Strand Lighting, LLC Files for Bankruptcy

MNicolai

Well-Known Member
Premium Member
Fight Leukemia

Strand Lighting, LLC Files for Bankruptcy​


Move might be business risk-related and not due to financial distress​


DALLAS, TEXAS — Theatrical lighting and controls manufacturer, Strand Lighting, has had numerous owners throughout its 100+ year history. In 2006, the company was purchased by Genlyte Group which eventually morphed into the company we know today as Signify.

On Monday, Dallas-based Strand Lighting, LLC filed for Chapter 7 Bankruptcy Protection in U.S. Bankruptcy Court for the Northern District of Texas. But this isn’t a run-of-the-mill manufacturer bankruptcy filing. Let’s break it down:

Are the Strand Lighting brand and products going away?
This is the big question we were hoping to have answered by press time.

We have been in fairly regular communication with Signify over the last 24 hours, but the company has yet to provide us with any official statements or answers to a few basic questions relating to the Strand Lighting matter. It’s quite possible that the Strand Lighting brand and product portfolio will live on and that this bankruptcy filing aims to provide legal and financial risk mitigation. More on that later.

Can a subsidiary of the world's largest lighting company really go bankrupt?
Strand Lighting, LLC is one of approximately 150 global companies owned by Signify. There over 25 Signify-owned legal business entities in North America alone.

And, yes, subsidiaries can go bankrupt while the rest of the business carries on. In certain circumstances bankruptcy can protect the parent company from a defunct subsidiary’s obligations. In other cases, the parent company may carry some obligation to the bankrupt subsidiary’s creditors. This is a multi-faceted business law issue.

Chapter 7, not Chapter 11
In Chapter 7 bankruptcy proceedings, businesses are liquidated to pay off creditors. They do not restructure and continue to operate like Chapter 11 companies normally do.

Asbestos Litigation: Mesothelioma
The bankruptcy filings we’ve seen from other lighting manufacturers typically include a long list of creditors that cite components makers, freight companies, equipment providers and lighting agents, among many other types of companies. The Strand Lighting, LLC bankruptcy filing shows that it owes no monies to typical manufacturing vendors. Instead, the company cites an unusually short list of 23 creditors: the Internal Revenue Service, sister company Genlyte Thomas for the 30 days that remain on the building lease and 21 law firm creditors.

In unraveling the details surrounding the 21 law firm creditors, we found that all 21 claims are disputed by Strand Lighting and are contingent upon the outcome of pending litigation. We weren’t able to locate the details of all 21 lawsuits cited in the bankruptcy filings, but at least ten of the cases are personal injury cases related to asbestos product liability. Nearly all of the cases are in New York and California courts.

The asbestos litigation cases typically cite Strand Lighting as one of numerous defendants. Sometimes 30 or more defendants are listed – a strategy that is apparently common in these types of lawsuits. The product liability claims seem to relate to the use of asbestos-insulated wiring that was allegedly used in Strand Lighting products decades ago. The plaintiffs are often individuals who worked in technical roles in theater environments or theatrical supply occupations.

Is the Strand Lighting business simply moving to another internal subsidiary?
From a market standpoint, it seems that Strand Lighting, LLC has paid its vendors, agents and other business partners. Based on some conversations we had with multiple Strand lighting agents on Tuesday, the brand is not giving off signals of financial distress.

So the bankruptcy filing of Strand Lighting, LLC could simply be a legal way for the company to reduce the financial risk of present and future product liability lawsuits. It’s quite possible that the Strand Lighting business has been transferred to another Signify subsidiary, i.e. Dallas-based Vari-Lite, and that the market-facing side of the business sees no disruption.

Examination of the Strand Lighting, LLC revenues may lend support to the notion that the Strand Lighting business has been transitioning to another Signify subsidiary:
  • 2020 sales: $21.3 million
  • 2021 sales: $7.6 million
  • 2022 YTD sales: $2.9 million
Most lighting industry observers might expect theatrical brands that rely on live event revenue to have a challenging pandemic, but the revenue dips above, particularly the paltry 2022 numbers may indicate that the Strand Lighting business has already been transitioning to another Signify company.

We hope to get some clarifications and answers from Signify on this matter, but due to this being the quiet period before its July 29 quarterly earnings announcement, we may have to wait a few more weeks to get some solid answers.
 

Attachments

  • gov.uscourts.txnb.500541.4.0.pdf
    686.8 KB · Views: 6
  • gov.uscourts.txnb.500541.3.0.pdf
    3.8 MB · Views: 1
  • gov.uscourts.txnb.500541.2.0.pdf
    114.4 KB · Views: 0
  • gov.uscourts.txnb.500541.1.0.pdf
    301.9 KB · Views: 0

Van

CBMod
CB Mods
Premium Member
We've been chatting about this today. Interesting things going on.
 

