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‘Show of Faith’ Gives Country Coach More Time
Posted By RVBusiness On November 25, 2009 @ 8:58 am In Breaking News | No Comments
Luxury motorhome maker Country Coach LLC managed to stave off liquidation for a little longer on Tuesday (Nov. 24), according to the company’s top executive. But the company’s future remains as murky as ever, according to The Register-Guard, Eugene, Ore.
An investment group that includes a banker who is both an owner and creditor of the RV maker put up $1 million in earnest money by a court-imposed deadline Tuesday, Country Coach CEO Jay Howard said.
The move buys a little time for investors to negotiate a deal with Wells Fargo, the Junction City, Ore., manufacturer’s main creditor, he said.
In bankruptcy court on Monday, Wells Fargo’s attorney Wilson Mulheim, said Country Coach has consistently defaulted on its loan agreements.
The investors now have until Dec. 3 to hammer out a plan with Wells Fargo to assume the $8.2 million loan the bank made to Country Coach on April 1, Howard said. The cash enabled the company to continue to operate while in Chapter 11 bankruptcy, he said.
No information regarding these developments had been filed with the U.S. Bankruptcy Court by closing time Tuesday.
Howard said County Coach has cleared an important hurdle on its path to recovery.
“It’s a huge step,” he said. “It’s a show of faith in the future of Country Coach and allows us the opportunity with the court to remain in Chapter 11 for some period of time and reorganize our company successfully.”
The move is the latest turn in Country Coach’s lengthy bankruptcy saga.
The same investor that pushed Country Coach into Chapter 11 reorganization bankruptcy in March now is leading the charge to try to prevent the court from converting the case into Chapter 7 liquidation bankruptcy.
That investor is Bryant Riley, a Los Angeles investment banker, who led the investment group that bought Country Coach from National RV Holdings for $50 million in 2007.
One of his companies, Riley Investment Management, or RIM, is a Country Coach creditor.
Howard said an investment group composed of Riley, RIM and businessman Lloyd Miller put up the $1 million on Tuesday.
Howard said Tuesday afternoon that he anticipated that Washington state businessman Roger McCombs also would deposit $1 million in the Wells Fargo escrow account by the Tuesday deadline.
McCombs could not be reached for comment Tuesday, and Howard did not return a call Tuesday evening asking if McCombs had made the deposit.
McCombs has expressed interest in building motorcoaches at the Country Coach plant, as well as mobile medical coaches, using Country Coach’s chassis, and furthering his maglev, or magnetic-levitation, technology, Howard said.
“If the McCombs plan comes to fruition, it could involve thousands of jobs over the next 18 months,” Howard said. “It takes us far beyond motorcoaches.”
Country Coach stopped building coaches in September, Howard said. The company, which employed about 1,600 people just two years ago, now is down to just two employees: Howard and Chief Financial Officer Mark Anderson.
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