Modular building unicorn Katerra files for Chapter 11 bankruptcy – news
Katerra Inc, the company established in 2015 to revolutionize construction with a technological approach to prefabricated wood, has sought relief under Chapter 11 of the United States Bankruptcy Code.
A statement posted on the company’s website yesterday said, “The rapid deterioration in the company’s financial position is a result of the macroeconomic effects of the COVID-19 pandemic on the construction industry, ‘inability to secure security for construction projects as a result of the unexpected insolvency proceedings of Katerra’s former lender, and unsuccessful attempts to secure additional capital and business.
The lender referred to is said to be Greensill Capital, the supply chain finance giant that filed for bankruptcy in March and had funneled funds to Katerra from Softbank, as reported on Financial Time.
Both Katerra and Greensill were heavily backed by SoftBank.
Marc Liebman, Katerra’s Chief Transformation Officer, said: “We are implementing initiatives on multiple fronts to maximize value and provide the best way forward for Katerra and its many stakeholders.
“Our multi-step action plan has evolved rapidly and includes consolidating operations in the United States, continuing our international operations, advancing sales of key assets, securing debtor-in-possession financing and start of a process of judicial restructuring. We are grateful for the continued extraordinary work and support of the Katerra team and other key interest groups during this extremely difficult time. “
He added that the company continues to operate overseas and has some active projects in a number of states.
The company said it would file petitions in bankruptcy court asking for permission to “continue to pay employees, suppliers and others who remain in the ordinary course of business.”
Katerra was founded in 2015 by a group of executives from real estate and technology companies. They intended to use custom wood modules made in automated factories to reduce production costs and quickly gain market share.
The Japanese conglomerate SoftBank has become the main funder. His Vision Fund ultimately contributed the lion’s share of the $ 2.2 billion that was raised for Katerra.
Katerra has grown rapidly through acquisitions, purchasing architectural firms as well as conventional contractors in an effort to rationalize and expand its offering of multi-story wooden office and residential buildings.
His statement yesterday indicated that some of these acquisitions would go on sale.
The company had been showing signs of strain for at least three years. In 2019, it announced it would cut 200 jobs and close a factory in Phoenix to focus production on a more efficient factory in California.
Image: Katerra’s factory in Phoenix, which closed in 2019. It had others in Spokane, Washington, and Tracy, Calif. (Katerra)