Wrenn seeks Chapter 11 protection
Wrenn Associates, a Merrimack-based general contractor, has filed for Chapter 11 bankruptcy protection.
The company’s lawyer, William Gannon of Manchester, said the company fully expects to reorganize, emerge from bankruptcy and prosper in the future.
“The company has more than enough money to keep going,” Gannon said, adding the company does not plan to lay off workers or to stop any projects, he said.
Over the last few years, four large clients in Massachusetts cost Wrenn Associates $2 million, either because the customer didn’t pay — even if the project was finished — or tied up Wrenn Associates workers and equipment in case there were building changes that had to be made, according to Gannon and Sylvester Wrenn, the company’s owner and president.
“I did not set out for this path. It is not what I would have chosen, but I have to protect my employees, the rest of my customers and my suppliers,” Wrenn said. “This is a battle for our survival. I think it’s going to be tough, but I think we’re going to be able to do it.”
Wrenn Associates has taken several of these customers, all of which were in Massachusetts, to court in an attempt to get the money it is owed. The first case, which is now three years old, is scheduled to go to trial in November, Wrenn said. The courts have a backlog of cases, Wrenn said, and it becomes an expensive proposition to go after the money.
Since the company filed for bankruptcy protection, it cannot pay any of its bills nor pay its employees until its reorganization plan is filed and approved. The company has more than 300 creditors, and there is a meeting Friday in U.S. Bankruptcy Court in Manchester of its 20 largest creditors, Gannon said.
“I have been pleasantly surprised by how supportive employees, customers and our suppliers and subcontractors have been,” Wrenn said. “They seem to understand the situation. No one is pleased about not getting paid, but most people understand why it is happening.”
Wrenn said he would be more rigorous about looking into new customers due to the difficulties he had with these companies.
“They were ornery, onerous clients and we’re just not used to dealing with that. We’re used to working with clients in a congenial, cooperative manner,” Wrenn said.
In the bankruptcy papers, filed Friday in U.S. Bankruptcy Court in Manchester, Wrenn said it has $4.037 million in assets, but that its total debts are more than $7.778 million.
There are 322 creditors listed in the bankruptcy filing. The 20 largest claims total more than $3.038 million. Liberty Electric Inc. in Salem put in for the biggest claim, $281,738, while four other businesses filed claims exceeding $200,000.
Wrenn started the company 17 years ago in a back bedroom of his house. The company builds industrial and commercial buildings, as well as hospitals and other medical buildings throughout New England.