With debt funding, Madison manufacturer TimberHP outlines reorganization plan

File Photo / Courtesy, TimberHP TimberHP, a Madison-based manufacturer of wood fiber insulation, has filed for voluntary Chapter 11 bankruptcy protection.

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By Renee Cordes

Less than two years after TimberHP brought a shuttered Madison paper mill back to life by manufacturing high-performance wood fiber insulation, the company has filed for bankruptcy protection.

The startup, a division of Belfast-based GO Lab Inc., last week filed a voluntary, pre-negotiated Chapter 11 reorganization plan in U.S. Bankruptcy Court in Delaware.

The Madison plant was retrofitted at a cost of $125 million, which included loans, grants and private equity investment.

Original backers included the Finance Authority of Maine, Maine Rural Development Authority, town of Madison, state Department of Economic and Community Development, Somerset Economic Development Corp., Coastal Enterprises Inc., Eastern Maine Development Corp. and Maine Technology Institute.

As part of the plan announced Friday, bondholders will invest $29 million as the company continues to produce two types of insulation and builds out its sales and support team.

“TimberHP is grateful to its sales partners, vendors, employee partners and bondholders for standing by the company through this challenging, but necessary process,” Matthew O’Malia, co-founder and CEO, said in a written statement.

“TimberHP has an incredible product line, and we are pleased to have the support and capital required to execute our business plan and address the growing demand for sustainable insulation materials in the U.S. construction industry,” he added.

O'Malia, an architect, joined forces with chemist Joshua Henry in 2015. Four years later, they bought the mill property in Madison for $1.4 million and launched TimberHP. The company started manufacturing its first product in 2023 and added a second line the following year.

In Friday’s announcement, the company said it expects to expedite the Chapter 11 process and emerge from bankruptcy within coming months “to a strengthened financial opposition” and access growth capital to complete its third manufacturing line.

Henry and O’Malia were honored as Mainebiz Business Leaders of the Year in 2024. At the time, Henry said that while the company was focused on Madison, “I suspect we will have additional facilities across the country,” in other rural communities.

TimberHP is taking financial advice on the voluntary bankruptcy reorganization from investment bank Jefferies LLC and legal advice from Cozen O’Conner, a Philadelphia-based law firm.