The remnants of a bankrupt local sign maker and printing company have been given new life.
Acorn Sign Graphics recently reopened for business under the ownership of Pennsylvania-based competitor iSign, after a bankruptcy court-ordered auction spurred by Acorn’s abrupt closure and Chapter 7 filing in February.
iSign President Sam Morgan scored the winning bid on the Acorn name, website and other equipment and intellectual property during the competitive auction held in May, which generated $240,000 in proceeds for the ongoing Acorn bankruptcy estate.
Morgan said his revival of Acorn includes hiring back at least some of the company’s former employees and opening a new Acorn office in the Richmond area at 405 E. Laburnum Ave.
“We’re bringing back key employees,” Morgan said, adding that Acorn had more than 40 workers at the time of its shuttering. “We have two so far and will start with a small office. We’re hoping to stay in Richmond and bring the company back.”
While iSign now owns the Acorn name, the shell of the old Acorn remains in liquidation at the hands of bankruptcy trustee Bill Broscious.
Broscious hired Richmond-based auction house Dudley Resources to carry out what was initially planned as a two-pronged approach to a sale to generate cash for Acorn’s creditors.
The first option was to try to find a single buyer for the entirety of Acorn’s business and assets. When that didn’t pan out, option two was put in play to sell off assets in a piecemeal fashion at a public auction.
Morgan said the auction was competitive and multiple bids kept driving up the price before he ultimately won the pieces he needed.
He and iSign paid $17,800 for the Acorn name and web domain and $77,000 for Acorn’s “total business enterprise system.”
He said that system includes all of Acorn’s records of accounts and client graphics — a big get in the signage world.
“The most important is the graphics file. That’s a key thing in our business. If you’re calling me saying ‘Hey, Sam, I want another sign,’ the most important thing is how was that original sign made,” Morgan said.
Founded 23 years ago and based in Boyertown, Pennsylvania, northwest of Philadelphia, iSign designs, manufactures and installs signs on commercial buildings.
Its business is mainly in the Mid-Atlantic and Northeast. Morgan said reopening Acorn is a relatively seamless process for his company and gives iSign an immediate foothold in a new territory.
“Our business model is very similar to Acorn, which makes it a very good fit. It’s an easy integration,” Morgan said. “We have been working all the way down to D.C., but never in Virginia.”
While Morgan and iSign won the bulk of the big-ticket items, other buyers emerged at the auction to purchase a myriad of supplies and equipment.
Among them was Evan Pettrey, founder of printing company Converge, which has offices in Richmond and the Shenandoah Valley. Pettrey said the company spent around $30,000 at the Acorn auction for equipment that will be split between its two offices.
Pettrey’s big-ticket item was a CNC router, used to make custom sign cutouts. The price tag for that was $16,000.
As for other former Acorn employees, at least some have been hired by other sign companies in the area.
Local shop Carousel Signs and Designs hired five former Acorn folks, according to Vice President Jay Foley.
Foley said the group includes two sales reps, a designer and two installers who were hired within six weeks of Acorn’s initial closure.
He said the new hires were a welcome addition to get Carousel’s ranks up to 23 during a busy time and a tight labor market.
“We were growing anyway and it’s so hard to find qualified and experienced sign people. It was sad for them and it’s like a huge gift for us.”
Foley said Acorn’s absence from the market also left plenty of extra work to be picked up by his firm and other competitors.
“Acorn was a big company, so a lot of that work had to get redistributed and it has certainly impacted myself and other sign companies in Richmond,” he said.
Broscious, Acorn’s bankruptcy trustee, continues to mine for money for Acorn’s creditors.
Acorn’s fall into bankruptcy came after nearly two decades under the ownership of husband-and-wife Steve and Beth Gillispie. Just five years ago it was named to the Inc. 5000 list of the nation’s fastest growing companies with $6 million in revenue.
Acorn said its demise was due in part to a dispute with one of its biggest customers, Henrico-based LL Flooring. Acorn stated in bankruptcy filings that it is owed more than $1 million from the publicly traded flooring retailer.
While the two sides disagreed on who was owed money in the contract dispute, a settlement was reached earlier this month by which Lumber Liquidators will pay $385,000 to the Acorn estate. The resolution settles any disagreements without either side admitting fault.
Broscious is represented in the Chapter 7 proceedings by attorney Jeremy Williams of law firm Kutak Rock. In addition to the auction proceeds, Williams said the money from LL Flooring will be pooled with $446,000 of cash already on hand in the estate.
“We’re pretty excited to have reached what we think is a good resolution for the estate,” Williams said.
He added that the estate’s main creditor, Virginia Community Capital, will be paid what it’s owed in full, with some funds remaining for unsecured creditors.
Williams said work continues to recover some accounts receivables and potentially additional funds from a lawsuit filed against one of Acorn’s former vendors.