Powers Lake Construction files for bankruptcy (UPDATE)
Jerry Kerkman, an attorney with Milwaukee-based Kerkman & Dunn representing Powers Lake Construction, said the construction and excavating contractor expects to know by July the details of a proposal to restructure more than $7 million in debt.
“In today’s economy, we’re just not making money hand over fist,” Kerkman said. “We expect to see more work in the summer and take advantage of an uptick in the economy. But if it goes in the toilet more, the business goes under.”
The company filed Wednesday for reorganization and protection from creditors.
Kerkman said Powers Lake Construction needs to line up roughly $9 million in contracted work in 2010 to stay afloat. The contractor, he said, already has about $2.8 million in contracts guaranteed, and likely will have to win the rest of the work through bidding.
Powers Lake Construction is a member of the Wisconsin Underground Contractors Association. WUCA Executive Director Richard Wanta said Thursday he was unaware the company had filed.
“It’s unfortunate,” he said. “They’re a very good company and an employer that pays family supporting wages. But in this economic climate, it’s not a big surprise.”
A Powers Lake Construction representative declined to comment beyond referencing a Thursday press release about the company’s Chapter 11 filing.
According to the company’s Web site, Carl F. Karow Sr. founded Powers Lake Construction, which was incorporated in 1956.
Kerkman said the contractor employs about 45 full-time workers, though the size of the work force usually increases during summer and includes members of the International Union of Operating Engineers Local 139.
The company’s plan for the time being, Kerkman said, is to continue day-to-day operations. But, he said, Powers Lake Construction now will turn away from residential development and focus on Wisconsin Department of Transportation projects, wastewater-treatment plants, municipal sewer and water mains projects, and site development.
“The business has work and is going to be operating through the summer,” Kerkman said. “After that work is done, we’ll see what’s on the horizon.”
Kerkman would not provide details of projects the company has lined up or anticipates working on this summer, but he said the contractor is confident it can achieve $9 million worth of work.
“We’re not anticipating going under,” he said.