Romeo machine shop files for bankruptcy, blames supply chain and labor issues
The company has between $1 million and $10 million in liabilities and less than $50,000 in assets, according to the filing.
“The global COVID-19 pandemic has had a lasting impact on Debtor’s operations,” according to a motion filed by Scott Kwiatkowski, an attorney representing Cammand. “…Due to the inability to manage a second shift and increased expenses associated with global supply chain issues, operational costs increased and the debtor faced impending business closure .”
Kwiatkowski, a partner at Southfield-based Goldstein Bershad and Fried PC, did not respond to a request for comment on Thursday. Crain also left a message for the company.
This week’s bankruptcy is the latest sign that the financial problems of some small manufacturers and suppliers may be coming to a head. Bingham Farms-based Gissing North America LLC filed for Chapter 11 last week, citing many of the same factors as Cammand, including inflation and labor shortages.
Cammand, founded in 2002, operates in a 14,000 square foot workshop with CNC, gun drilling, surfacing and design equipment.
At its pre-pandemic peak, Cammand had 18 employees running two shifts a day during the week with limited hours on weekends, according to the filing. It has since lost two-thirds of its workforce.
“Prior to the Global Pandemic, 20% of Debtor’s job orders came from Canada and since the onset of the Global Pandemic, Debtor has lost the majority of Canadian jobs resulting in reduced revenues,” the filing said.
The company owes about $1.5 million to Huntington National Bank, with which it has two prior forbearance agreements. He also owes the US Small Business Administration nearly $120,000 for unforgiven Paycheck Protection Program loans.
His other big creditors are Birmingham-based Mac R LLC, which is seeking $132,210, and Sterling Heights-based Merrifield Machinery Solutions, which is seeking $14,500.
Cammand estimated that he would need to spend approximately $252,780 to continue operations for the next three months, which he said would be in the best interest of his creditors. The court approved a petition on Tuesday to allow the company to use the cash collateral.