Bankrupt Katerra sells off massive factories
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SPOKANE, Wa. - Engineered wood giant Katerra has sold two of its massive manufacturing plants after filing for bankruptcy. 

Volumetric Building Companies will acquire Katerra's 577,000-square-foot cabinet and panel facility in Tracey, California and Mercer International will acquire the company's 270,000-square-foot cross-laminated timber plant in Spokane, Washington.

Automated production at the Tracy plant

The Tracey plant, which opened in 2019, features an automated production line that manufactures building components, wall panels, floor systems, and windows. 

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Cross-laminated timber production in Spokane, Washington.

The Spokane plant, also built in 2019, was once hailed by Katerra as being the largest and most advanced CLT plant in North America. The facility was capable of outputting 13 million board feet of timber per year - mostly five-ply CLT made from 2x6 lumber boards. 

The $150 million plant was sold to Mercer for just $50 million.

Katerra filed for Chapter 11 bankruptcy on June 6. The filing followed an announcement to employees that it would cease operations effective immediately. The company had only been around for six years. 

Katerra had 43 projects under construction at the time of filing. It's unclear what will happen to these projects - leaving many contractors without answers.

The timber giant had immense debt, including at least $73 million currently owed to contractors.

It also had severe legal problems. Per The Information, the U.S. Securities and Exchange Commission began an investigation into the company in 2020 regarding accounting fraud. Katerra has also had at least 26 OSHA inspections and complaints since the beginning of 2020. 

Katerra said its bankruptcy was caused by "the macroeconomic effects of the COVID-19 pandemic on the construction industry, inability to procure bonding for construction projects following the unexpected insolvency proceedings of Katerra’s former lender, and unsuccessful attempts to secure additional capital and business."

A more in-depth analysis of the company's bankruptcy from construction industry advisor LevelSet can be found here.

 


 

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About the author
Robert Dalheim

Robert Dalheim is an editor at the Woodworking Network. Along with publishing online news articles, he writes feature stories for the FDMC print publication. He can be reached at [email protected].