Two longtime Wichita companies file for bankruptcy restructuring. Here’s what happened

Two well-known Wichita companies have filed for Chapter 11 bankruptcy reorganization amid financial struggles fueled by events one owner says was out of their control.

James Oberwortmann said Tuesday that Metro Courier and Wilson Building Maintenance are seeking to reorganize after a previously lucrative move Metro made to expand freight services out of state to be an Amazon contractor became unprofitable due to facility closures and changes to the way delivery contracts were bid.

Wilson got caught up in the trouble trying to help its sister company “stay alive,” he said.

“There’s some small changes to make financially … and we’re just fine moving forward,” he said. “This is exactly what we needed, unfortunately.”

Oberwortmann owns the companies with his mother, longtime Wichita businesswoman Anita Oberwortmann, who founded Wilson, a janitorial services company, in 1978. She bought Metro Courier, which offers a variety of same- and next-day delivery, trucking and courier services across Kansas, in 1999.

James Oberwortmann said he is “extremely confident” in the companies’ futures and is looking forward to focusing Metro’s services back on Kansas clients.

“We kind of just lost our vision out there. And we realized there’s so much business here in Kansas to take care of. … We want to rise up and get back to our community standing. We want to be the same people we’ve always been around Wichita,” he said.

Mark Lazzo, an attorney for the companies, said in an email that both plan to reorganize under Subchapter V of Chapter 11 of the bankruptcy code, which allows small businesses to file for relief in special categories aimed at streamlining processes and reducing costs.

Metro Courier and Wilson Building Maintenance “will submit a reorganization ... plan to its creditors to restructure its existing installment debts and expects to successfully emerge from Chapter 11 in a much stronger financial position,” he said.

The bankruptcies were filed Friday in federal court in Wichita.

Metro’s bankruptcy filing lists $764,986 in assets and $1,140,506 in liabilities. Wilson’s shows $492,660 in assets and $527,429 in liabilities.

The filings show gross revenues have declined for both companies since 2021.

Metro listed more than $11 million in gross revenue in 2021, more than $9.5 million in 2022 and just over $6.9 million last year.

Wilson had more than $6.2 million in gross revenue in 2021, more than $5.4 million in 2022 and more than $5.8 million in 2023.

The bankruptcies won’t affect the businesses’ ownership or current operations, Lazzo said.

Employees won’t be affected, either, Oberwortmann said.

Metro Courier is located at 4949 S. Lulu Court and employs about 85 people, he said. Wilson Building Maintenance, 624 E. First St., has about 150 employees.

What happened

Oberwortmann says the companies’ financial trouble began after Metro Courier decided to start doing business with online retailer Amazon around the end of 2018.

“We went to a conference and sat down with somebody that was doing the national contract for Amazon and they asked us if we wanted to help them. We got into it that way,” he said.

For the first year or two, business boomed.

“There were months where we were seeing six-figure profits. We were extremely happy about what was happening,” Oberwortmann said.

The quick success led Metro to invest more in other markets, including expanding into Amarillo and Odessa in the Texas panhandle, Tulsa, Oklahoma City and Springfield, Missouri, he said.

“We weren’t doing deliveries to homes. (We were doing) freight, pallet and deliveries to the post office and then the post office would distribute it out from there,” he said.

“Those markets started up really well. ... They were considering us a premier carrier. We had really good, outstanding ratings. ... Our times were always really excellent.”

When the COVID-19 pandemic struck, Metro struggled some with hiring and other issues, like many other businesses.

But the company was “doing OK. We were maintaining,” Oberwortmann said.

Metro took another hit when “some restructuring happened on the Amazon site,” he said.

“They shut down some facilities. … They started pulling markets.”

Oberwortmann said Metro was invited to work at a new facility in Lubbock, Texas, where some operations were being consolidated. “That took its own investment.”

A facility in Springfield that had been profitable for Metro also shut down with no replacement, he said.

“All the while, we’re leasing equipment to do this stuff, leasing buildings. Leasing is a big issue that we got into with trucks and buildings in those markets that were shut down,” Oberwortmann said.

Another blow came after contractors were required to start bidding on delivery routes weekly, instead of for longer terms.

“We had made investments to secure routes. But the big beasts said, ‘We’re going to do it this way,’” he said. “There wasn’t much we could do about it.”

Oberwortmann said Metro worked the weekly contract model for a while, until it reached a point that it was no longer feasible.

“It just continued to eat our profits away. The rates just got lower and lower and lower because they would find cheaper people to do their routes.”

He added: “It just drove us out.”

Oberwortmann said he sought help from a local bank in the aftermath. But when that didn’t work out, they “were forced” into alternative lending, which he called “unfavorable.”

Eventually, that “became unmanageable,” too, he said.

The Chapter 11 bankruptcies were needed to help protect the companies moving forward, he said.

“We got a little distracted. … But we’re focused on the future.”

Oberwortmann says for now Metro is “in a good place.” He said the company has replaced its Amazon revenue with organic business from Kansas clients. Another positive that came from the situation is Metro started freight business in Wichita, he said.

“We had $11 million in sales. … Now we’re at about $6 million in sales. But our GP (gross profit) is way better. Our gross profit has increased dramatically.”

Wilson Building Maintenance, which Oberwortmann said “had no problem” before Metro faced issues, is “a very healthy company” with janitorial services contracts at several schools, office buildings and other locations in and around Wichita.

Going forward, Oberwortmann hopes all of their customers will “continue trusting us like they always have.”

“We have very local clients. They’re what’s keeping us alive.”