Klausner Files Bankruptcy

Following several years of below capacity operation and controversy, Klausner Holding USA, owner of sawmills in Enfield, NC and Live Oak, Fla., filed for Chap. 11 bankruptcy in early May, claiming more than $100 million in debt, after the company’s Austria-based employees and executives were apparently “evacuated” to Europe in mid-March with no notice to U.S. employees as the coronavirus crisis expanded.

According to news and legal reports, the mills were closed abruptly in violation of several labor laws. Both sawmills were hit by default judgments in April for no-notice worker pay violations.

The reports paint a picture of employees who were essentially kicked to the curb in mid-March as their jobs and mills were abandoned by management and ownership officials who left the country. According to one report, the mills were left with “no ability to operate, no financing, and no liquidity.”

Once considered major investments courted by communities across the Southeast as the economy improved following the 2008-2009 Great Recession, the Klausner mills never got up to speed anywhere close to their respective 350MMBF capacities.

The Florida mill, which started out under a cloud of foundation issues and construction problems, began operating in 2015. The North Carolina sawmill started up in 2018 and was never able to move into full operation.

Despite drastically improved lumber markets from 2014 through much of 2018, news reports show that neither mill reached the full employment as projected in their respective economic development claims.

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