Centralite, an Alabama-based connected products company, filed for Chapter 7 bankruptcy last month. The company had been a mainstay of early connected home systems such as Lowe’s Iris, Zonoff’s, and even early iterations of Comcast’s smart home service. It made everything from sensors and thermostats to keypads and lighting systems.
But in early February, it filed for Chapter 7 protection in the U.S. Bankruptcy Court in the Southern District of Alabama, seeking to dissolve its business. In U.S. law, companies file for Chapter 7 or Chapter 11 bankruptcy. Those filing for Chapter 11 are seeking to reorganize their debts, repay them, and re-emerge, while those filing for Chapter 7 are seeking an orderly dissolution of their business, which involves selling their assets to cover their debt.
Centralite had been providing products to the home automation world since 1997, when it launched a whole-home lighting control system. In 2007, it launched a ZigBee-based lighting system and began branching out into other home automation products sold into the hospitality and, eventually, the cable business.
Customers included iControl (which sold home automation systems to cable providers and was later purchased by Comcast), Comcast, and Lowe’s Iris system. Originally, I suspected that the death of Lowe’s Iris system was behind the bankruptcy, but it turns out that most of the firms’ customers — including Lowe’s — stopped using its gear years before the bankruptcy filing.
Comcast used to rely on Centralite for its keypads and a lamp module, but swapped out keypads a few years back. It does still offer a Centralight module to remotely control lamps on its site, but a source who didn’t want to be named inside Comcast said the company would look at replacing that module with one from another vendor.
Centralite reported (PDF) debts between $1 million and $10 million and assets of less than $50,000.
Calls to the lawyer representing Centralite were not returned. Messages left on the Centralite accounting voicemail were not returned. Companies who want to file a claim against Centralite have until May 28 to do so. Creditors include Arrow Electronics, American Express, Google, DigiKey, and company executives.
Stacey
This is your big break, you should be all over this story, the history, why did it happen, what can the industry learn from this Chapter 7, who are the investors, who are the debt holders. This kind of investigative journalism is what can catapult your site to a wider audience, it might get picked up by a large media outlet.
I am one of the original founders of CentraLite along with my son Jimmy. We were gone for two years before the bankruptcy. The company was screaming in the upward direction at a run-rate of $70M annually when a large shareholder decided they didn’t like how we were running the company and proceeded to initiate a series of what we believe to be onerous actions which eventually destroyed the company. They took over in December 2016, removed us as execs, and installed a clueless CPA to run the company. Sales dropped from $35M in 2016 to $7M (and a $5M loss)in 2017, then $4M in 2018, then chapter 7. We had previously initiated a handshake deal to sell the company for $100M, but failed to close.
We have written a white paper with the basic history of the company, year by year revenue charts, and a complete history of how they, in our opinion, killed a very strong company. I would be happy to share that with you. My email is: JimBusby1946@gmail.com and if Stacey reads this comment, I would be happy to email or talk with her. Bidding for the assets will be May 15, 2019, and we will definitely be a bidder. Thanks
When will you know something? i installed Jetstream in my home 8 years ago and love its simplicity. I am building a new house and today my rep called to o order 20 3 button switches ans was told the bad news. What is upsetting is that he called them a week ago and nothing was mentioned. They do not have 20 3 bottoms in stock to sell me. Very Disappointed.
Therr is nothing else out there that is as simple and easy to install and use.
We are the founders of CentraLite. The company was taken over in a hostile takeover in 2016 and we were fired. You can see what happened. The Company was doing $35M per year when we left. We are setting up a brand new service and support company. Call me, Jim at 251-455-8370 or Jimmy at 251-455-8433.
We will soon be up and running, we hope as early as next week.
email: Jimbusby1946@gmail.com
Test
James, I purchased my home in 2014 and my home already had a Litejet system which in 2017 it decided to just no longer work per CentraLite some type of static charge. I have had it replaced with i believe the elegance XL system. I live in Florida and there is practicality no one here that works with this system. I do have a excellent tech that has been working on my system and has gone above and beyond to help me but it is VERY expensive. I have been fighting with my Insurance to try and get this covered but have had no luck. Are we no longer going to be able to get parts etc. or is that what your company will be doing. I am assuming the closing of the company does not look good for my Ins. claim,this system has honestly been a nightmare. I have dropped a lot of money and still have a lot to do. I am sure that the system would be great if it all worked and i knew how to work it. Thank you