Graboyes - Chapter 11 Case Summary

Business Description

Headquartered at 171A Rittenhouse Circle, Bristol, PA 19007, Graboyes, LLC d/b/a Graboyes Commercial Window & Glass Solutions (the “Debtor”) is a premier commercial glazing and fenestration firm that has served the Greater Philadelphia and surrounding region with commercial and architectural custom glass and metal construction, service, and window installation for over 40 years.

• The Debtor’s offerings include commercial and historic window installation and replacement, unitized and stick-built curtainwall solutions, window wall systems, high-performance storefront solutions, building-integrated solar façade systems, and exterior and interior window coverings and controls.
• The Debtor has experience working with prominent Philadelphia area architects, developers, energy companies, general contractors, construction managers, and building owners as part of their design and construction teams.

The Debtor is registered to do business in Pennsylvania, New Jersey, New York, and Delaware.

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Corporate History

The Debtor’s ownership structure is as follows: non-debtor entity Graboyes Employee Ownership Trust owns 100% of Graboyes Holding Inc., which, in turn, owns 100% of the Debtor.

• Graboyes Holding Inc. is the holding company for the Employee Stock Ownership Trust Agreement, effective as of January 1, 2024.

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Operations Overview

From design to engineering and installation, the Debtor develops, produces, and installs window systems for historic restorations, new construction, and mid- and high-rise renovations. The Debtor’s clients’ projects include apartment buildings, schools, universities, hospitals, and condominiums, and the Debtor has assisted owners of hundreds of buildings in achieving the benefits of custom commercial window, door, and architectural glazing services and solutions.

Areas of Expertise and Certifications

• The Debtor’s areas of expertise include retrofit and design-build applications, service work, interior glass and protective barriers, historic replication, new construction, occupied space / white-glove installation, energy savings / energy performance contracting, comfort and operation, sound insulation, commissioning, service, maintenance and retro commissioning programs, historic tax credits, and asbestos / lead abatement.
• The Debtor maintains various construction, engineering, and consulting certifications, including North American Contractor Certification – Building Envelope, COSTARS Energy Consulting Supplier – Pennsylvania, Certified Asbestos Abatement Contractor – City of Philadelphia, Certified Asbestos Abatement Contractor – Pennsylvania, and Lead Abatement Certified – US EPA.

Workforce

As of the Petition Date, the Debtor employed approximately 27 full-time employees, consisting of 7 office staff and 20 field employees. The Debtor’s office staff are paid salaries, whereas its field employees, who are all union members, are paid hourly.

• The Debtor employs unionized installation crews of carpenters and glaziers who work directly for the Debtor, maintain OSHA 30 training, and routinely complete required testing for school and government projects.
• The Debtor pays its employees on a weekly basis, with payroll obligations generally including wages, salaries, and other compensation, including overtime, and payments on account of certain allowances. The Debtor’s payroll is approximately $62,659.14 per week, which also includes payroll taxes and union benefits.
• The Debtor offers employee benefit plans and policies, including health insurance, life insurance, dental, 401(k), and paid time off, as well as other benefits, including tuition reimbursement on a case-by-case basis, severance on a case-by-case basis, counseling services, and union-related benefits.

Cash Management

The Debtor maintains an integrated, centralized cash management system to collect, transfer, manage, and disburse funds generated and used in its operations, which, as of the Petition Date, includes four bank accounts.

• The Debtor’s proceeds from the collection of accounts receivable flow into its checking accounts with M&T Bank, N.A., Truist Bank, N.A., and Fulton Bank.
• The Debtor then directs certain of those funds from the M&T and Fulton Bank checking accounts into its Fulton Bank payroll account to issue ACH direct deposits for weekly payroll to the Debtor’s employees.
• The Debtor makes payments on its accounts payable through its M&T and Truist checking accounts.

Utilities and Insurance

• In the ordinary course of business, the utility services used by the Debtor include electricity and gas, for which the Debtor pays approximately $1,633.20 per month.
• The Debtor’s insurance policies and programs provide coverage related to, among other things, general liability, automobile liability, physical damage, warehouse legal liability, and a surety bond related to the Debtor’s wages.

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Prepetition Obligations

As of the Petition Date, the Debtor reports total secured and unsecured debt of $11,078,891.71. The Debtor reports approximately $6,287,257.50 in secured debt from short- and long-term loans and approximately $4,946,556 in unsecured debt obligations. The Debtor’s prepetition capital structure is summarized below.

