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Monaco Set To Auction `Major Assets’
Posted By RVBusiness On May 2, 2009 @ 11:47 am In Breaking News | No Comments
Monaco Coach Corp. got the green light Friday (May 1) to put its major assets up for auction later this month, but only after intensive negotiations that delayed the start of a hearing in U.S. Bankruptcy Court in Delaware.The Press-Enterprise, Eugene, Ore., reported that Robert Orgel, one of Monaco’s attorneys, told Judge Kevin Carey that Monaco was fortunate the hearing was scheduled late in the day because the extra time enabled the parties to resolve all the objections to Monaco’s auction plan.
“I couldn’t have told you that 45 seconds ago,” he said.
Monaco, a Coburg, Ore., RV maker, terminated about 2,000 employees and filed for Chapter 11 bankruptcy protection in early March, seeking to reorganize its finances while getting breathing room from creditors.
Before Friday’s hearing, lawyers for Monaco’s two main secured creditors, Bank of America and Ableco Finance, as well as for unsecured creditors and for the U.S. Trustee, had filed objections to Monaco’s plan to put its major assets up for auction, as well as its request to continue using cash from the main creditors.
Ableco had registered the most vociferous objections in a brief filed Thursday. Its lawyers argued that the proposed $52 million sales price would not come close to covering the $75 million that Monaco owes Ableco and Bank of America. Good faith negotiations to resolve issues had failed, they said, arguing that the company’s operations should be shut down and its assets liquidated.
The Press-Enterprise reported that after talks that apparently went on for most of the day Friday, the objections were resolved.
A subsidiary of Navistar International Corp. has agreed to buy Monaco’s assets for $52 million, but other parties will have a chance to submit bids at hearing scheduled for May 21.
Navistar is a massive Illinois corporation that builds diesel engines, school buses, heavy trucks and military vehicles.
Earlier this month, Monaco signed an asset purchase agreement in which a Navistar subsidiary called Workhorse International Holding Co. would buy Monaco’s major assets for $52 million.
Under such a deal, Navistar would acquire all of Monaco’s RV brand names, its closed factories in Coburg and Indiana, plus equipment and intellectual property. Navistar hasn’t disclosed its plans for the Coburg headquarters, but a Monaco official said in March that the new owner would restart the plant.
Monaco and Navistar have a long-running business relationship. In 2007, the two companies formed a joint venture to build rear-engine diesel chassis in Elkhart, Ind. And Navistar’s president and CEO, Daniel Ustian, has been on Monaco’s board since 2003.
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