Innovative Files Chapter 11

May 13, 2009

The move allows the company to develop a plan to repay creditors, with accounts totaling at least $11.7 million, according to court filings.
Innovative CEO Karen Pearse described the action as “a defensive move” in dealing with the bank that the company used for its credit. Innovative, she said, had negotiated for other financing before the filing, and anticipated to be out of reorganization “very quickly.”
Innovative, founded by Pearse in 1981, began as a stone-distribution company, supplying a number of high-end projects in the northeast United States. It expanded several years ago by supplying Home Depot with Stonemark® countertops, offering a 15-year warranty on stain resistance using the company’s PermaShield protection.
The company also offers its Everlife™ collection of PermaShield-granite through a nationwide network of more than 230 stone fabricators and kitchen/bath design centers.
In the filings, Innovative listed itself as holding between $10 million-$40 million in assets and in liabilities, listing a total of 419 creditors. The six companies involved in the reorganization (with published debt of top creditors) are Innovative Companies LLC, Innovative Marble & Tile LLC, Innovative New Jersey LLC, Innovative Stone LLC, Innovative Stone Distribution LLC and Innovative Stone Surfaces.
Business will continue as usual during the reorganization, said Pearse, who also gave high marks to her vendors in the current situation.
“I cannot express enough what an amazing group of vendors I have,” she said. “They’ve all been affected by the economy and by the situation, and the vendors have stood by us 100 percent, and been totally supportive.”
A Chapter 11 filing under federal bankruptcy laws allow a company to renegotiate debt and credit, and seek financing, and protects against any creditor forcing dissolution of a company and selling the assets to collect its debt. Reorganization is used to keep companies going, as opposed to Chapter 7 filings (such as with Matrix Stone Products late last year), where assets are liquidated to pay creditors.