Reston-based electrical contractor Truland Systems Corp., which had been reorganizing in hopes of selling itself to investors in the three months before its abrupt shutdown on Monday, filed for bankruptcy protection Wednesday.
Truland Systems and two of its affiliated companies, Truland Service Corp. and Truland Walker Seal Transportation Inc., filed for Chapter 11 in the U.S. Bankruptcy Court in Alexandria, ending days of speculation and setting the stage for a possible sale to other interested parties. In their filings, the company noted pending bankruptcy cases, including that of its parent company, The Truland Group Inc.
Truland Group is the D.C. region's largest electrical contractor with $371 million in 2012 revenue. Its decision to shut down its operations shocked many in Washington's commercial real estate industry, impacted more than 1,000 employees and dozens of active projects across the region.
According to the filings, Truland's board of directors met on July 22 and voted to take the companies into Chapter 11 and to appoint Tysons Corner law firm Leach Travell Britt PC to represent it in the proceedings. Its vote comes roughly three months after the company retained restructuring firm Protiviti to help reorganize with the intent to sell, as I reported Wednesday based on an interview with a company executive. Leach Travell Partner Stephen Leach, who is representing the companies, could not be immediately reached for comment.
It is telling that the company filed for Chapter 11, setting the stage for a court-regulated reorganization, rather than a Chapter 7 liquidation that would have set the stage for a sell-off and dismantling of its business. The Truland entities that filed for Chapter 11 have not yet filed supporting documents detailing the extent of their finances. In their initial filings, Truland Systems and Truland Walker Seal each listed between $10 million and $50 million in assets and between the same amount in liabilities. Truland Service listed between $1 million and $10 million in assets and between $10 million and $50 million in liabilities.
Wednesday's filing is the latest in a series of events since last Friday, when company officials, having missed making payroll, promised that employees would be paid on Monday. Then, on Sunday, a restructuring expert retained to help sort out the company's finances told top officials to tell their employees not to show up for work the next day because the company was going to be shutting down.
Since then, claims have started to mount against the company, including one by the fund manager for several funds representing Truland union workers that filed an involuntary bankruptcy petitions seeking the company's liquidation. Truland's Chapter 11 filing trumps those petitions.
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