Secured Debt — Truist

• On December 30, 2024, the Debtor and Graboyes Holding Inc., as borrowers, and Truist, as lender, entered into a Commercial Security Agreement (the “Security Agreement,” and together with the related loan and security documents, the “LC Loan Agreement”), pursuant to which Truist provided the Debtor with a $1,500,000 line of credit evidenced by a Promissory Note dated December 30, 2024. The Security Agreement includes a “Cross-Collateralization” provision.
• Also on December 30, 2024, the Debtor and Holdings, as borrowers, and Truist, as lender, entered into a Loan Agreement (the “SBA Loan Agreement”), pursuant to which Truist provided the Debtor with a $5,000,000 term loan evidenced by a Promissory Note dated December 30, 2024 and subject to the Terms and Conditions issued by the U.S. Small Business Administration on December 19, 2024, SBA Loan Number PLP 67035491-08, as modified in E-Tran.
• The obligations under the Prepetition Loan Agreements, including the LC Note and the SBA Note, are secured by first-priority liens on and security interests in substantially all of the Debtor’s right, title, and interest in its assets, including accounts, but not including real property, if any.
  • To perfect its interests, Truist filed UCC-1 Financing Statements with the Commonwealth of Pennsylvania, Department of State on December 30, 2024 (File # 20241230290238 and File # 20241230290248).
  • The Prepetition Liens are subject to any other valid, perfected, and unavoidable lien or security interest existing as of the Petition Date that is senior to Truist’s security interest.
• As of the Petition Date, the Debtor owes Truist $4,660,335.71 under the SBA Loan and $1,472,000 under the LC Loan, plus accrued and unpaid interest, fees, costs, and expenses.

Unsecured Debt and MCA Agreements

The Debtor’s unsecured debt obligations stem from its accounts payable with various vendors and from merchant cash advances. Prior to the Petition Date, the Debtor and certain related, non-debtor parties entered into agreements styled as a sale of future receivables (the “MCA Agreements”) with various entities (the “MCA Parties”), including Unique Funding Solutions LLC, SQ Advance, Meged Funding Group, QFS Capital, LLC, Alo Capital Group LLC, Highland Hill Capital LLC, LendBug LLC, Fund Now LLC, Quick Funding Group, LLC d/b/a Quick Funding Group, and PIRS Capital, LLC.

• In some cases, the Debtor was a guarantor of a non-debtor’s obligations under the MCA Agreements, and most of the MCA Agreements purport to provide the respective counterparty with a security interest in the Debtor’s accounts. Each of the MCA Agreements was executed after the LC Loan and the SBA Loan.
• Certain of the MCA Parties filed UCC-1 Financing Statements with the Commonwealth of Pennsylvania, Department of State, but all such statements were filed after the UCC-1 Financing Statements filed by Truist, the Debtor’s primary secured creditor.
• As of the Petition Date, the MCA Parties allege that the Debtor owes them an aggregate of approximately $812,000 as a direct obligation, and the Debtor is an alleged guarantor of an additional $1,314,000 of debt to certain of the MCA Parties.
  • Notwithstanding the filed UCC-1 Financing Statements, the Debtor maintains that the value of any alleged secured claim held by the MCA Parties is zero, given the outstanding amounts due Truist and Truist’s first-priority position in the collateral.
  • The Debtor reserves all rights, defenses, and claims related to the MCA Agreements, including the right to challenge the characterization and/or enforcement of the MCA Agreements.
• Prior to the Petition Date, certain of the MCA Parties, including QFS Capital, LLC, Fund Now LLC, and Unique Funding Solutions LLC, improperly sent notice (the “MCA Parties’ Notice”) to certain of the Debtor’s customers, vendors, general contractors, and other third-party business counterparties (a) alleging an ownership interest in accounts receivable due the Debtor (the “Prepetition Accounts Receivable”); (b) alleging rights as a secured party in the Prepetition Accounts Receivable; and (c) demanding the redirection of payments on the Prepetition Accounts Receivable.
  • As a result of these actions, certain of the Debtor’s business counterparties have “frozen” amounts due the Debtor and have refused to pay past-due Prepetition Accounts Receivable pending further resolution of the disputed issue.

Payroll Taxes and Unpaid Compensation

• As of the Petition Date, the Debtor estimates that it has approximately $128,000 in accrued and unpaid Employer Payroll Taxes.
• The Debtor owes $90,485.11 for prepetition earned payroll (the “Unpaid Compensation”). With the consent of Truist, the Debtor paid prepetition payroll on June 8, 2026 for the prepetition period of June 1, 2026 through June 5, 2026.

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Events Leading to Bankruptcy

Declining Bookings and Material Cost Volatility

In 2025, the Debtor booked projects worth $10 million, $9.25 million of which occurred in the first half of 2025, compared to projects worth $14.25 million booked in 2024. Beginning in April 2025, the costs of materials reached unprecedented levels of volatility for the remainder of 2025, with price increases to certain items, such as aluminum and glass, rising by as much as 15-20%.

• Due to economic policy uncertainty, credit availability stalled, which negatively impacted the design and financing of commercial construction projects.
• Beginning in July 2025, the Debtor saw estimating volumes decrease by 40%, from $18 million per month to $11 million per month or less.

Revenue Deterioration

Although the Debtor generated $9.4 million in revenue between January 2025 and June 2025, the worsening economic conditions caused the Debtor to generate only $3.1 million in revenue without any meaningful margin for the second half of 2025. This downturn in revenue is attributable to labor and material costs in excess of estimates across the majority of the projects the Debtor was executing.

Chapter 11 Filing

On June 5, 2026 (the “Petition Date”), the Debtor filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Eastern District of Pennsylvania, and it continues to operate its business and manage its affairs in the ordinary course as a debtor in possession.

• After considering alternatives, the Debtor determined that it must file the instant chapter 11 case to explore options to restructure its business.
• The Debtor believes that it will have sufficient cash flow from operations to remain current on its ordinary course obligations.