Rumors started spreading a few weeks ago as dealers began calling us that they had received a strange letter from Cardell.
As it turns out, the letter wasn’t from Cardell, it was from a firm representing Wells Fargo who apparently owns the credit agreement with Cardell.
The legal letter is a bit cryptic, but this is the quote that has dealers attention is “Default has occurred under the terms of each of the Credit Agreements…”
But what does this mean?
This morning, workers arrived at Cardell to guards blocking their entrance and telling them to go back home. Workers were also told that they should “wait for a call from their supervisor about their employment”.
It’s probably easy to jump to the conclusion that it’s game over for Cardell, but we think prudence and patience is key. Many companies not only successfuly navigate through bankruptcy, but they also live to thrive under the restructuring which occurs.
But remember – no one really knows for sure what is going on yet.
This story is still developing and BreakFront has contacted Cardell for information on next steps for dealers. We will be updating this story as more information becomes available.
As of this afternoon, reports are coming in from sales rep agencies who are telling dealers that Cardell has been closed by Wells Fargo Bank as of Saturday afternoon. Apparently there are no more orders being accepted.
Dealers can call 210-225-0290 for more information, however after we called we were told that as of now the plant is shut down, the gates are locked and there is no more production.
End of Day Update
According to the San Antonio Express-News, Cardell will be shutting down it’s operations and has not sought bankruptcy proction. Due to the extreme debt that Cardell owes, the attourney working with Cardell, Howard Macr Spector does not think that they will file for bankruptcy. Instead, it looks as though they will dissolve the company.
Neal Morton, the reporter on the story, reports that Cardell owed more than $15 million to unsecured creditors, along with $30 million that it borrowed from lenders.
Spector said “These are unfortunate circumstances, but the harsh reality is that the company cannont sustain itself and meet its business and financial obligations.”
Once manufacturing 8,000 cabinets per day, Cardell was producing less than a quarter of that as of late, being effected by the crash in the housing market.