Why Did 'Fast Growing' R.F. Fisher Electric Contractor Shut Down?
A bank that made recent loan is in federal court seeking repayment
The website of R.F. Fisher Electric Co. still touts the firm as “one of the fastest growing companies in the Midwest.”
But today, the only thing growing as it relates to R.F. Fisher are the legal bills of the lawyers hired by its erstwhile lender, Bank Midwest. It is attempting to claw back some of the millions the once-substantial Kansas City, Kan.-based electrical subcontractor borrowed over the years before it abruptly shut its doors in September.
In a complaint filed in U.S. District Court in Kansas City, Bank Midwest contends R.F. Fisher owes it more than $11.4 million. That includes $1.8 million in bank overdrafts as the company struggled to keep open. At the request of the bank, a court-appointed receiver is now managing the process of unwinding the 43-year-old firm’s remaining assets and recovering some the money borrowed.
The demise of R.F. Fisher, which just two years ago employed more than 300 and was listed as one of the metro area’s largest electrical subcontractors by the Kansas City Business Journal, appears to have played out over the course of several months in mid-2019. Although the company’s owners and top managers could not be reached for comment about the company or their careers, their biographies still grace the company’s website, as does a list of impressive projects completed at places such as the Kansas City International Airport and the Children’s Mercy hospital.
The lawsuit filings tell some of the story. Not even a year before it stopped operating, R.F. Fisher, a union contractor according to public documents, inked an $8.7-million loan agreement in September 2018 with Bank Midwest, a division of NBH bank based in Overland Park, Kan. However, by mid-May, the subcontractor was in trouble, with the bank having informed the subcontractor, whose projects included a new hotel next to the city’s convention center, that it was in default on the $8.7-million loan as well as a number of smaller loans, some in the hundreds of thousands of dollars, inked over the past few years. Bank Midwest and R.F. Fisher entered into a “standstill agreement” in which the bank held off on enforcing the loan agreements in order to give the subcontractor time to regroup and get its finances back on track.
But by September, the subcontractor’s financial and cash flow issues came to a head, with R.F. Fisher’s overdraft surpassing $1.8 million. The company was unable to make payroll or pay its required contributions to union health and pension funds.
It isn’t known whether the speed with which R.F. Fisher said it was growing had a role in its failure. Exactly what led to the company’s demise is not clear, said Rick Coltrane, owner of St. Louis-based Coltrane Systems. After hearing of the firm’s demise, Coltrane immediately hired 19 R.F. Fisher workers to open his firm’s first Kansas City office.
Still, Coltrane said his impression is that it was a case of the owners taking their eye off the ball for a number of years, as opposed to over-expansion in a hot economy. Fast growth had given way to quick shrinking. When it closed down, R.F. Fisher had 130 employees remaining on its payroll, down from over 200 the year before, Coltrane noted, and down from 300 in 2017, according to a legal filing in a lawsuit the firm settled with a former employee last year.
Coltrane said he can’t recall a contractor as big as R.F. Fisher suddenly shutting down since the Great Recession. “In an economy like this, with a company with millions of dollars on the books, it is pretty surprising,” he said.
Most if not all Fisher staffers landed jobs and were absorbed by other firms within days of the company’s shutdown, Coltrane said. In fact, when he learned from a mutual customer—the new convention center hotel—that R.F. Fisher had shut its doors, Coltrane jumped on a flight to Kansas City in order to hire the firm’s employees while they were still available.
But Coltrane was impressed by R.F Fisher employees’ dedication to their work and projects. Even as their paychecks bounced, many showed up at the jobsites to square away loose ends.“They had a really good field staff,” said Coltrane.
Along with hiring some of R.F. Fisher’s former employees, Coltrane said he has also taken over some of the subcontractor’s jobs, including its work on the Loews Kansas City convention center hotel project.
It took roughly two weeks to negotiate new or amended agreements with general contractors and project owners, with the newly augmented crew going gangbusters since then to catch up. “We have put in a lot of overtime for our first week back and got caught up to where we were supposed to be,” Coltrane said. “Things are going well.”
Meanwhile, R.F. Fisher’s ghostly website lives on. The address still reads 1707 West 39th Avenue. The phone number is still 913-384-1500. “We’d love to hear from you,” the contact page states. “If you’re interested in learning more about what we can do for you, or you’d just like to say hi.”