Kelly-Moore Paints, a national retailer of paints for the homeowner and contractor industry, plans to immediately cease operations and commence an "orderly, out-of-court wind-down of substantially all its business."

The paint supply business, which was started in San Carlos in 1948, announced it was immediately ceasing operations. Kelly-Moore has faced thousands of claims in court due to its past use of asbestos in cement and texture products. The company is facing mroe than 30 years of asbestos-related litigation.

During the wind-down process, the company said it will continue to endeavor to fulfill previously placed customer orders to the extent possible from existing inventory in Kelly-Moore’s Union City, California, distribution facility. All the Company’s other facilities will be permanently closed effective immediately, including Kelly-Moore’s manufacturing facility in Hurst, Texas, and its retail stores, all of which were leased. Kelly-Moore employees will be fully compensated for regular time worked, and management will continue its efforts to collect receivables to pay all accrued benefits including Paid Time Off.

The company announced a furlough of approximately 700 employees across the Company’s locations, as well as an operational halt at its manufacturing facility. At the time, the Company had a number of interested investors with which it was working, in hopes of allowing for a return to full operations. Since then, the Company has continued actively seeking new capital to enable a turnaround, with assistance from financial advisor Houlihan Lokey. Unfortunately, none of the interested investors has stepped forward with a Letter of Intent, and the Company has not secured the additional funding needed to continue operations.

"I'm extremely disappointed and saddened by this outcome, as the entire Kelly-Moore team made incredible efforts to continue innovating and serving the unique needs of professional painting contractors,” said CEO Charles Gassenheimer. “The ownership group’s commitment from day one was to fix the business if we could. Sadly, no matter how great the Kelly-Moore team, products and reputation for service, we simply couldn’t overcome the massive legal and financial burdens that have been weighing on the Company for many years."