Regal Industries Closes, Files For Bankruptcy

Regal Industries, long-time Crothersville based manufacturer of cellulose insulation, has ceased operations and has filed for Chapter 7 bankruptcy protection.

Tim Henry, president of the company and grandson of one of the company’s founders, said the reasons for the company’s demise were multiple.

“Before the housing bubble burst, we couldn’t make insulation fast enough,” he said. “Then around 2007 when housing crashed and the banking crisis added to the lack of home construction, our business orders plummeted.”

Henry said that at about that time the cost of shipping freight went up. “Diesel fuel prices went up and our costs to ship our product went up,” he said. “It was a double whammy. We didn’t have the orders we used to and couldn’t ship as far as we used to.”

“Between the housing bubble burst and increase shipping costs, we just couldn’t recover,” he said.

He said getting quality raw materials was also inconsistent.

The company’s raw material was newspaper. And the newspaper industry, being pressured by legislation and environmental groups, began to use recycled newsprint.

Henry said that was good for the environment, but made it more difficult to produce a consistent cellulose insulation product.

“Recycled newsprint results in shorter fibers which makes for less insulation R-value,” he said. “We would get a load of recycled newsprint and the next one might not be. It was difficult to maintain consistency for our product.”

Regal Industries began in the mid-1970’s when then local building contractors Earl Murray (Henry’s grandfather) and Lee ‘Sam’ Royalty developed a way to cut housing costs by using cellulose insulation recycled from readily available newspapers rather than fiberglass. The pair were innovators in the blossoming green movement to reuse and recycle newsprint.

The contractors kept their construction crews employed during the winter when housing projects were down by producing cellulose insulation from ground up newspapers.

Regal Insulation quickly overshadowed Murray & Royalty’s construction business and the pair began to focus on larger scale insulation manufacturing.

Over the years Regal’s business grew and they had several plant expansions. At one time Regal Industries employed 140 at their plant west of Crothersville and was the largest single plant producer of blow-in type insulation east of the Mississippi River.

“This is the hardest decision I have ever had to make,” said Henry. “We tried to find another company to purchase us to keep in production and I tried to find investors to stay in business, but we weren’t successful.”

Business founder Lee ‘Sam’ Royalty, 67, battled cancer before succumbing in Jan. 2009. His business partner Earl Murray, 88, died in April 2014.