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Structurlam files Ch. 11, to sell-off Arkansas and B.C. assets

[Apr 25, 2023]

PENTICTON, B.C., Canada — Structurlam Mass Timber Corporation, the leading mass timber manufacturer in North America, has entered into a stalking horse asset purchase agreement (APA) with Mercer International Inc. to sell substantially all the Company's assets in British Columbia and Arkansas for $60 million.

Structurlam opened the $90 million, 288,000-SF facility in Conway in 2021 after the company secured a production deal with Walmart to provide 1.7 million cubic feet of mass timber for the retailer’s new corporate headquarters in Bentonville.

Production issues caused Walmart to cancel its contract in January, and Structurlam laid off 144 of its 168 Conway employees. Walmart said it would "continue to seek alternate sources of mass timber for the project" and would use "as much material from our home state of Arkansas as feasible."

Structurlam listed Walmart as having a $34 million unsecured claim against it, according to the company’s Chapter 11 bankruptcy filed Friday in the U.S. Bankruptcy Court for the District of Delaware. Structurlam listed the claim as contingent, unliquidated and disputed, according to the filing.

Walmart’s claim is the largest unsecured claim against Structurlam, which estimated its liabilities as between $100 million and $500 million. Its assets were estimated to be in the same range.

In conjunction with the APA, the Company has voluntarily filed petition for relief under Chapter 11 of the U.S. code. Recognition of the Chapter 11 proceedings will be sought in the Supreme Court of British Columbia shortly thereafter.

The APA is subject to higher and better offers as part of a court monitored auction process. In addition, the company secured a C$7.5 million debtor-in-possession ("DIP") facility from the Bank of Montreal to fund its operations throughout the court process.

"I am delighted and grateful for Mercer's vote of confidence in Structurlam and in its leadership in the mass timber industry. It is especially rewarding given the difficult period the company has had since suspending its operations in Arkansas mid-January, and it will help in normalizing the plant operations going forward," said Matthew Karmel, CEO of Structurlam Mass Timber Corporation.

Source: arkansasbusiness.com