Furniture maker files for bankruptcy

By DEVONA WALKER
MANATEE COUNTY — Facing mounting debts, vicious overseas competition and a downturn


in the residential housing market, one of Southwest Florida’s largest manufacturers appears to have melted down.
With debts of nearly $5 million, CFI Manufacturing-Carter Grandle Furniture last week filed for Chapter 11 bankruptcy protection from its creditors.
It has shed all but eight of its more than 100 workers, though a skeletal sales staff continues to push its inventory of aluminium outdoor and patio goods from its headquarters and plant in the industrial area sandwiched between Manatee and Sarasota counties.
Carter Grandle faces an early May reorganization deadline.
Owner Webb Carter said bankruptcy protection gives him time to think about his future.
“I don’t know if we will open back up. I don’t know if we will open back up in Florida anyway. It’s getting too tough in Florida, with high insurance and labor cost. It’s too tough in Florida on manufacturing,” Carter said.
“I really don’t even know if I have any desire to open back up.”
The furniture-making business has been a bloodbath for a decade, with furniture makers in Michigan and the Carolinas shedding hundreds of thousands of workers. Domestic companies face growing competition from from overseas companies, particularly in China, that offer comparable furniture at cheaper prices.
The last year, the already embattled industry was hit by the precipitous slowdown in new home construction, a key source of demand.
“It is usually the first to be impacted after a housing industry slowdown, and that’s one of the triggering factors in this case,” said Benjamin Martin, the bankruptcy attorney for Carter Grandle.
But there were others, Martin said.
Four of the company’s primary customers filed for bankruptcy inside of a year.
Then in November, Carter Grandle’s primary creditor LaSalle Bank — owed $1.2 million — forced the company’s hand.
“One secured creditor forced the filing,” Martin said.
In a prepared statement, Webb Carter said Carter Grandle “anticipates resuming operations, preserving the jobs of its domestic and overseas employees, and emerging from bankruptcy.”
But in a phone interview on Tuesday with the Herald-Tribune, Carter seemed less sure about the future. He expects to file a lawsuit against LaSalle.
“We owed them $1 million, which is nothing compared to what we had owed them. In the spring, they asked us to come up with $2 million in equity. We came up with $4 million,” Carter said. “I filed Chapter 11 to get time to see what we wanted to do because every Monday the bank wanted to send someone down to start selling off our assets.”
Last year, Carter said Carter Grandle owed LaSalle Bank $20 million and had been working to whittle down the debt.
Officials with Chicago-based LaSalle, which bills itself as an “indirect subsidiary” of Dutch banking giant ABN AMRO Holding N.V., did not return calls seeking comment.
“We are seeking debtor-in-possession financing,” said Carter’s attorney Martin, meaning financing could come from another bank or outside investors. “It could be anybody willing to provide financing in terms acceptable to us.”
CFI might be a poster child for how fast things can change in the global economy.
Just last year economic development gurus in Manatee County were pointing to it as a prototype for type of industries they wanted to lure to Southwest Florida.
Carter re-emerged as chief executive after the company filed for bankruptcy protection. His son, Courtland Carter, had been running Carter Grandle.
On Oct. 15, Courtland Carter was allegedly caught smoking marijuana by the Tampa Police Department. When police officers approached him, the younger Carter struggled and tried to swallow the marijuana, police reports show.
One officer suffered a few minor scrapes and bruises, reports said.
Courtland Carter was charged with misdemeanor marijuana possession and resisting arrest and felony charges for resisting arrest and destroying evidence.
Three weeks later — on Nov. 10 — Carter Grandle closed its doors.
The two events were unrelated, Webb Carter said, adding that both he and his son are still actively involved in the business.
Carter Grandle owes more than 100 creditors, including 54 in South and Central Florida.
Orlando’s Eastern Metal Supply has the largest unsecured debt, at more than $500,000.
The major aluminum distributor has a diversified portfolio and has been so far relatively unscathed by the carnage in the Florida furniture industry.
“We are one of the major aluminum distributors to the furniture industry in Florida, or what’s left of it anyway,” said Eastern Metal General Manager Craig Lightle. “A lot of the manufacturing has gone to China. And now some of it is even going to Central America.”
Eastern Metal has been doing business with Carter Grandle for about 15 years.
Lightle said overseas competition and the drop-off in housing has hit furniture companies like Carter Grandle hard.
“They were a big company. They employed a lot of people. And we’re seeing more and more of that happening,” Lightle said. “With the Chinese vendors, it’s one of those situations where you either have to get on board or check to see if it’s an industry you want to stay in.
“If you’re in the patio furniture business, you have to find a better way to make it or go overseas.”
Eastern Metal still has about 10 to 12 accounts in Florida, many specialized and catering to hotels and cruise lines.
But a growing amount of its business has also gone overseas.
In early November or last October, Eastern Metal received a call from Webb Carter, Lightle recalled.
“He said they were trying to fire back up,” he said. “I guess they failed and the bank finally pulled the plug on them.”
As an unsecured creditor, Eastern Metal likely will not see much of the $500,000 owed to them, Lightle said.
“It’s pretty much gone. Once it gets to this stage, it doesn’t look very good. If we saw 10 cents on the dollar, we would be very lucky.”
Patio Etc. is another Southwest Florida company that was left in a pinch by Carter Grandle’s bankruptcy protection filing.
“This did put everybody behind the eight ball when it happened,” said Patio Etc. owner Sandy Stogner, who has stores in Sarasota and Osprey.
Stogner said she saw trouble and began canceling orders after Carter Grandle began waffling on orders in November.
“They just were being wishy washy and more wishy washy. I had placed a sizable order. I got part of it, not all of it. So I sent it back,” Stogner said. “I could have kept it and sold it for pennies on the dollar, but every inch of this store has to be money-making.”
Last year, Patio Etc. did more than $300,000 in business with Carter Grandle.
Stogner has since found alternative suppliers.
“We had gone with Carter Grandle for the last several years, because Carter Grandle was local. It was easier to go and pick up our orders,” she said.
“But there are other suppliers out there with very similar products.”
Last modified: January 17. 2017 5:40AM