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Woodtex Files for Bankruptcy

(Photo courtesy of Melinda Gimpel on Unsplash)

Woodtex LLC, a manufacturer of sheds and other structures based in Franklin, Tennessee, filed for Chapter 7 bankruptcy Monday, March 2, according to public documents filed with the United States District Court for the Middle District of Tennessee obtained by Shed Builder Magazine.

Bankruptcy papers were filed for all of Woodtex’s business entities, including Riverwood Cabins LLC in Himrod, New York; Woodtex of New York LLC; Woodtex of Texas LLC; and Woodtex of Tennessee LLC. 

According to the documents, the liabilities of all five entities total around $15.7 million with only $2.2 million in assets. 

At least 352 unsecured creditors are listed in the filings. Unsecured creditors for Riverwood Cabins appear to be private individuals who place deposits on buildings, while Woodtex unsecured creditors appear to be mostly trade-related companies that supplied materials and services.

Chapter 7 bankruptcy is a liquidation bankruptcy that essentially wipes out most unsecured debts. A trustee is appointed to sell nonexempt assets to pay back creditors as much as possible. 

According to reports by The Steuben Courier Advocate in Bath, New York, Riverwood Cabins had been rumored to be in trouble for months while employees and partners were told parent company Woodtex was on good footing.

The newspaper also reports that Riverwood Cabins sales people were seeking installment payments to guarantee delivery as late as January this year. The cabin company was first to file for bankruptcy on February 10.

In a statement posted on the Riverwood Cabins website, Kent Lapp, the owner of Riverwood, said, “Because of continuing operating losses, and the departure of some key executive, I resumed the role of CEO for Riverwood late in 2019.  At that time, Riverwood was experiencing a severe shortage of working capital. During 2019, I caused a substantial amount of fresh capital (much of which was derived from my personal assets) to be infused into Riverwood, but this proved inadequate to meet the need, and Riverwood was forced to cease operations in late January, 2020.

“Naturally, I regret this very much, not only because I have lost my entire investment in Riverwood, but also because I, and my parents before me, have been dedicated to this line of work for nearly 40 years, and I know this will cause financial loss for Riverwood’s many fine customers and vendors, and loss of jobs for our many valued employees.” 

Sanford and Barbara Lapp started Woodtex in 1983. Their sons, Kent and Benjamin Lapp, later inherited and expanded the business. 

Kent Lapp, CEO, signed the bankruptcy papers.

Woodtex has not responded to Shed Builder Magazine voicemails and emails regarding the bankruptcy.

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