GuildMaster CEO resigns; interim in place

Last edited 1:16 p.m., July 15, 2014

Less than a year into probation for illegally importing thousands of lamps from China and after securing a bankruptcy reorganization plan, GuildMaster Inc. CEO Steve Crowder announced his resignation earlier this month.

GuildMaster Vice President of Sales Margaret Powers said Crowder was leaving the home furnishings company, effective July 30, to pursue other interests.

“We have engaged an industry consultant, Randy Eller, to work with us in finding us a new CEO or a new strategic partner,” Powers said. “He’s a very well-known consultant in the home-furnishings industry, and that’s why we engaged him.”

Powers deferred additional questions about the transition to Eller, who also was appointed by the company to serve as interim CEO.

Mount Juliet, Tenn.-based Eller Enterprises consults with companies and individuals primarily in the home accent, furniture and giftware industries, according to EllerEnt.com.

“I am conducting a search for a new CEO at GuildMaster, and I have received several resumes from qualified candidates,” Eller said in an email. “We are going through a normal process in these types of situations.”

Eller couldn’t point to a timeline to fill the CEO post. “I am not sure when the decision will be made, or when it will be effective. We want to make sure we get the best possible scenario,” he said, declining to answer additional questions about the process.
 
Springfield Business Journal’s attempts to reach Crowder for comment were unsuccessful.

On June 10, FurnitureToday.com reported on Crowder’s resignation and quoted him saying he thought he had positioned the company well for growth and that he looked forward to the next challenge.

Made in China
In late September, GuildMaster secured a Chapter 11 bankruptcy reorganization plan, just one month after receiving its five-year probation sentence for using counterfeit safety certification labels on thousands of lamps imported from its manufacturer in China. The lamps were confiscated by U.S. Customs and Border Protection agents in early 2012.

In the reorganization, a small group of unnamed investors committed over $1 million to help the home furnishings firm pay down its debts and chart a new course. According to SBJ archives, Eller was listed as one of five members on GuildMaster’s board of directors at the time of the reorganization.

Under the reorganization plan, which U.S. bankruptcy Judge Arthur Federman approved Sept. 26, 25 creditors voted to receive more than $2.5 million – with secured creditor Guaranty Bank securing the largest payback, $1.72 million. Another secured claim in the bankruptcy court records, by international freight company OEC Group Inc., garnered a promise of $274,000.

Eller, who joined GuildMaster’s board of directors in 2012, according to SBJ archives, declined to comment on the status of the company’s debt-service under the reorganization plan. Kansas City attorneys Mark Shaiken and Nicholas Zluticky, who represented GuildMaster in the case, did not respond to requests for comment by press time.

Under the reorganization plan, GuildMaster left it to Guaranty Bank to retrieve the more than 5,500 lamps from customs agents. Guaranty Marketing Director Carlye Wannenmacher declined to discuss the case, citing the bank’s client confidentiality policy.

In GuildMaster’s lamp-labeling debacle, customs agents seized 10 shipments of GuildMaster lamps manufactured by Westway Enterprises Pvt. Ltd. in China. In all, the company forfeited 5,585 lamps valued at $1.8 million. Under its plea agreement, the company maintained its agents and employees had no knowledge the UL safety labels were being illegally applied to its products.

Behind the labeling missteps was a cost-saving measure facilitated by regular label purchases from a mysterious, “Mr. Wu” in China, according to the factual basis for the plea. Federal agents had interviewed the plant employee responsible for quality control, who said he continued a practice started by a former facility production manager to order UL labels by phone from an individual identified in court records as “Mr. Wu” for 16 cents apiece. Investigating agents’ attempts to locate Wu were unsuccessful, according to court records.

The next chapter?
In December, GuildMaster opened its first designer showroom in Springfield at 3055 E. Division St., which shares the same address as Jack Stack’s Great Game of Business. Helping to finance GuildMaster during the years was Quest Capital Alliance, a venture capital firm born with the help of funds from the Stack-led Springfield Remanufacturing Corp.

Crowder joined GuildMaster – which then operated under the name Decorize Inc. – in January 2004 as CEO. He left an executive vice president position with Springfield Remanufacturing Corp. and, at the time, was tasked with boosting the company’s bottom line through new management hires and better defining its product line, according to SBJ archives.

Last year’s reorganization also effectively regulates the company as private. GuildMaster had operated as a public company trading over-the-counter Pink Sheets under the symbol GLDU. The move to OTC stock a few years ago coincided with a recapitalization that allowed GuildMaster to shed more than $3 million in debt and exchange its outstanding preferred stock for equity.

GuildMaster began leasing and operating its Dongguan, China, manufacturing facility in April 2009, two months after it moved to deregulate its common stock and discontinue public reporting. In November 2009, Crowder was at the helm when the company changed its name to GuildMaster, the name of a Decorize subsidiary.

After the company secured reorganization last year, Crowder expressed relief at closing that chapter in GuildMaster’s history. “We have weathered 20 months of navigating a raging storm, but the storm has passed,” Crowder said in a news release.