Northfield-based Knight-Celotex to liquidate

The reorganization of Knight-Celotex LLC, which called itself the world's largest fiberboard manufacturer, was changed on June 11 to a liquidation in Chapter 7 where a trustee was appointed by the end of the week.

Conversion was made at the behest of Bank of America NA, the secured lender owed $34 million when the reorganization began. The bank recited how the authority to use cash expired June 5, the chief executive officer resigned, and $1 million in unauthorized expenses were incurred.

Knight-Celotex said it filed in Chapter 11 on April 6 with $357,000 cash and inventory valued at $7.2 million. Revenue in 2008 was $79 million.

The Northfield, Illinois-based company made green roofing board, insulation sheathing, and sound-deadening products.

Knight Industries Inc., a private-investor group from Chicago, purchased the business in 2001 from Celotex Corp.

The case is In re Knight-Celotex LLC, 09-12200, U.S. Bankruptcy Court, Northern District Illinois (Chicago).