Receiver appointed for $1B North Pacific Group Inc.

The North Pacific Group Inc., Oregon’s third-largest private company, has been taken over by a court-appointed receiver after what appears to be at least three failed attempts to sell the company.

U.S. District Court Judge Anna J. Brown on Wednesday appointed Edward Hostmann Inc., a Lake Oswego-based financial advisory and crisis management firm, to take control of the company.

The move was requested by a consortium of lenders led by Wells Fargo Capital Finance Inc., which filed a lawsuit Wednesday against North Pacific and its subsidiaries, Nor Pac Enterprises Inc., RTH Lumber Co., and Burns Holdings Inc.

The lenders claim North Pacific, a distributor of building materials and wood products that once had $1.2 billion in annual revenue, was in default on its loans.

North Pacific and its subsidiaries owe about $42 million on what was originally a $160 million credit agreement signed three years ago. North Pacific eventually put its assets up as collateral to meet credit agreements, according to court documents.

North Pacific CEO Jay Ross did not return calls seeking comment. The company’s attorney also could not be reached.

A spokeswoman for Wells Fargo said the bank would not comment.

The privately-held Portland-based wood products company reached $1.2 billion in revenue in 2006, a figure that began to fall along with the nation’s home building industry.

By 2008, the company’s sales had fallen to $995 million, though it still ranked as Oregon’s third-largest private company by revenue. It employed 626 worldwide and 200 in Portland as of 2008, according to the Business Journal's Book of Lists.

In August, North Pacific announced that it had agreed to sell all of its stock to an unidentified “nationally-recognized private equity firm.”

In a news release at the time, Ross said the deal “better positions North Pacific as a leading wholesale distributor within North America.”

The deal was supposed to have closed during the fourth-quarter of 2009. Earlier this month, Ross said the company had trouble finding an attorney over the holidays “that wants to wrap this up.” He said the deal was expected to be completed by the end of January.

“We’re taking our time, they’re taking their time,” he said. “That’s alright with us.”

The news release announcing the private equity deal has since been removed from North Pacific’s Web site.

According to court documents, deals to sell North Pacific’s assets failed three times in the last six months.

On Jan. 12, Wells Fargo sent the company a letter giving North Pacific a Jan. 15 deadline to sell its assets before the lenders would cease funding the loans.

In the letter, which was filed as part of the lenders’ lawsuit against North Pacific, Wells Fargo said it received notice that a company named BlueLinx was no longer willing to buy North Pacific’s assets on previously agreed upon terms.

“We note that this is the third transaction that would have provided for the payment of the obligations to the lenders that has failed to materialize in the past six months,” wrote Amy Newman, vice president of Wells Fargo Capital Finance Inc.

The BlueLinx referenced in the letter appears to be Atlanta-based BlueLinx Holdings Inc., the nation’s largest building products distributor with $2.8 billion in revenue.

A BlueLinx official did not return a call seeking comment.

North Pacific is now in the hands of Edward Hostmann Inc. The firm’s Web site says it has experience in “virtually every aspect of business turnaround, recovery and liquidation.”

Edward Hostmann, the firm’s principal, could not be reached for comment.