In 2024, after 78 years in business, Kelly-Moore Paints shut down and closed its 157 stores nationwide.
For over 30 years, the company had been grappling with thousands of asbestos litigation claims related to the company’s past use of asbestos in cement and texture products under prior ownership, a practice that was discontinued in 1981. Through the cumulative cash drain caused by legal settlements and the cost of defending ever-continuing case filings, the company’s ability to reinvest in the business – including investments needed to address historical supply chain challenges that were exacerbated by the pandemic – had been severely constrained for an extended period of time. Despite paying out approximately $600 million over the past 20 years to settle asbestos claims, a study commissioned by the company estimated future asbestos liabilities exceed $170 million.
Largely due to the asbestos litigation overhang, it was impossible to attract any additional funding or interest to recapitalize, restructure or reorganize the business. Ultimately, the company’s leadership team determined with the assistance of outside advisors that the company was financially unable to continue operations.