MNicolai

Well-Known Member
Premium Member
Fight Leukemia
Sad to see this.
There's not much to see other than a brand name retiring. Effectively this bankruptcy is deferring risk from numerous asbestos-related personal injury lawsuits, though it's certainly possible the consolidation was already planned earlier on knowing that Vari-Lite has a stronger brand reputation these days than Strand. The liabilities likely evaporates with the bankruptcy as essentially the remnants of Strand Lighting LLC would have minimal assets and are effectively judgment-proof from their creditors. Meanwhile the Strand legacy gets folded into Vari-Lite.

So instead of Strand's product catalog disappearing off the face of the earth, they are instead preventing mesothelioma victims from collecting on any potential awards from those lawsuits.

Strong, Altman, Mole-Richardson, so-on have been caught up in similar suits. Essentially if someone gets mesothelioma, the attorneys look back at their work history and flag any employers, contractors, or product vendors that may have provided asbestos exposure and then they name 20-30 companies as defendants in a single lawsuit. They cast a giant litigation net and see what they can catch. One of the same suits Strand is named in also names everyone from Signify to Honeywell, Briggs & Stratton, Strong, and various other entities that provided different construction materials with asbestos like insulation for piping.
 
  • Like
Reactions: Van

danTt

Well-Known Member
There's not much to see other than a brand name retiring. Effectively this bankruptcy is deferring risk from numerous asbestos-related personal injury lawsuits, though it's certainly possible the consolidation was already planned earlier on knowing that Vari-Lite has a stronger brand reputation these days than Strand.

Does it though? I don't know anyone going out of their way to use anything VL has made since the 3500. I guess it has ten years more decent reputation than Strand, but it's certainly not a flagship brand anymore.
 

FMEng

Well-Known Member
Fight Leukemia
I have yet to see any tech product manufacturer get swallowed up by a conglomerate and continue to be successful long term. The bigger the fish, the faster the fish food comes out the tail end. I guess it makes the investors happy, but it never makes the customers happy. Without happy customers, there is no long term future for the company.

I bought a pile of Strand products in the 1990s, based on their long term reputation. A couple of years later, I couldn't buy parts for anything. You'd never convince me to buy Strand again without a dramatic change in the company.
 
Last edited:

techieman33

Well-Known Member
We have a couple of their LED Leko's coming in to demo tomorrow. The rep told us that everything he's been told and seen is that it's business as usual there with no plans to make any changes to the product line anytime soon. This move is just about dumping any potential liability and generally restructuring the company to make things simpler to run.
 

Van

CBMod
CB Mods
Premium Member
this week we had a shoot out between some ETC and Strand products the strand S4 equivalent apparently blew away the ETC. Color, Consistency and Beam, Next day, they announced this. Glad to hear it's really a restructuring. Odd that a Judge allowed them to Chapt 7 instead of 11 if this really does boil down to a 'Restructuring' because of Liability but I'm no Lawyer.
 

MNicolai

Well-Known Member
Premium Member
Fight Leukemia
this week we had a shoot out between some ETC and Strand products the strand S4 equivalent apparently blew away the ETC. Color, Consistency and Beam, Next day, they announced this. Glad to hear it's really a restructuring. Odd that a Judge allowed them to Chapt 7 instead of 11 if this really does boil down to a 'Restructuring' because of Liability but I'm no Lawyer.
Not a bankruptcy expert by any means, but I'm going to take a guess this was in the works for long enough that Chapter 11 wasn't necessary for the purpose of protecting their assets. The IP was already part of Signify to my knowledge. The "Strand Lighting LLC" business entity may not have had much under its actual umbrella in the first place and if they move the assets around early enough before they declare then it's possibly legal -- or legalish depending on how a judge sees it.

I understand that they also just filed for bankruptcy. A judge has likely not reviewed their case yet.

Doesn't speak highly of our corporate systems though that this kind of preemptive maneuvering is possible before those asbestos suits reach a judgement.
 

danTt

Well-Known Member
this week we had a shoot out between some ETC and Strand products the strand S4 equivalent apparently blew away the ETC. Color, Consistency and Beam, Next day, they announced this. Glad to hear it's really a restructuring. Odd that a Judge allowed them to Chapt 7 instead of 11 if this really does boil down to a 'Restructuring' because of Liability but I'm no Lawyer.
I'd be curious to know what specific products you were comparing, as well as more details about the construction quality and long term reliability of the strand fixtures.
 

ScottT

Lighting Programmer
The word that keeps coming up to me when thinking about this is undignified.

This is a very undignified end to a company (and brand) who was part of many tectonic shifts and changes to the lighting industry.
 

techieman33

Well-Known Member
Not a bankruptcy expert by any means, but I'm going to take a guess this was in the works for long enough that Chapter 11 wasn't necessary for the purpose of protecting their assets. The IP was already part of Signify to my knowledge. The "Strand Lighting LLC" business entity may not have had much under its actual umbrella in the first place and if they move the assets around early enough before they declare then it's possibly legal -- or legalish depending on how a judge sees it.

I understand that they also just filed for bankruptcy. A judge has likely not reviewed their case yet.

