The Kane Co., a family-owned moving company based in Elkridge, filed for Chapter 7 bankruptcy last week, shortly after its CEO said strained finances would force the firm to close, laying off about 900 workers in the region.

In a Chapter 7 filing, a trustee winds down the business, selling assets to distribute to creditors.


Kane and its affiliates owe about $8.8 million to more than 700 entities, including nearly $6.5 million in unsecured claims. About $233,400 of those unsecured claims are tied to employees.

The firm also faces several pending lawsuits over contracts.

The trustee appointed to handle the bankruptcy did not respond to requests for comment. An attorney from Saul Ewing LLP, which was representing Kane Co. in the bankruptcy filing, referred questions to the trustee.

The Kane Co.'s revenue has steadily declined since 2014, when the firm took in about $58.2 million, according to documents filed in connection with the bankruptcy. That fell to about $49 million last year and $38.8 million through most of 2016.

CEO John M. Kane said business has grown more difficult, as firms using less office space needed to move less furniture. He said the final straw came when new facilities the company was planning to move to weren't ready as expected in October 2015, forcing the firm to make about $2 million in unexpected investments to cover the gap.

Weleski Transfer, a Pennsylvania moving company, filed suit in U.S. District Court in Pittsburgh in December seeking to collect nearly $100,000 it says Kane owes for warehousing and other services. The firm has been trying to collect the full amount for months, according to the document.

"Will there be any assets left after the banks and secured creditors? I have no clue," said F. Lynn Thompson, a vice president at Weleski, which had worked with Kane for several years. "Past experience tells me that typically there's not much left at the end. I'll be hopeful there will be."

The Kane Co. claims assets of about $15.8 million. Creditors, who are scheduled to meet Jan. 23, must submit proof of claim by March 27, according to a filing by the court-appointed trustee.

Since the firm's troubles were made public, at least two moving companies — JK Moving Services and Suddath — have stepped forward to say they were working on deals for parts of the business.

Kane said he hopes the trustee will be able to sell the archives and shredding businesses, deals that had been in motion before the bankruptcy. At that time, they would have yielded about $1.7 million, he said.

Separate Baltimore-area companies that are owned by John Kane's siblings, including Kane Construction, Kane Real Estate and International Limousine Service, are not affected by the Kane Co. closure.

John Kane has been a leader in state Republican circles.

He chaired the Maryland Republican Party during the administration of GOP Gov. Robert L. Ehrlich Jr. His wife, Mary, was Maryland's secretary of state under Ehrlich, and ran for lieutenant governor as Ehrlich's running mate in 2010.

This is not the first time his company has run into trouble.


In 2005, a former employee filed suit against the firm alleging federal contract fraud claims later seconded by federal prosecutors. That suit was settled in 2012 and Kane said it had little impact on business.

In September, a federal lien was filed against the Kanes for about $486,000 for unpaid income taxes and penalties dating to the 2014 tax year, according to a filing in Montgomery County Circuit Court. Kane said the lien stems from The Kane Co.'s troubles, because the company is structured as an S-corporation, which passes tax obligations onto shareholders.

Other Kane Co. affiliated companies that filed for bankruptcy include Office Movers, Office Shredders, Kane Office Archives, Kane 3PL and Circle K-1 Realty.

This story has been updated with comment from John Kane.