U.S. BANKRUPTCY COURT Summitville Tiles files Chapter 11; will operate during reorganization

The company said cheap imports have put most tile companies out of business.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
YOUNGSTOWN -- Calling itself one of the last remaining family-owned producers of ceramic tile in the country, Summitville Tiles filed a petition for Chapter 11 bankruptcy protection in federal court here, listing assets of $15 million and debts of $24 million.
The company said it will continue to operate while working to reorganize its debts.
Judge William Bodoh agreed in U.S. Bankruptcy Court here Friday to let the company continue to pay employees' wages and benefits, utility bills and other business expenses to customers, shippers and warehousers. Once a bankruptcy case is filed, the debtor must secure court approval for even routine expenditures.
Summitville Tile employs 255 hourly and salaried workers, court documents say, and has a monthly payroll, including benefits, of $700,000.
Based on state Route 644 in Summitville, the company has a tile manufacturing plant in Pekin, Ohio, and has other facilities in Summitville, Minerva, and Morganton, N.C.
New plant
Company president David Johnson said in an affidavit filed in bankruptcy court that the company invested $18 million to build a new, glazed porcelain tile manufacturing plant in Morganton in 1990. The plant made money in the early 1990s, he wrote, but then cheap foreign imports began driving prices down and the company was forced to close the plant in October 2001.
Efforts to sell the plant have been unsuccessful, he said, and the company is still paying $2 million a year plus interest on loans for the facility. The company also was forced to close most of its distribution centers across the country in March, a process which cost another $2.3 million this year in losses from operations and liquidation costs.
Johnson told the court that the company's Ohio quarry and brick making operations had been consistently profitable and do not face the foreign competition that troubled the North Carolina plant, so the company merged all quarry and floor brick manufacturing into the Pekin plant in November 2002.
The move was expected to save $1 million a year in operating costs, but officials discovered that kilns and dryers in the Pekin facility were not adequate to handle the additional sizes and varieties of products, so the plant's capacity dropped. Capital improvements are needed there, Johnson said, as part of the company's plans to restore its profitability.
Founded in 1912, Summitville Tile was once one of the largest domestic makers of ceramic tile. At its peak in 2001 the company had 600 employees.
Shawn M. Riley, an attorney with the Cleveland law firm of McDonald, Hopkins, Burke & amp; Haber, is representing the company in its Chapter 11 case.
vinarsky@vindy.com