Kelly-Moore Paints in Financial Turmoil, Announces Closure Amidst Asbestos Lawsuit

Kelly-Moore Paints, a renowned paint manufacturing company, has recently announced its decision to cease all operations and initiate the process of winding down its business. The CEO, Charles Gassenheimer, conveyed his gratitude to the dedicated employees and expressed his deep regret regarding the closure. This difficult decision was made after careful consideration of various factors affecting the company’s viability. Despite the challenges faced, Kelly-Moore Paints has been recognized for its exceptional products and services throughout its existence. The closure marks the end of an era for the company, leaving behind a legacy of quality and innovation in the paint industry.

Immediate Shutdown of Facilities

In a move to streamline operations and cut costs, the company has announced the immediate closure of several facilities, including its manufacturing plant located in Hurst. This decision comes as a result of the company’s recent order for 700 workers to go on furlough and the halt of production at all its manufacturing plants. The closure process will involve the shutdown of various operations and departments within the company. This strategic decision aims to address the current economic challenges faced by the company and ensure its long-term sustainability. The company is actively working on implementing measures to mitigate the impact of these closures on its employees and stakeholders.

Fulfillment of Previous Orders

Kelly-Moore Paints has recently announced its closure, but the company wants to assure its customers that it is committed to fulfilling their previous orders. Despite the challenging times, the company is determined to use its existing inventory to meet the needs of its customers. This dedication to customer satisfaction is evident in the company’s efforts to go above and beyond, even in the face of adversity. Kelly-Moore Paints understands the importance of honoring its commitments and wants to ensure that its customers are not left hanging. By utilizing their available resources, the company aims to maintain its reputation for excellent customer service and reliability.

Compensation for Employees

In addition to expressing gratitude for the hard work and dedication of its employees, the company has made a commitment to provide compensation for the work performed by its employees. This includes the payment of accrued benefits, such as Paid Time Off, to ensure that employees are duly rewarded for their efforts. By offering this compensation, the company recognizes the valuable contributions made by its employees and aims to foster a positive and supportive work environment. This gesture not only serves as a token of appreciation but also reinforces the company’s commitment to its workforce and their well-being.

Challenges Faced by Kelly-Moore Paints

Kelly-Moore Paints has faced numerous challenges over the years, which have ultimately led to its closure. One significant challenge was the legal and financial burdens resulting from the company’s past use of asbestos in its paints. The company had to pay over $600 million in damages related to asbestos lawsuits, draining its capital.

Impact of Asbestos Lawsuits

Asbestos, a carcinogenic substance, was used in Kelly-Moore Paints’ products in the past. Although the practice was stopped in 1981, the company continued to face lawsuits related to asbestos exposure. Over the past 30 years, the company had to deal with thousands of lawsuits, resulting in significant financial liabilities.

Supply Issues and Financial Liabilities

In addition to the asbestos-related challenges, Kelly-Moore Paints also faced supply issues due to the COVID-19 pandemic. The company was acquired by Pleuger Chemicals, which inherited the financial liabilities, including unpaid sales and use taxes. Efforts were made to improve the company’s financial health, such as relocating its headquarters and negotiating asbestos litigation claims.

Exhausting All Alternative Options

Despite exploring various alternatives, including bankruptcy reorganization and in-court liquidation, Kelly-Moore Paints found itself unable to continue operations due to financial constraints. The company also lacked hard assets that could be sold to generate funds for creditors.

Final Words

The closure of Kelly-Moore Paints is a sad outcome for the company and its employees. CEO Charles Gassenheimer expressed his disappointment and praised the efforts of the Kelly-Moore team. He also extended his sympathy to the loyal employees, customers, industry partners, and communities affected by the closure.

While the closure marks the end of an era for Kelly-Moore Paints, it serves as a reminder of the challenges faced by businesses in a constantly evolving landscape. The company’s commitment to its customers and employees throughout its history will be remembered.

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