Fred Hill Materials Inc. has filed for protection under Chapter 11 of U.S. bankruptcy laws.
Alex Hill, president and CEO of the Poulsbo family-based company, announced the move Friday, saying it follows the May closure of Westsound Bank.
The company will continue to deliver concrete products from its operations in Port Townsend, Sequim, Poulsbo and Bremerton, Hill said in a statement.
“Chapter 11 is reorganization, not bankruptcy,” Hill said. “We are not closing nor going anywhere.
“There will be no interruption in our manufacturing and delivery of ready-mix concrete.”
No layoffs are planned, said Doug Weese, Fred Hill spokesman.
Fred Hill Materials, which was founded in 1946, currently employs more than 70 people on the North Olympic and Kitsap peninsulas. Employment levels are typically lowest during winter months, Hill said.
Hill met with employees Tuesday along with Vice President Adam Hill and Chief Operating Officer Ted Bowman. The company contacted its customers as well.
Separate from ‘pit-pier’
Fred Hill Materials Inc. is a separate company from the proposed Thorndyke Resource project currently undergoing an environmental review as part of the permitting process in Jefferson County.
Formerly known as the “pit-to-pier” project, Thorndyke Resource involves a plan to build a 4-mile-long conveyor belt from the company’s Shine gravel pit to a 1,000-foot dock to move gravel to barges for transport out of Hood Canal.
Reorganizing under Chapter 11 will best protect employees and creditors following the failure of the company’s Westsound bank, Hill said.
The company will submit a reorganization plan in the near future that will be supported by creditors and ultimately the court, he added.
Credit crisis
“Like so many businesses, we’ve been caught up in the country’s credit crisis and the worst recession in 80 years,” Hill said.
“It’s no picnic. But we’re not doing this because we can’t pay our bills going forward.
“Restructuring our debt under a reorganization is the sensible step for long-term success.”
Bremerton’s Westsound Bank in May 2009 became the second of three Washington banks to close, and one of 149 to fail nationwide last year.
The trend has carried over to 2010.
On Jan. 29, Bainbridge Island-based American Marine Bank and its 11 offices were shut down before reopening on the next business day as branchs of Columbia Bank.
American Marine was the third Washington bank in January alone to fail, largely because of the collapse of the housing bubble resulting in delinquent loans, foreclosed properties and declining capital levels.
Fred Hill Materials in May 2009 retained its concrete delivery — “our bread-and-butter,” Hill said — when the company sold its truck-based mining operation at Shine Pit to Auburn-based Miles Sand & Gravel to consolidate company assets and cut debt.
While Fred Hill Maerials had mined sand and gravel at Shine Pit since 1979, the company’s core business since 1946 has been delivering concrete to residential, commercial and military customers throughout a five-county area on the North Olympic and Kitsap peninsulas.
“As for the past 64 years, Fred Hill Materials will continue as the dominant concrete supplier on the North Olympic and Kitsap peninsulas,” Hill said.
“We have substantial projects under way and lots of work ahead short-term and long-term.
Union cooperation
Hill acknowledged his appreciation for union cooperation throughout the tough economic and financial climate and for the pension and medical benefits agreements reached.
The company is committed to maintaining its responsibilities and benefits on a going-forward basis, Hill said.
“It’s a rarity in today’s market, but we pay 100 percent of our employees’ medical insurance,” Hill said.
“All of our employees will continue to enjoy outstanding medical benefits and a retirement plan as long as they work here, whether it’s through the unions or the company,” he added, saying that current understandings with unions will be considered and addressed under terms established in the Chapter 11 process.
“We’re eager to work all this out and see the kind of relationships we’ll have in the future,” he said.
