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July 2, 2009

Correct Building bankrupt, seeks sale

By Carol Coultas

Correct Building Products LLC, a 10-year-old composite decking company in Biddeford, has filed for bankruptcy and says its only salvation will come from a proposed sale to a subsidiary of Wayne, N.J.-based Building Materials Corporation of America.

The company filed for Chapter 11 bankruptcy on July 2. Listed as one of its largest creditors is the Maine Technology Institute, which it owes roughly $250,000 from a development award. Martin Grohman, the company's co-founder and chairman of the board, said in a prepared statement that the sale and associated bankruptcy filing will position the company for greater sales of its specialty deck material and fuel future growth in jobs and manufacturing expenditures. To speed the transaction, Correct has asked the bankruptcy court to quickly approve a sale to Lobster Acquisitions LLC under section 363 of the U.S. bankruptcy code. The sale price is $2.5 million, according to its court filings.

If the sale is not approved, Peter Anania, Correct's president, said in an affidavit that "it will mean the end of the business and result in a loss of jobs." The company currently employs 42 people, according to its court filing.

The company said the sale to Lobster Acquisition has the support of significant creditors, customers and employees. The company reported a 40% increase in sales last summer over its 2006 sales for the same period before the slump in construction activity prompted the layoff of 25 Correct workers last October.

Reader comments

From Jeff Tounge (Mon 7/27/2009 10:24 PM)

As indicated in the article, Lobster Acquisition LLC is a subsidiary of Wayne, N.J.-based Building Materials Corporation of America, not owned by the President of Correct Building Products so there is no conflict of interest. To the contrary, under a management contract as President of CBP Mr. Anania has worked diligently over the past 18 months with the CBP ownership and Board to save as many jobs as possible and position the company as best as possible to weather the downturn and attract investment to bring CBP back to the market in as healthy a state as possible.  

From Timothy Hiltz (Thu 7/16/2009 12:06 PM)

Is Lobster Acquisitions LLC owned by the President of Correct Building?

If so - is this a conflict of interest?

Is the President doing what is right for Correct Building or Lobster Acquisitions LLC?

From Martin Grohman (Mon 7/6/2009 5:00 PM)

This transaction is about growing our business. We'll have greater access to the building products equivalent of 'shelf space'; more capability to invest in the plant and people; and the means to make it through the nuclear winter of construction spending. Jobs in Maine will be the result.

Maine Technology Institute has been a phenomenal supporter. They deserve substantial credit for the resulting job creation.
 

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