Kelly-Moore Paints announced on Friday it plans to immediately shut down, ending “substantially all its business.” The company has been burdened by thousands of asbestos litigation claims over the years. In addition, ownership inherited significant legal liabilities, including millions of dollars of previously unpaid sales and use taxes.

The 78-year-old paint manufacturer operates more than 150 stores in California, Texas, Oklahoma and Nevada. It was founded in 1946 in San Carlos, CA and was acquired by an investment firm in late 2022. New ownership moved the headquarters from California to Texas.

The company furloughed approximately 700 employees and halted operations at its manufacturing facility. Officials said Kelly-Moore will attempt to fulfill previously placed orders using inventory from its Union City, CA distribution facility.

According to BusinessWire, Kelly-Moore was in conversations in recent weeks with several potential investors, but none ultimately came forward. 

In the past 20 years, Kelly-Moore has paid approximately $600 million to settle asbestos claims, and company officials say they may face an additional $170 million in future liabilities.

The San Francisco Chronicle reports that “the decision to terminate operations was made, the company said, after it was determined that neither bankruptcy reorganization or in-court liquidation were viable steps due to its inability to fund operations as well as the company having no assets to provide to creditors.”

“Largely due to the asbestos litigation overhang, it was impossible to attract any additional funding or interest to recapitalize, restructure, or reorganize the business,” the company said in a press release.

“I’m extremely disappointed and saddened by this outcome, as the entire Kelly-Moore team made incredible efforts to continue innovating and serving the unique needs of professional painting contractors,” CEO Charles Gassenheimer said. 

“I could not be prouder of what our talented team accomplished under extremely challenging circumstances,” Gassenheimer said. “My deepest sympathy goes out to our loyal employees, customers, industry partners and the communities where we do business, who have supported Kelly-Moore throughout its long history. Unfortunately, this was the only viable alternative remaining for us after evaluating all other potentially feasible options.”