This probably isn’t how “The Profit” envisioned things working out.
Colorado Springs-based Tumbleweed Tiny House Co. filed for Chapter 11 bankruptcy last week, less than three years after the business was featured on the CNBC show.
The tiny house manufacturer said in a March 4 filing it owes at least $3 million to between 100 and 199 creditors. The company listed between $500,000 and $1 million in assets.
Companies use Chapter 11 bankruptcy protection to reorganize and help keep the business alive, paying creditors over time.
Tumbleweed was founded in 1999, and Steve Weissmann took over as CEO in 2007. According to the company’s website, it manufactures four styles of tiny homes, ranging from 166 square feet for nearly $57,000 to 245 square feet starting at nearly $77,000.
In November 2017, Tumbleweed appeared on The Profit, a show where host and entrepreneur Marcus Lemonis helps “struggling businesses that are desperate for cash.”
According to CNBC, when the show aired, Tumbleweed was over $1 million in debt and one week from bankruptcy. Lemonis gave Tumbleweed a $3 million loan in return for 75 percent equity in the business.
Weissmann said in a Tuesday email that “after interest in tiny homes crested in 2017, the rapid sales growth disappeared, and the growing debt payments became unmanageable.”
“As a result, we filed Chapter 11 to renegotiate the debt payments,” he said, declining to answer further questions. “We intend to keep building tiny homes far into the future.”
Lemonis’ FreedomRoads Holding Co. is the company’s largest creditor, owed $2.7 million, according to the filing.
The filing also said Tumbleweed owes at least $2.75 million in loans and $273,500 in material costs.
Other tiny home news: Two Portland, Oregon-based tiny home builders and manufacturers also filed for Chapter 11 bankruptcy this year.
Tiny Heirloom, also known as Heirloom Inc., and Level 3 Homes & Designs LLC both filed in late January.