Why Did 'Fast Growing' R.F. Fisher Electrical 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, Ka.-based electrical subcontractor borrowed over the years before it abruptly shuts 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 a massive, $1.8 million overdraft by the company on its various accounts at the bank as it struggled to keep its doors open.
At the request of the bank, a court appointed receiver is now managing the process of unwinding the 43-year-old company’s remaining assets and recovering some the money borrowed.
The demise of the firm, 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.
The company's owners and top managers could not be reached for comment. But 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.
Not even a year before, R.F. Fisher inked an $8.7 million loan agreement in September 2018 with Bank Midwest, a division of NBH bank based in Overland Park, Ka.
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 overdrafts surpassing $1.8 million and subcontractor unable to make payroll or pay its requirement union contributions.
There are few hints so far about why R.F. Fisher fizzled. Exactly what led to the company’s demise is not clear, said Rick Coltrane, owner of St. Louis-based Coltrane Systems.
Nor is it clear whether the speed with which the company said it was growing had a role in its failure.
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.
In fact, R.F. Fisher has been trying to steadily downsize its operations to get a handle on its financial problems. When it closed its doors, it had 130 employees remaining on its payroll, down from over 200 the year before, Coltrane noted.
That, in turn, was down from roughly 300 in 2017, according to a legal filing in a lawsuit the company settled in 2018 with a former employee. A receptionist for the company had filed suit in 2017 for more than $75,000, arguing she and her administrative colleagues routinely worked over 40-hours a week but were not paid overtime.
Whatever the cause, R.F. Fisher’s collapse is unusual. Coltrane said he can’t recall a sizable contractor like 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,” Coltrane said.
A tight labor market has worked to the advantage of R.F. Fisher’s former employees, with most if not all having landed jobs at other firms within days of the company’s shutdown, Coltrane said.
In fact, when he learned from a common 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 said he was also impressed as well with the dedication shown by the R.F Fisher employees, who, even as their paychecks bounced, had shown up at the job site to square away loose ends.
“Almost all of their employees were absorbed by other companies,” Coltrane said, “They had a really good field staff.”
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 at 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 his 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 we can do for you, or you’d just like to say hi."