December 12, 2012

83-Year-Old Boylston Millwork Firm Bankrupt

MATT PILON
Iaccarino & Son's outlet, one of two facilities at its Shrewsbury Street property in Boylston. The 83-year-old firm has filed for Chapter 7 bankruptcy.

After more than 80 years in business, a Boylston-based architectural millwork firm has filed for Chapter 7 bankruptcy.

Iaccarino & Son, a 40-to-50-employee family business that was founded in 1929, filed in U.S. Bankruptcy Court in Worcester on Nov. 19.

The firm owes Worcester-based Commerce Bank & Trust nearly $4.1 million for machinery and equipment loans, according to a bankruptcy court filing from the bank, which estimated that Iaccarino has about $1.9 million in collateral.

Eight vehicles belonging to the company will be auctioned on Jan. 22 at its 200 Shrewsbury St. facility, which contains a showroom, offices and millwork fabrication shop. Commerce will auction machinery and other equipment at that time.

Iaccarino listed additional debts of $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 upward of 200.

Employees were informed on Nov. 15 that the company was filing for bankruptcy and that they would lose their jobs, said Robin Steiger, who worked at Iaccarino for 22 years, recently as a production manager.

Steiger said Iaccarino paid employees the remaining wages and benefits owed to them.

"He wanted to make sure everyone would get paid," Steiger said.

Francis Iaccarino, president and owner of the company, declined to comment.

Steiger said he knew that things were tight, but he had seen tough times before at the firm.

"I knew we had the work coming," he said. "I didn't go looking for another job."

Iaccarino's attorney, Kevin McGee of Seder & Chandler, said Iaccarino indeed had plenty of jobs lined up, but that economic pressures had forced the firm to bid low on a number of big contracts, sometimes taking losses.

"It was a problem I think a lot of businesses have had in the construction industry," McGee said. "There's only so much work to go around and you have to bid lower to get it and you end up in a bad cycle where you just don't end up making money on your jobs."

That cycle worsens, he said, when there isn't enough cash flow to buy inventory or creditors won't continue to sell inventory because of old bills piling up.

"We tried to file before it got too bad, but it was coming," McGee said. "We made every attempt we could to figure out a way the firm could survive."

Iaccarino had 35 contracts lined up in various stages of completion, records show, including a $456,000 contract with Gilbane Building Co. to provide interior work at the Saint Vincent Hospital Cancer Center in Worcester, a project at Yale University and one at Children's Hospital in Boston.

The bankruptcy has attorneys and contractors scrambling to find other millwork firms to take on the "highly time sensitive contracts," records show.

McGee said the goal is to avoid delays as much as possible. He said an upcoming hearing will try to resolve a number of bonded contracts.

Iaccarino, which lists previous clients on its website, has done hundreds of jobs over the years for banks, schools, commercial office buildings, courthouses and other facilities.

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