Duramax built for 3.39m bins, sold 1.2m, filed Chapter 7
New York City's official supplier of wheelie bins says the pace of the city's own rollout left it holding a factory built for three times the orders it got.
Duramax geared up its production around a schedule of 3.39 million bins for New York City.
It sold approximately 1.2 million.
The company says that shortfall helped push it into Chapter 7 bankruptcy, according to reporting by Inc.
Chapter 7 is liquidation, not restructuring. It is the filing a company makes when there is nothing left to trade out of.
The bins exist because of a city mandate. New York is preparing to fine property owners who do not use containers for their rubbish.
That is the shape of the risk. The demand was real and legally compelled, but the timing of it belonged to the city, not to the supplier.
A mandate creates a number. A rollout schedule decides when that number turns into purchase orders, and it can slip without anyone breaching a contract.
Duramax appears to have built to the number rather than to the orders in hand.
The lesson for any founder selling into a government programme is unglamorous. Capacity is a fixed cost you commit to today against revenue a public body controls the date of.
Financing that gap on the assumption that the schedule holds is the bet that ended here.