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Springfield Granite files Chapter 11 bankruptcy

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Despite filing for bankruptcy protection, company officials say it’s business as usual at Springfield Granite Co.
The company voluntarily filed for Chapter 11 bankruptcy in the Western District of Missouri Jan. 31.
“It’s our intention to pay everybody back,” said President Scott Hardwick. “I wasn’t interested in liquidating or shutting down in any way, shape or form. That’s why the (Chapter) 11 worked for us, because it gave me the opportunity to fulfill all of my obligations, which is something that’s real important to me.”
Exact figures for creditors, assets and debts have not yet been filed, but the petition states that there are between 16 and 49 creditors owed between $1 million and $10 million. Additionally, Springfield Granite owes taxes dating back to 2001, according to the Missouri Department of Revenue. The company reports assets of $100,001 to $500,000.
John Cruciani, attorney with Blackwell Sanders Peper Martin LLP, is counsel for the unsecured creditors committee, representing seven of Springfield Granite’s unsecured creditors.
“This case has only been on file for about three weeks and so my guess is right now the debtor is still trying to gather information and formulate a strategy,” Cruciani said. “They certainly have not filed a plan. The plan wouldn’t be due to be filed for another three months or so.”
Hardwick said that a plan for reorganization is still being discussed with his attorney, David E. Schroeder. Schroeder did not return phone calls by press time.

Bankruptcy factors
Hardwick said that two factors led to the company’s bankruptcy.
Orders had been placed with overseas vendors to keep slabs of granite in his inventory. “We were supposed to get anywhere from one to two containers a month of stone, of granite rock. Essentially, due to the steel shortage in China and the way shipping companies are getting paid a huge premium for shipping steel to China, stone being shipped in to the states is kind of on an as-boats-are available basis right now. To make a long story short, we ended up getting 27 containers from Nov. 15 to Jan. 5. We just got bombarded with the stone and the amount of granite that we had brought in.”
Each container, containing 42 to 48 slabs of granite, cost $25,000 to $30,000, he said.
Hardwick had anticipated paying $60,000 to $70,000 a month for shipments. “We got almost $800,000-worth of inventory in two months. It wasn’t supposed to go down that way,” he said. “I think if the big shipping thing hadn’t happened all at once, we would have been fine.”
Collin Turrell, lead salesman at Sun Marble, a granite importer in Lenexa, Kan., said that the industry recently went through a “hiccup” with shipping that lasted for about four months, but the situation is back to normal. Brazil, he said, has more exports than imports.
“The basic problem was the Brazilians export so much stone that they didn’t have enough containers to put on ships. What happened was a bottleneck in the ports where they didn’t have enough containers that they put on the ships,” he said.
Turrell was unable to comment on the $58,460 that Springfield Granite Co. owes Sun Marble.
Hardwick also blames the “explosive growth” the company has experienced since its inception in 1999.
“We’ve been constantly financing the future for the last five years,” Hardwick said. Almost $1 million in equipment was purchased in 2004, he said. In a two-year period ending in May, the number of full-time employees increased from eight to 40; it currently stands at 38. No employees will be let go due to the bankruptcy proceedings, Hardwick said.

Moving forward
Of the creditors holding the 20 largest unsecured claims, a shareholder loan to Hardwick tops the list at $677,532.
“We’ve invested everything we have into this company to keep it growing and keep it going at the rate that it’s been going, and we’ll continue to do that,” Hardwick said. “It’s not a termination of the company. And that’s my full intention, to reorganize it and go on and move forward.”
Moving forward for Hardwick means taking care of Springfield Granite’s clients without letting legal troubles get in the way.
Rick Kalmbach, owner of Dakota Cabinet Co. in Ozark, said he has done business with Hardwick since Springfield Granite began. He said the bankruptcy will not change that.
“I know Scott personally and I’m familiar with what’s going on, and I know that he wouldn’t jeopardize our business and personal relationship in any way that would have an effect on my business,” he said.
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