Linden Lumber: A look back
LINDEN – Linden Lumber Company was to be foreclosed upon on Sept. 7, 2007 by Federal Land Bank – one of its two major creditors – along with Wachovia, for all buildings, fixtures and tangible and intangible property in Linden and Thomasville.
The company had been going through a restructuring process over the previous few years, but it was the failure to establish a factory finish business that hurt the company’s finances.
“It was a mistake that we got into it,” said Terry Dunnam, chief executive officer of AHI Linden Lumber, at the time of the Aug. 24, 2007, commission meeting. “We bled a lot of money out of this company with that mistake.”
When the Marengo County Commission learned of Linden Lumber’s problems more than a year ago, commissioners worked to try to determine a way to keep this local major employer in operation.
At its regular meeting on Aug. 24, 2007, the Marengo County Commission approved to begin the process for a bond issue to loan up to $7 million to Linden Lumber Company.
That loan was contingent upon four stipulations being met: That there would be an independent audit of Linden Lumber; That an independent audit be done of the assets the county would be taking mortgage on; That the county approve the restructuring of the loan with Wachovia Bank and Federal Land Bank.
“We were able to get all of the players together,” said commissioner Dr. Ken Tucker on Friday. “It became apparent that we needed to get all of the parties together: The Marengo County Commission, the City of Linden, Rep. Artur Davis’s office was very helpful with this, Linden Lumber Company, Wachovia and Federal Land Bank.
“We approved the loan, based on the fact that those four stipulations were met, but they were never met. This allowed us to convince Wachovia to buy out the debt for Linden Lumber to Federal Land Bank at a substantial discount, Federal Land bank stopped foreclosure proceedings, and it bought us some time to help Linden Lumber find a viable purchaser.”
American Hardwood Industries, an organization owned by HIG Capital, announced its acquisition of Linden Lumber on April 9, 2008, saying that Linden Lumber was its fourth acquisition in the hardwoods sector since forming AHI through the acquisitions of Rossi American Hardwoods and Hardwood Lumber Manufacturing in October 2007 and the recapitalization of Augusta Lumber in December 2006.
“Once the foreclosure was off the table and the company was purchased, the loan and its stipulations all became moot,” Tucker said on Friday, explaining why there was never an actual loan from the Marengo County Commission to Linden Lumber Company.
For its actions in preserving Linden Lumber as an employer in Linden, the Marengo County Commission received the 17th annual Award for Excellence in County Government for actions taken in the 2007-08 term. At the time, more than 400 jobs were spared by the commission’s actions.
Although the decision by the Marengo County Commission was criticized by some, it worked out to preserve Linden Lumber as a local employer, and although the commission approved a loan to the company, that loan was never finalized, as none of the four stipulations placed on the loan were met.