Despite Lots Of Work, Boylston's Iaccarino Filed For Bankruptcy
PHOTO/MATT PILON
Architectural millwork company Iaccarino & Son of Boylston had plenty of work, but filed for Chapter 7 bankruptcy in November. The company's attorney said it felt the pressure of a tough, competitive bid market.
It's not apparent from looking at the annual revenue of Boylston-based Iaccarino & Son, an architectural millwork shop that declared Chapter 7 bankruptcy in November, that there was anything amiss.
The company's gross income totaled more than $14.1 million in 2010, climbed to just under $16.8 million in 2011 and, as of Nov. 19, had reached $13.3 million, according to bankruptcy court filings.
And its backlog of 35 active contracts in varying stages of completion showed there was plenty of work to be done, ranging from a U.S. Army facility in Pennsylvania to the Saint Vincent Hospital Cancer Center in Worcester.
"We were very busy, that's the crazy thing about it," said Robin Steiger, who worked at Iaccarino for 22 years, most recently as a production manager. "We had tons of work in the shop being built."
Steiger said Iaccarino paid its employees what they were owed before filing.
The firm has done hundreds of jobs over the years for banks, schools, commercial office buildings, courthouses and other facilities, according to a list of clients on its website.
But the 83-year-old family business, which had nearly 50 employees, was struggling in recent years with its profit margins, both Steiger and the business's attorney said.
"A lot of the jobs we took for the two or three years when the market was slow were at a very minimal profit margin," Steiger said. "We had to pay overtime and that wasn't in the budget, so that came out of [Iaccarino's] pocket. "
In particular, Steiger said, the firm "took a beating" on a hospital project in New Haven, Conn., where overtime costs played a role.
Pressure On Competitive Bidding
Iaccarino's lawyer, Kevin McGee, of Seder & Chandler LLP in Worcester, confirmed that the company felt pressure to bid competitively to keep work coming in.
"A couple bad jobs set them off on a bad cycle," McGee said. "It got to the point where there wasn't enough to buy inventory. There were creditors who wouldn't sell them inventory because of old bills."
McGee said the company did everything it could to stay afloat and work with its creditors, but the need to file for bankruptcy became inevitable.
Francis X. Iaccarino, president and owner of the company, declined to comment.
The firm owes Worcester-based Commerce Bank & Trust nearly $4.1 million for machinery and equipment loans, according to a court filing from the bank, which estimated that Iaccarino & Son has about $1.9 million in collateral.
Vehicles belonging to the company will be auctioned on Jan. 22 at its 200 Shrewsbury St. facility, which contains a showroom, offices and a millwork fabrication shop. Commerce will auction machinery and other equipment at that time.
The firm listed additional debts totaling $1.5 million to more than 40 other creditors who had received some payment over the last month, but the full list of those owed money is larger.
Clients Scramble For Replacements
Many of the court proceedings have revolved around rejecting existing contracts so construction projects can move forward with other subcontractors. Documents showed that some contracted clients are having trouble finding replacement millwork firms to complete projects at the contracted prices.
"There are only a limited number of architectural millwork shops that are qualified to complete this project," the bankruptcy trustee wrote in a December filing about Iaccarino's contract to outfit a middle school in Fall River for Lowell-based J&J Contractors Inc.
But one local firm appeared poised to take over work at the SUNY College of Optometry in New York City.
Continental Woodcraft, based on Coppage Drive in Worcester, indicated it would complete the remaining $85,000 worth of work on the contract for $92,000.
Continental, which was bought by Worcester-based trade show exhibits maker Blue Hive Inc. in 2009, has hired some of Iaccarino's former employees, Steiger said.
Executives at Blue Hive did not return calls for comment.
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