Iowa-based broom and brush manufacturing company Harper Brush Works, Inc. announced on Thursday that it filed for Chapter 11 bankruptcy this past Tuesday due to a great loss of customers and profit in 2012.
The company, which opened 112 years ago, according to a press release they issued on Thursday, noted that had originally added production capacity to meet the customers' growing needs, but had loss a large margin of clientele two years prior. That, added with the debt of the expansion of the company, it found itself experiencing financial turmoil, and thus filed for bankruptcy.
Through Chapter 11 bankruptcy, Harper Brush Works will, stated the press release, have a chance to restructure its system and operate in a way to cater to the needs of its customers and employees. The claim was filed at the United States Bankruptcy Court for the Southern Distract of Iowa. Currently, the company employs 70 full-time and 5-10 staffers, as well as contract laborers at their headquarters in Fairfield, Iowa, and has no plans to lay off any workers.
"After careful consideration of our options, the board of directors and the senior management team believe that Chapter 11 is a necessary step to create a solid foundation for the future growth and success of Harper Brush Works," Marc Ross, Chief Restructuring Officer stated for the press release.
Harper Brush, according to the press release, will negotiate a new line of credit to provide funds for its capital, as part of the restructuring process it is currently undertaking. Financially, this will include arranging new long-term investment opportunities, though no specifics are mentioned. Harper Brush will also restructure its balance sheets for the company, whose assets and liabilities, according to the Chapter 11 filing, comes up to around $10 million. The corporation also proposes to maximize revenue stream from its best-selling products and eliminating those that did not perform well financially.
"We will continue to manufacture quality products which our customers have come to expect from us during our 112-year history. Our success as a company is largely due to the hard work and dedication of our highly skilled labor force and the great customer relationships we have built over our history," Ross further commented for the press release. "This step is being taken in order to ensure that our company is able to effectively serve those loyal customers for the next 112 years."
