So after our coil supplier cancelled the agreed upon consignment program without our knowledge and called several invoices due now, Adam made a phone call and asked what was going on. He wanted all the facts on the table. (To recap part 1 click here!)
Basically he was told we owed them too much money and things weren’t being paid off fast enough and they don’t trust us anymore. By the end of the conversation, we learned not only are the full invoices due, the whole past balance is also due. Now.
Sell what you have to and get us up to current was the gist of the conversation.
Adam tried reason and logic. He recapped how we had done everything they had asked us to do. When they changed the pay-off plan, we agreed, never trying to get out of paying off the entire balance. And our account was current according to the agreed upon arrangement.
He also reminded them they had all our financials which proved that we did not possess the money to pay them off right now but were doing everything in our power to work toward that goal. But there was NO WAY that would happen NOW.
That’s when things got ugly.
The owner of the coil company told Adam that he didn’t care. If we couldn’t pay the full amount now, he would file a lawsuit against us and force us into liquidation. He said if he could get ten cents on the dollar out of us it would make him happy. Even if that meant putting us out of business.
That let us know real quick what we were dealing with. Somehow this had turned personal. It was no longer about paying off a past due balance. There was vengeance behind it! Because basically his plan was to force us into bankruptcy.
That phone conversation was in late July of 2018. About a month later we were served papers.
Adam and I sat down with a lawyer to discuss our options. One of which, as far as it depended on us was NOT to file bankruptcy. We did not feel that was what we should do. It would clear our balance yes, but we owed this money and intended on paying back every cent.
We did however need counsel for what our options were. Could they really shut us down? Was there anything we could do to buy some time?
Even as we talked this over with the lawyer who knew nothing of us or our company, he clearly saw the vengeance behind the suit and couldn’t believe their strategy.
Now I’m going to back up a little bit because there’s a new vein to the story that comes into play here.
Also in 2013 we bought a company in Sanger, Texas called Ameristeel. They manufactured a line of steel horse barns called Ameristall, which we still produce today. In 2017 the lease on this building and property expired and we had the option to purchase it, which we wanted to do.
It was actually supposed to expire in 2016, but literally at the last minute a lawyer noticed a grey area in the original lease paperwork that made them postdate the contract to 2017. Which gave us extra time to find money for the down payment.
Finding cash for the down payment was a big deal. Adam was convicted by the Lord several years before not to take on any personal surety. Period. Whatever growth we would experience would be paid for in cash. That included machinery, trucks, repairs, gas, equipment, EVERYTHING. Cash only. No business loans, no lines of credit. Extreme, huh?!
But the Lord knows it’s easy to finance things these days. He wanted us to trust HIM for the provisions for what He calls us to do. He provides for what He calls us to do. It was very clear: we were to take on no more debt and work hard to pay off our existing debt.
Even though the owner of the Sanger property was willing to owner finance on a no recourse basis, we still didn’t have the cash for the down payment.
Adam here…. small explanation on finances. Personal surety means that you sign for something personally (over an above the collateral). Non-Recourse means that the property is the sole collateral to secure the loan. It is more like an investment. If something goes sideways and you can’t pay back the note, then the property goes back to the one who financed the deal and you are out what you have paid to that point, but no more! No bank that I know of will give a Non-recourse loan. Recourse means that they can reposes the collateral if you can’t pay, sell the collateral, and sue you personally for any shortfall.
So six months before the lease ran out, Adam had lunch with a friend who also does some contract work for us. They discussed a project they were working on together, and then chatted personally.
This guy does some house flipping and property investments, so Adam asked how those were going. Then Adam told him about the investment opportunity for buying the Sanger building. It had just appraised at double what the locked in option price was. The asking price had been set when we purchased the business and started the original lease 5 years ago, and it had increased in value significantly over those years.
The friend saw the great investment potential. Then Adam told him he might have to walk away from it because we didn’t have the down payment money in cash. The friend asked how much it was. Adam told him the price. The guy smiled and said, “What if I gave you the money to invest?”
Adam’s jaw hit the floor. “What?” Adam said.
The guy said, “I just sold a house and made that exact amount in profit. My wife and I have been praying about how to invest it.” “WOW,” is all Adam could say. “Yes. That’d be awesome!! Let’s talk about it.”