KLN Manufacturing, a longtime San Antonio maker of of furniture for military barracks, universities and hospitals, is shuttering its local operations next month.
The closure of KLN’s manufacturing plant at 2 Winnco Drive on the Far Northeast Side was disclosed in a news release Tuesday by a California company that plans to conduct an online auction for KLN’s assets at the end of the month.
Kelly O’Donnell, a KLN executive, couldn’t immediately be reached for comment.
The closing of the 275,000-square-foot facility follows the November bankruptcies of two related companies, KLN Steel Products Co. and its Dallas-based parent company AGS Enterprises Inc., which does business as Avteq Inc. Each filed for Chapter 11 in the U.S. Bankruptcy Court in Dallas.
At the time, O’Donnell issued a statement that KLN Manufacturing had not filed for bankruptcy and would “continue to manufacture products, service customers, employ great people, and pay vendors.”
O’Donnell added, “Our intention is to move forward with KLN Manufacturing’s core business and focus on servicing our customers and strengthening relationships with our vendors.”
KLN Steel, AGS, O’Donnell and her father, John O’Donnell, were previously sued in a whistleblower lawsuit that alleged they defrauded the federal government out of millions of dollar.
The complaint, initiated by Indiana-based rival University Loft Co. in 2014 in San Antonio federal court, accused the defendants of bid-rigging, artificially inflating costs and falsely certifying that products were made in the U.S. when in actuality they were made in Colombia, among other charges.
O’Donnell has said the charges are untrue.
The court docket shows the case was closed pending the bankruptcies in Dallas.
“The lawsuit was filed with the sole purpose of destroying our company through the extreme legal costs of defending against University Loft’s claims,” O’Donnell said in her November statement.
San Diego-based Heritage Global Partners announced it will manage an online auction of KLN Manufacturing’s assets starting Jan. 31. Among the assets are engine lathes, drill presses, hand tools and tens of thousands of metal stack chairs, lockers, wardrobes, nightstands and tables.