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Structurlam Files for Bankruptcy Protection, Agrees to $60M Sale

2 min read

Canada-based timber manufacturer Structurlam Mass Timber Corp., which suspended operations at its Conway plant in January, announced it has filed for Chapter 11 bankruptcy protection and agreed to a $60 million sale of the company.

The agreement with Mercer International Inc. of Vancouver is known as a stalking horse asset purchase agreement. One of Mercer’s subsidiaries, Mercer Mass Timber, is based in Spokane, Washington, and said it has the largest production facility in North America.

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.

The purchase agreement with publicly traded Mercer (Nasdaq: MERC) is subject to higher and better offers as part of a court monitored auction process.

“I am delighted and grateful for Mercer’s vote of confidence in Structurlam and in its leadership in the mass timber industry,” Matthew Karmel, CEO of Structurlam, said in a news release. “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.”

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