Kelly-Moore Paints, one of the largest paint companies in the nation founded in San Carlos nearly 80 years ago, is going out of business nearly two years after changing ownership, officials announced in a press release.
Legal battles over asbestos in cement and texture products over the last three decades have prompted the closures of the company’s 157 stores, including dozens of locations in the Bay Area. About $600 million has been paid out over the past 20 years to settle asbestos claims but a recent study by the company found that future liabilities could exceed about $170 million.
“I’m extremely disappointed and saddened by this outcome, as the entire Kelly-Moore team made incredible efforts to continue innovating and serving the unique needs of professional painting contractors,” CEO Charles Gassenheimer said in a press release. “The ownership group’s commitment from day one was to fix the business if we could. Sadly, no matter how great the Kelly-Moore team, products and reputation for service, we simply couldn’t overcome the massive legal and financial burdens that have been weighing on the Company for many years.”
Since its founding in 1946 by William H. Kelly and William E. Moore, Kelly-Moore Paints has grown from a single shop in San Carlos to 157 locations across the nation, employing more than 1,200 people. The company changed ownership in 2022 when it was acquired by Flacks Group, a Miami-based global investment firm, and was in the process of moving its headquarters from San Carlos to Texas.
The company was searching for investors to help keep the business in operation but interested investors had not signed onto letters of intent, leaving Kelly-Moore without the additional funding needed to remain open. A bankruptcy reorganization or in-court liquidation were not viable options either, according to the press release.
Gassenheimer lauded the company’s staff and customers for supporting Kelly-Moore over the years. As the company winds down operation, it intends to fulfill as many previously placed orders as possible using inventory in the Union City distribution facility. All other Kelly-Moore facilities have been closed effective immediately.
About 700 employees were also furloughed earlier this month. The company said it plans to fully compensate employees for regular time workers and will work to pay all accrued benefits.
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