolving credit holders had advised the company that they would be reducing the advance rate on Bison's credit facilities, limiting the company's liquidity.
Bison Building Materials intends to continue operations during the reorganization and prevent further headcount reductions.