Pro dealer trumps bank in Michigan lien case
The U.S. Michigan Court of Appeals has upheld the construction lien of Stock Building Supply over AmTrust Bank in a residential foreclosure case, according to an opinion released on Aug. 2.
Stock, along with co-plaintiff Jeddo Drywall, supplied materials for a single-family house being built in 2006 in a development called Cambridge Meadows, a community south of Detroit. Cambridge did not pay Jeddo and Stock, so both companies filed liens against the developer. Stock’s final lien eventually totaled $35,997. AmTrust Bank, which provided construction funding for Cambridge in 2005 when it was installing streets and utilities, foreclosed on the subdivision in 2008.
Jeddo and Stock were forced to sue AmTrust and others to foreclose on their construction liens. A trial court ruled in their favor because construction liens have priority as a matter of law, as long as physical improvements were made to the property before AmTrust recorded its mortgage.
The Michigan appeals court agreed. Construction liens for labor and materials furnished for a particular residence in a subdivision have priority over a bank’s mortgage covering the entire subdivision, the judges said. They also disagreed with the bank’s argument that no physical improvements had been made to the property before the mortgage was recorded. Grading, paving streets and installing utilities all counted as property improvements, the court ruled.
Slight dip in sales at Ply Gem
Ply Gem, a leading manufacturer of siding, windows, doors and other exterior products, reported net sales of $294.5 million for its second fiscal quarter, a 2.4% drop from sales in the same quarter last year.
Excluding $2.7 million of buyback expense associated with a significant new customer win, second-quarter operating earnings were $28.5 million compared with $30.3 million for the second quarter of 2010.
In a prepared statement, company president and CEO Gary Robinette said he was satisfied with Ply Gem’s sales and adjusted EBITDA for both the second quarter and the first half of 2011. “Despite single-family housing starts being down 17% in the first half of 2011 as compared with the prior year, Ply Gem’s sales only showed a modest 2.2% decline, reflecting a significant new customer win and further demonstrating our ability to gain profitable market share,” Robinette said. “Given that market conditions for 2011 are expected to remain challenging, Ply Gem will continue to focus on maintaining a lean overall cost structure, while maximizing cash flow and striving to outperform the marketplace in all business units, which will ensure that Ply Gem emerges stronger as the housing market recovers."
Headquartered in Cary, N.C., Ply Gem produces a product line of vinyl siding, designer accents and skirting, vinyl fencing and vinyl and composite railing, stone veneer and vinyl windows and doors used in both new construction and home repair and remodeling in the United States and western Canada. The company also manufactures aluminum-clad windows, steel, fiberglass and patio doors. Its products are sold through two-step distributors, pro dealers, home improvement dealers and big-box retailers.
BlueLinx signs credit agreement in Canada
BlueLinx Holdings, a leading distributor of building products in North America, announced that its indirect subsidiary BlueLinx Building Products Canada has entered into a revolving credit agreement with CIBC Asset-Based Lending. The new credit facility provides for borrowing capacity of up to $10 million and has a term of three years, maturing on Aug. 12, 2014.
In addition, the credit facility provides for an additional $5 million uncommitted accordion credit facility, which would permit the company to increase the maximum amount of borrowing capacity up to $15 million.
"We are pleased to secure this new revolving credit facility with CIBC," said Doug Goforth, BlueLinx chief financial officer and treasurer. "The availability of this new credit facility provides us additional financial flexibility to execute our growth plans in Canada at attractive rates and enhances our liquidity position."
Headquartered in Atlanta, BlueLinx Holdings serves approximately 11,500 customers nationwide, including dealers, industrial manufacturers, manufactured housing producers and home improvement retailers. The company operates its distribution business from sales centers in Atlanta and Denver, and its network of 60 distribution centers.