Fire safety problem leads Creations Mfg. into bankruptcy
By Jeff Linville -- Furniture Today, June 2, 2003
Fresno, Calif. — Case goods manufacturer Creations Mfg. filed for Chapter 7 bankruptcy on May 23, after its factory here was shut down by the fire department.
Attorney David Jenkins filed the bankruptcy petition two weeks after the Fresno Fire Department informed the company in a written notice, "Due to hazardous conditions observed at the site, this bureau has no option but to require that you immediately discontinue use of all flammable spray and finishing operations at this location."
The notice from Clint Nichols, Fresno acting fire marshal, said the current building would have to be modified, or that approved spray booths and approved flammable liquid storage would have to be added.
In a notice sent to retailers, attorney Jenkins said this effectively shut down the finishing abilities of Creations Mfg., which specialized in traditional oak furniture.
"We have explored all options including lawsuits, switching to water-based finishes, and moving to a new building, all of which would require several months to complete and also not be cost-effective," he said.
He added that all of the company's senior management resigned before he filed the bankruptcy petition.
According to the bankruptcy filing, the company owes about $3.27 million in unsecured, nonpriority claims and $232,000 in taxes ($13,000 to Fresno County and $219,000 to the Internal Revenue Service). It estimates the value of its property, building equipment and accounts receivable at $2.8 million.
Eight companies have unsecured claims of more than $100,000, including $323,700 to Aura Hardwood Lumber, $416,000 to National Wood Products, $611,400 to Orepac Lumber and $640,400 to Redwing Glass Craft.
Creations Mfg. had market showrooms in High Point's Center Point building and in the San Francisco Mart, and owes the owners of those buildings $4,900 and $14,000 respectively.
