W.T. Harvey Lumber Company, founded during the Civil War nearly 150 years ago, has filed for Chapter 11 bankruptcy protection, having never recovered from the 2008 housing market collapse.
The Columbus company submitted its filing Tuesday afternoon to the U.S. Bankruptcy Court for the Middle District of Georgia, which has offices in Columbus and Macon.
Bailey Gross, Harvey Lumber President and Chief Executive Officer, said in an email Wednesday that his company has been cutting expenses for some time, including reducing its work force from a peak of 165 in 2007 to 57 just before the bankruptcy filing. Seventeen people have been furloughed with one week of severance pay.
The remaining employees, from top management down, have agreed to significant reductions in compensation to aid in the process, Gross said. Harveys hope is that the furloughed employees can be returned to regular employment, sooner rather than later.
The company, in a news release, said the decision to file for bankruptcy protection was difficult, but necessary because of the housing market meltdown four years ago that left many of its customers on the ropes financially.
The collapse of the building and housing economy since 2008 caused a decline in the demand of building material and also a number of defaults by Harveys customers, many of whom themselves filed bankruptcy or have gone out of business, the company said.
It also mentioned a flurry of competitors entering the market in recent years as a factor for its problems. Those include 84 Lumber, Pro-Built Supply and Brand Vaughn Lumber, all of which remain in the market, Bailey said.
Those competitors would be on top of the big-box suppliers such as Lowes and Home Depot, both of which have been here for years, with deep pockets and the ability to cut prices to the bone.
The family-owned business said it hopes its current move will allow it to either restructure and turn things around or find a buyer that will keep the operation going locally.
Discussions are under way with creditors now, but no final decisions made, Harvey Lumber attorney Fife Whiteside said in an email. Whatever is done will be subject to court approval and public notice. The company hopes to be able to present a concrete plan soon.
Harvey Lumbers main office and lumber yard is located at 800 15th Street near downtown Columbus. It also has a store on Crawford Road in Phenix City. Four other locations were closed over the last couple of years as the economy hit the skids.
The official Chapter 11 filing submitted to the bankruptcy court lists the company with total assets of $2 million as of Dec. 1, with total debts of just under $5.2 million.
The top four creditors are Allied Building Stores in Monroe, La., Ace Hardware in Charlotte, N.C., Dairymans Supply Company in Gadsden, Ala., and American Lumber in Birmingham, Ala. The amounts owed to those range from $259,322 to $128,145.
All of the creditors are building material suppliers, according to the filing, with none of those in the top 20 from Columbus.
This has been a particularly heartbreaking year for Harvey Lumber, which lost its longtime CEO Wilfred E. Bubber Gross Jr. Baileys father in January. He had run the company nearly half a century.
The lumber and supply operation was founded in 1863 by Bubber Gross great-grandfather, William Thomas Harvey. Wounded while serving in the Confederate army, the Talbot County resident returned to the area and began cutting timber for the railroad, which led to the companys formation in Columbus.
W.T. Harvey Lumber Co., which served single-family residential, multifamily and commercial builders in Columbus, Phenix City and the surrounding area, became a multimillion-dollar operation. In a 2003 interview, Bubber Gross said the company was doing $30 million in annual sales.
The innovations by Gross included setting up perimeter storage sheds at his lumber yard to eliminate congestion when multiple customers were picking up loads.
It also was under his tutelage that an advertising campaign was launched featuring a smiling cartoon character called Little Harvey exclaiming, Buy where the builders buy!