Supply One, the home improvement company with stores in the Reno-Carson area as well as South Lake Tahoe, has more than $20 million in debts.
According to documents filed in U.S. Bankruptcy Court in Reno, the company, which has nine stores in Nevada, California and Oregon, owes $19.8 million to Union Bank of California in three secured loans.
That doesn't count the 18 pages of unsecured creditors - mostly companies supplying the home improvement materials, tools and parts sold at Supply One. And 20 of those unsecured creditors are owed more than $60,000 apiece, led by CCI Triad of San Francisco, $147,936, and Leo Gentry Wholesale Nursery of Oregon, $139,743.
Altogether, Supply One's debts are more than $20 million.
The company has been hurt in several of its markets by competition from major home improvement chains - first Home Depot and then Eagle, which is now Lowe's.
Owners filed under provisions of bankruptcy Chapter 11, which is designed to allow a corporation in financial trouble protection from creditors while it reorganizes and develops a plan to pay everyone. Under Chapter 11, companies remain in business during proceedings.
If the company eventually can't be rescued from its debts and fails, secured creditors get paid first. Remaining assets are then divided on a percentage basis among the unsecured creditors.
Those creditors are to meet with company and bankruptcy officials Oct. 2.
The Aug. 24 bankruptcy filing was followed a day later by a request for an emergency order allowing the company to use its cash credit line with Union Bank to pay ongoing costs of staying in business including payroll for several hundred employees, utility bills and taxes owed in the three states where Supply One operates stores.
"Management of Supply One believes that, without immediate availability of cash collateral for use in Supply One's retail operations, Supply One will be unable to meet its payroll obligations, to purchase inventory and other items necessary for the orderly operation of its business as it commences its effort to reorganize and, thus, will be unable to continue to operate as a going concern, even on a temporary basis," company lawyer Stephen Harris argued.
Union Bank lawyers agreed to help the company with its cash flow problems and Bankruptcy Judge Greg Zive approved that order in an Aug. 29 hearing - which means the stores will remain in business at least for now.
In addition to the Supply One store in south Carson City, the company operates a store in Meyers near South Lake Tahoe, one in Reno, one in Sparks and five stores in Oregon. The company is owned by the Steiner family of Reno with John J. Steiner, Jr., listed as owning 56.4 percent of the stock.