Starbulletin.com

Thursday, May 22, 2003



Movers to liquidate

Giving up on Chapter 11, American
Movers Inc. is shutting down
and auctioning off its equipment


American Movers Inc. has given up on its bankruptcy reorganization effort, choosing instead to go out of business and sell off its trucks and other assets to pay creditors.

The goods will be sold at an auction Saturday at the company's base in the Waipio Gentry Industrial Park in Waipahu. There could be some bargains for buyers and some surprises, said Martin McClain, head of McClain Auctions, which will conduct the sale.

"There's tons of unclaimed storage," he said, including unopened boxes whose contents aren't known. There are more than 100 shipping and storage cases called van packs and thousands of sealed boxes, he said.

"Some of it has been there 20 years," McClain said. "There's even one van pack of LP records."

The big items are the company's trucks, vans, trailers, cars, forklifts and office equipment, including computers and digital cameras, McClain said.

Arthur A. Heath, president of the 30-year-old company, said workers compensation insurance costs played a part in the downfall of the business. American Movers had already been losing money, but then had two bad years when losses soared to around $400,000 a year, Heath said.

And it couldn't get workers compensation. Early last year it turned to the state-authorized "insurer of last resort," Hawaii Employers Mutual Insurance Co., which wanted to charge more than $900,000 to insure 80 workers for a year. That was more than the company could afford, Heath said.

HEMIC said that was a reasonable rate based on the company's claims record.

The insurance cost increase led American Movers to lease workers from Altres Staffing Inc., with Altres responsible for the insurance, and that pushed up operating costs. Along came the West Coast dock disruptions last fall which caused additional expenses, such as overtime pay, because goods would arrive in spurts, he said.

"You keep stacking stones on top of something and pretty soon it breaks," Heath said.

The company had already been hurt by a step three years ago into a business Heath admits he didn't know enough about -- a contract for moving goods for military personnel.

The company filed in October for protection from creditors in a Chapter 11 bankruptcy reorganization, listing $645,000 in debt to the largest 20 unsecured creditors. Attorney Jerrold K. Guben, representing American Movers, said at the time that it wasn't a lot of debt compared to other bankruptcies.

There was only one secured creditor, City Bank, which was owed $400,000.

Heath said he tried trimming the company, disposing of parts of it such as its records-storing business, and leaving it with just its core household moving operations.

After a few months, however, it became clear that the company at best could only hope to break even and there was no point in continuing, Heath said.

The auction goods can be viewed at 94-1489 Moaniani St., Waipio Gentry Industrial Park, from 8 to 10 a.m. Saturday. The sale will start at 10 a.m., McClain Auctions said.

--Advertisements--
--Advertisements--


| | | PRINTER-FRIENDLY VERSION
E-mail to Business Editor

BACK TO TOP


Text Site Directory:
[News] [Business] [Features] [Sports] [Editorial] [Do It Electric!]
[Classified Ads] [Search] [Subscribe] [Info] [Letter to Editor]
[Feedback]
© 2003 Honolulu Star-Bulletin -- http://archives.starbulletin.com


-Advertisement-