Lee Brick emerges from Chapter 11
After nearly a year and a half in Chapter 11 bankruptcy reorganization, Lee Brick and Tile has surfaced with its leaders happy to be moving on and its creditors repaid.
The Sanford company attempted to enter into a long-term restructuring of its debt in 2011 and 2012 with its primary lender, Capital Bank, according to a statement from Lee Brick and Tile. That effort was unsuccessful, however, forcing the company to file for Chapter 11 — which finance website Investopedia calls “the most complex of all bankruptcy cases and generally the most expensive.”
Lee Brick and Tile President Don Perry said Tuesday the uncertainty surrounding the company was tough, but that he’s proud to be continuing on with the company that has been in his family for three generations.
“Our industry, not only at Lee Brick — and we’ve been here since 1946 — [has] really never seen anything like this,” Perry said. “My father [former company president, Frank Perry] passed away two years ago, but before, he told me that the next few years might be as bad as the Great Depression for our industry.”
Yet Rad Holton, the secretary and treasurer for Lee Brick and Tile, said he and other officials never lost hope and also tried to always keep the needs of the company and its employees first. And late last month, the U.S. Bankruptcy Court for the Eastern District of North Carolina closed the proceedings.
“We were confident the whole time,” Holton said Monday, adding that “at no time did anybody at Lee Brick not get paid.”
The company did go through layoffs, Perry said, but it still employs 56 full-time workers even while operating only one of its local plants.
“It’s kind of tragic when you go from running 100 million brick[s] a year to 30 million brick[s],” he said. “But that’s not a Lee Brick thing only. That’s a whole industry thing.”
However, Perry said that considering many other brick companies in this area have gone out of business or have been bought up by larger companies, Lee Brick and Tile looks to be weathering the economic storm: “We’re going to be here. We’re not going anywhere.”
And so far this year, Holton said, business has actually been up even though the housing market is still down.
“[Sales] have been a little better,” he said. “Not where we’d like to see them, but it’s better than last year.”
In previous interviews with The Herald, company officials blamed the 2008 housing crash for much of the company’s woes, saying that sales declined about 40 percent for Lee Brick and Tile in 2009 — and that the hurt didn’t stop, with 2011 being the worst year on record for the brick industry in general.
The housing market has stabilized somewhat, although Holton said most of the company’s growth this past year, and expected growth next year, is in the commercial realm.
“The home-building [market] is still not back to normal,” Holton said. “It’s still way behind.”
Sanford was at one time known as the Brick Capital USA, having produced a large percentage of the nation’s total brick supply due in large part to geography: Lee County sits on the border of the Sandhills to the south and east, and the Piedmont clay to the north and west — a combination that makes for excellent brick-making materials.
The country’s demand for brick has dried up some, as have local operations supplying that demand. But Perry said even still, he believes those working at Lee Brick and Tile are strong enough to keep the business going.
“We may not be the brick capital of the world anymore, but we are the brick people of the world,” he said.