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Industry & Trends

Manufactured Building Firm Katerra Enters Chapter 11

Houston, TX—Katerra, the fast-growing manufacturer of factory-built homes and other structures, voluntarily filed for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas.

Many of Katerra’s projects use wood construction componentry, including mass timber. In the past few years Katerra rapidly expanded a network of factories to produce cabinetry, windows, and laminate products, and launched its own Kova brand for cabinets. Recently it opened a 577,000-sq.-ft advanced manufacturing facility in Tracy, CA, with fully-automated production lines for wood-framed walls, floor trusses, and roof trusses. The plant also features cold-formed steel production, automated cabinet and finish areas, and a highly sophisticated window line. It can produce, on an annual basis, the equivalent of 12,500 multifamily units.

Katerra also secured $35 million in debtor-in-possession financing from SB Investment Advisers (UK) Limited to fund operations during the Chapter 11 process. It also arranged for the sale of its Renovations and Lord Aeck Sargent architecture businesses to private buyers, subject to Bankruptcy Court approval. Its international operations are not affected by the filing.

Katerra says the rapid deterioration of its financial position is the result of the macroeconomic effects of the COVID-19 pandemic on the construction industry, inability to procure bonding for construction projects following the unexpected insolvency proceedings of Katerra’s former lender, and unsuccessful attempts to secure additional capital and business. Katerra intends to file customary motions with the Bankruptcy Court requesting authorization to continue paying remaining employees, vendors, and others in the ordinary course of business moving forward.

“While a number of negative factors have led to Katerra’s current challenges, we are implementing initiatives on multiple fronts to maximize value and provide the best path forward for Katerra and its many stakeholders,” said Chief Transformation Officer Marc Liebman. “Our multi-step action plan has rapidly evolved and includes consolidating U.S. activities, continuing our international businesses, advancing key asset sales, securing DIP financing, and commencing an in-court restructuring process. We are grateful to the extraordinary ongoing work and support of the Katerra team and other core constituencies through this extremely difficult time.”

Following a thorough review of its strategic alternatives, the company is currently proceeding with certain active projects in a number of states. Katerra recently notified its key stakeholders that many of its U.S. projects will be demobilizing. In keeping with Katerra’s ongoing commitment to the safety of the site and the general public, the company is working to ensure a safe transition.

Katerra has hired Kirkland and Ellis as legal advisor, Houlihan Lokey as investment banker, and Alvarez & Marsal as financial advisor to work with the management team to conduct a marketing and sale process for its assets to maximize value for Katerra’s stakeholders and otherwise facilitate the orderly wind down of its business. Members of the financial advisor firm have assumed officer roles at the company and are working with regional business unit leadership to manage day-to-day operations.

For Court documents or filings, along with additional information about the case, please visit


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