Supply One, the Reno-based home improvement retailer that filed for Chapter 11 bankruptcy protection in August, is telling its employees the company will close its stores and liquidate its assets within 60 days.
An employee at the Carson City store, who declined to be identified, said he was told Monday of the expected closure and was told it was all right to tell other people but that media inquiries should be directed to Supply One chief administrative officer Nick Parino at corporate headquarters in Reno.
Parino did not return several telephone calls made Tuesday and Wednesday. Carson City Supply One manager Eric Herzberg said he could not talk to the media and referred inquiries to Parino.
Meanwhile, a sign went up Monday in front of Supply One in Carson City saying "Space Available."
The Supply One Web site lists seven stores - in Klamath Falls, Gresham and Grants Pass, Ore.; at Meyers, just south of South lake Tahoe, Calif., and Carson City, Reno and Sparks.
The company filed Aug. 24 for Chapter 11 bankruptcy protection, which allows a company to continue to operate while reorganizing it finances. The bankruptcy documents detail more than $20 million in debts, including $19.8 million in three secured loans held by Union Bank of California.
"The whole staff was told about the reorganization plans at a meeting last week, where officials said that some of the stores would probably be closed but that Carson City would be the least likely to close because it's the cash cow," the employee told the Nevada Appeal.
"Then Monday, there was a conference call for just the managers and afterward they told us they would be closing all the stores within 60 days."
The employee said he was told the change in plans was because the company's bank had called in its mortgage loan and the company did not have any way to pay it off.
"They said to the employees that the company has never, ever missed a payment to the bank, but the bank called their loan so they're having to close everything and liquidate," the employee said.
He said the Carson City store was to receive its last shipment of merchandise Wednesday and would sell only the items already in the store until it closes. No more special orders are to be accepted, he said.
"They're not going to discount anything before closing. People have already been in asking about discounts because they've heard we're closing, but the company isn't going to do that," the employee said.
"Instead, when we close in a couple months, everything still left will go to a liquidation firm."
The employee said Supply One had assured its workers they had a job during the 60-day period.
"But there's really not too many of us left anyway," he said. He said he and some of his co-workers already have started looking for other work.
The Aug. 24 bankruptcy filing was followed a day later by a request for an emergency order allowing the company to use its cash credit line with Union Bank to pay ongoing costs of staying in business, including payroll for several hundred employees, utility bills and taxes owed in the three states where Supply One operates stores. Union Bank lawyers agreed to help the company with its cash flow problems and Bankruptcy Judge Greg Zive approved that order Aug. 29.
