Structurlam files for bankruptcy with plans to sell company; owes Walmart $34M
Structurlam Mass Timber Corp., a Canadian mass timber manufacturer with holdings in Arkansas, announced Monday (April 24) plans to sell the company and file for Chapter 11 bankruptcy.
According to Monday’s news release, Structurlam has entered into a stalking horse asset purchase agreement (APA) with Mercer International to sell its assets for $60 million.
“I am delighted and grateful for Mercer’s vote of confidence in Structurlam and in its leadership in the mass timber industry,” Structurlam CEO Matthew Karmel said. “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.”
In January, the company suspended operations at its 288,000-square-foot Arkansas plant in Conway due to a customer contract cancellation with Bentonville-based Walmart Inc. The company did not initially name the customer that canceled a contract when announcing the plant closure. In response to a question from Talk Business & Politics, a spokesman confirmed that Walmart canceled the lucrative contract.
However, a Walmart spokeswoman said Structurlam’s claim that the retailer was responsible for the partnership ending “would not be accurate” and offered the following statement.
“Walmart was informed today by Structurlam’s CEO that they suspended operations of their mass timber factory in Conway, AR. While this is a disappointing outcome that impacts many parties, we are proud of the significant financial and operational support Walmart has provided Structurlam since 2019. Walmart remains excited about using mass timber on our new Home Office campus and will continue to seek alternate sources of mass timber for the project. We will use as much material from our home state of Arkansas as feasible.”
Structurlam filed the voluntary reorganization plan on April 21 in Delaware. The company listed between $100 million and $500 million in assets and the same range in liabilities.
According to the filing, the company’s largest unsecured claim is to Walmart ($34 million).
In December 2019, Structurlam announced a $90 million investment in the Conway facility primarily to support one project — the construction of the new Walmart corporate campus in Bentonville, first announced in 2017.
Officials with Structurlam, based in Penticton, British Columbia, Canada, made the announcement with Gov. Asa Hutchinson and Dan Bartlett, executive vice president of Walmart Corporate Affairs. The new facility was expected to create 130 jobs in a facility once operated by Nucor.
“We are excited about the technology and the additional opportunities for growth Structurlam brings with it to Arkansas,” Hutchinson said at the time. “The company’s partnership with Walmart is an example of how this expansion will benefit our state’s timber industry.”
The world’s largest retailer had planned to use more than 1.1 million cubic feet of Arkansas-grown and Arkansas-produced mass timber in its new home office campus in Bentonville, making it the largest campus project in the U.S. using mass timber.
“Structurlam is uniquely positioned to deliver its innovative approach to digital design collaboration and mass timber manufacturing to Walmart and the State of Arkansas,” Bartlett said during the December 2019 news conference. “With their help, we are able to realize our goal of connecting our associates with nature and the beauty of Arkansas through our new Home Office project.”
Karmel has headed up the company for about a year. Hardy Wentzel, the previous CEO, told the Northwest Arkansas Business Journal in 2020 that the new Walmart corporate campus is far and away the largest project Structurlam has supplied.
According to Structurlam, an economic benefit of mass timber is the ability to design, model and prefabricate the structural elements of a project offsite, accelerating on-site production schedules by up to 25% compared to traditional on-site building with steel and concrete.