An ambitious dyehouse business in Saco that promised to save the area’s textile industry from extinction is now at risk of shutting down because of financial problems.

Maine Textiles International LLC, co-owned by entrepreneurs Claudia and Kenneth Raessler, is headed for a courtroom showdown with the owner of its manufacturing facility. Developer Kevin Bunker of Portland-based Developers Collaborative is seeking to evict the business from his property for failing to make timely payments.

In February, Maine Textiles filed for Chapter 11 bankruptcy in an attempt to delay the eviction long enough to work out its lease dispute and settle more than $1 million in outstanding debts. Chapter 11 bankruptcy is for businesses that seek to restructure their debt while remaining in operation.

The eviction dispute has since been spun off from the bankruptcy proceeding into a separate case that is pending in Maine District Court in Skowhegan. The primary matter to be adjudicated is whether Maine Textiles had a legal right to use bankruptcy as a means of staving off the eviction. A hearing in the case is scheduled for Monday.

Claudia Raessler said in an interview Monday that the company, which does business as Maine Dye & Textiles and was previously known as Saco River Dyehouse, is still open and has solved the operational problems that led to the bankruptcy and is now current on its lease payments. She said the company mismanaged a major expansion effort in 2016, but is now taking on multiple new clients each week and growing its revenue at a rapid rate.

“We just want it to stay open, keep people employed (and) be a success story,” Raessler said about the business, which employs a dozen people, including several recent immigrants to Maine.

The bankruptcy filing states that Maine Textiles’ largest debt owed to an unsecured creditor is $55,492 owed to Central Maine Power Co., followed by $37,532 owed to Biddeford-based Sterling Rope Co., according to the filing. An unsecured creditor is one for which the debt owed is not backed by any collateral such as real estate or equipment.

Claudia Raessler, managing director of Maine Dye & Textiles, photographs the new package dye machine after its delivery in July 2016. Shawn Patrick Ouellette/Staff Photographer

A court financial report states that the company suffered a net loss of $756,000 in 2018. Another document filed by creditor Bangor Savings Bank states that “upon information and belief” Maine Textiles has never turned a profit since it opened in late 2012.

GROWING PAINS

The company, which operates a dyehouse-for-hire that dyes wool and other textile fibers for a variety of customers, originally opened in December 2012 in the Pepperell Mill Complex in Biddeford, occupying the space formerly inhabited by WestPoint Home, a blanket manufacturer that closed in 2009. WestPoint’s closure had temporarily brought an end to Biddeford’s 150-year textile manufacturing tradition.

The idea to bring the dyehouse to Maine was sparked after the closure of the JCA dyehouse in Pepperell, Massachusetts, forcing Maine yarn producers to look elsewhere for dyeing services.

Claudia Raessler, a licensed attorney who already owned the alpaca fiber company Suri Paco, contacted Pam Allen of Portland yarn-maker Quince & Co. about the possibility of acquiring JCA’s assets and opening an organic dyehouse in Maine. After the JCA dyehouse closed, Allen had been forced to ship her wool yarn to Philadelphia to be dyed, which was more expensive.

Allen and Raessler teamed up with Raessler’s husband, Kenneth, and investor Nicholas Burnett to form Maine Textiles and run the dyehouse.

In 2016, the company underwent a major expansion that involved purchasing $750,000 worth of new equipment with a loan from the Maine Technology Institute and relocating to the former Franklin Fueling Systems facility at 34 Spring Hill Road in Saco.

Maine Textiles purchased the 25,000-square-foot facility and then sold it to a company owned by Bunker called White Rabbit LLC via a sale-and-leaseback agreement, in which Maine Textiles would become the building’s sole tenant.

Don Morton carries yarn to a hydro extractor in 2012, when Maine Dye & Textiles, formerly the Saco River Dyehouse, first opened in Biddeford’s Pepperell Mill Complex. The operation moved to Saco in 2016.

Claudia Raessler said the company’s financial problems began when the expansion effort did not go as planned. She said Maine Textiles had expected to ramp up to full production on the new equipment by the beginning of 2017, but it ended up taking a lot longer than that.

“We did not have the right kind of production expertise in place,” she said.

A management change resolved the issue, Raessler said, but that didn’t occur until May 2018. By the end of 2018, the company had experienced a complete turnaround, she said, but by then it had run out of working capital to pay its bills. It did, however, manage to keep payroll going.

“We’ve never not paid people,” Raessler said. “It’s been challenging at times, but everybody has gotten paid.”

Raessler is optimistic about Maine Textiles’ prospects for emerging successfully from bankruptcy. She said the company already has met with its creditors and is working on a debt-restructuring plan that the creditors would have to approve.

She seemed less certain about what will happen in the legal dispute with Bunker, the company’s landlord, who declined an interview request for this story.

“Whether we prevail or they prevail, what our relationship looks like on the other side is yet to be determined,” Raessler said.

J. Craig Anderson can be contacted at 791-6390 or at:

canderson@pressherald.com

Twitter: jcraiganderson

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