Doesn't speak highly of our corporate systems though that this kind of preemptive maneuvering is possible before those asbestos suits reach a judgement.
Looks like their claimed revenues have been dropping off for a while. Not sure how much of that was planned and how much was because of the pandemic though. These numbers were copied from the Reddit thread so I can’t speak for their accuracy.

“21M in revenue in 2020, 7.5M in 2021, 2.9M YTD. 21 outstanding court cases that all look to be related to asbestos. 527k in assets, 113k in liabilities.”
 

techieman33

Well-Known Member
I'd be curious to know what specific products you were comparing, as well as more details about the construction quality and long term reliability of the strand fixtures.
I just spent a couple hours with a Leko FC. My overall impression is meh. There is some weird color shift when the color is set to various whites. The left and right 10-15% is very noticeably warmer than the rest of the beam. That problem went away with any colors though. Could be result of the 14* barrel. Not really sure.
I found the 4 channel mode to be pretty worthless in a theatrical setting. It just gives you open white, 20 predefined colors, 20 more that be set on the fixture by the user and strobe.
The 16 channel CMY mode struggled to make some colors manually, and the color picker on our AVO was just plain awful, nothing was even close.
The 18 channel mode where it has control of each individual LED color looked much nicer with the color picker and manually tuning things.
As far as build quality goes. I think the light engine is fine. I’m not a fan of the plastic gate assembly. There are a couple of degrees of play between it and the light engine. The barrel rotation was very rough. Maybe someone with Selecon SPX experience can speak to how normal that is. Since the gate and lenses are taken straight from that line. It’s not enough to be a problem now. But enough to make me wonder what it will feel like in a few years. The barrels were also plastic and had the same rough feeling when moving the lens. We also got a zoom barrel. It didn’t survive shipping though. One of the plastic brackets that hold one of the lenses broke in shipping. Overall I think it would hold up ok in an install situation where people took care of it. But I wouldn’t want to have them on a tour or in a situation where people were hard on them.
We’re supposed to have a Phoenix, Ovation, and Lustr 2 coming in to demo so I’ll be curious to see how they compare.
 

MNicolai

Well-Known Member
Premium Member
Fight Leukemia
@techieman33

Those are in the filings I attached in the original post here. Which is probably a combination of Covid and simply diverting where those invoices and purchase orders are coming from so they start coming from Signify or VL instead of from Strand.
 

Ford

Sr Product Manager, Chauvet Professional
We’re supposed to have a Phoenix, Ovation, and Lustr 2 coming in to demo so I’ll be curious to see how they compare.
Keep us posted. Which ovation? E910 or Reve E3?
 

macsound

Well-Known Member
I've been a fan of Vari-lite for a long time. Mostly because their old gear just keeps working and is more predictable model to model than most other brands.
Honestly the merger with Phillips/Signify makes me incredibly worried to the point that I haven't even considered any of the newer stuff. Big companies who don't know what entertainment products are have this model de-jour mentality, making everything disposable. Not something I want to worry I'm getting involved in.
Honestly I with VL could spin themselves out and be a real company again. Even their instagram and website are a complete mess, totally missing the point of what people are looking for on those platforms.
 

bharrell

Active Member
I just spent a couple hours with a Leko FC. My overall impression is meh. There is some weird color shift when the color is set to various whites. The left and right 10-15% is very noticeably warmer than the rest of the beam. That problem went away with any colors though. Could be result of the 14* barrel. Not really sure.
I found the 4 channel mode to be pretty worthless in a theatrical setting. It just gives you open white, 20 predefined colors, 20 more that be set on the fixture by the user and strobe.
The 16 channel CMY mode struggled to make some colors manually, and the color picker on our AVO was just plain awful, nothing was even close.
The 18 channel mode where it has control of each individual LED color looked much nicer with the color picker and manually tuning things.
As far as build quality goes. I think the light engine is fine. I’m not a fan of the plastic gate assembly. There are a couple of degrees of play between it and the light engine. The barrel rotation was very rough. Maybe someone with Selecon SPX experience can speak to how normal that is. Since the gate and lenses are taken straight from that line. It’s not enough to be a problem now. But enough to make me wonder what it will feel like in a few years. The barrels were also plastic and had the same rough feeling when moving the lens. We also got a zoom barrel. It didn’t survive shipping though. One of the plastic brackets that hold one of the lenses broke in shipping. Overall I think it would hold up ok in an install situation where people took care of it. But I wouldn’t want to have them on a tour or in a situation where people were hard on them.
We’re supposed to have a Phoenix, Ovation, and Lustr 2 coming in to demo so I’ll be curious to see how they compare.
We have seen a lot of variation on the quality of the fixture's demo based upon the accuracy of the fixture library of the console. We have done demos on our Strand consoles and have not seen the color shifts that you are mentioning. Not sure where that is coming from. Could be a control issue. Could be from something else. We also have EOS showfile with fixtures that we built that should present the fixture well. Sounds like the fixture had an SPX lens tube. The new Profile Lens Tubes (PLTs) have 20% more output and are the preferred fixed focus lens tubes moving forward.
 

Users who are viewing this thread