Country Coach, the financially ailing Junction City, Ore., RV maker, has yet to file a reorganization plan to get itself out of bankruptcy. And now a judge is demanding that company officials explain why he shouldn’t order that its assets be liquidated, according to The Register-Guard, Eugene, Ore.
A hearing on Country Coach’s Chapter 11 bankruptcy case is set for Oct. 22, at which time company officials will have to convince U.S. Bankruptcy Judge Albert Radcliffe that it has a viable plan for returning to profitability. If not, Radcliffe could order the case converted to a Chapter 7 case, which means its assets would be sold off to satisfy creditors, or he could dismiss the case outright, which would allow creditors to sue to seize the company’s assets.
The hearing could mark a turning point for Country Coach, which filed for bankruptcy protection in March so it could reorganize its finances while getting breathing room from creditors, chief among them California-based Wells Fargo Bank.
Country Coach, a privately held maker of luxury motorcoaches, closed its Junction City plant in November, putting about 500 employees out of work. It resumed production in April, although on a much smaller scale. Company officials have said between 100 and 120 employees have been working at the plant, turning out about one coach per week.
Company spokesman Matt Howard said Wednesday (Sept. 23) the plant has been shut the past two weeks, but the company is planning to reopen Monday. He declined to comment on legal issues.
Since it resumed production in April, Country Coach has posted losses of $6.8 million, according to a financial statement it filed with the court Sept. 15.
Judge Radcliffe initially set an Aug. 31 deadline for Country Coach to file a reorganization plan. That was extended, at the company’s request, to Sept. 15. Radcliffe said he wouldn’t consider further extensions unless Country Coach’s main creditor, Wells Fargo, agreed to extend its financing past Dec. 31. Country Coach lawyer Brandy Sargent said in a motion that Wells Fargo had agreed to extend the financing through Feb. 15 and asked that the deadline for filing a plan be extended to Oct. 15.
Sargent said the company recognizes that “there remains a material risk that it will not be able to proceed to confirmation of its plan,” and she outlined a series of hurdles Country Coach must clear to get its plan confirmed by the court. Those include coming to terms with its landlord, Lee Joint Ventures, with Wells Fargo, and with its would-be partner, Recreation Live LLC.
The U.S. Trustee’s office, meanwhile, objected to the company’s request for another extension. The company has not filed documents supporting its assertion that Wells Fargo has agreed to extend its financing, nor has Wells Fargo filed any documentation indicating that it agreed to an extension, according to a brief filed by Rebecca Kamitsuka, attorney for the U.S. Trustee.
Further, Kamitsuka said, when she asked a Country Coach lawyer for a copy of the loan modification agreement, he faxed her a single-page document, marked as Page 6 of 6, with just a signature page, but without the text of the agreement.
Country Coach, Kamitsuka wrote, “cannot hide the ball on these matters in its fiduciary capacity.”
General Motors Corp. filed for Chapter 11 bankruptcy protection today (June 1) as part of the Obama administration’s plan to shrink the automaker to a sustainable size and give a majority ownership stake to the federal government, according to the Associated Press.
GM’s bankruptcy filing is the fourth-largest in U.S. history and the largest for an industrial company. The company said it has $172.81 billion in debt and $82.29 billion in assets.The fallen icon of American industrial might will rely on $30 billion of additional financial assistance from the Treasury Department as it reorganizes. That’s on top of about $20 billion in taxpayer money GM already has received in the form of low-interest loans.
GM will follow a similar course taken by Chrysler LLC, which filed for Chapter 11 protection in April and hopes to emerge from its government-sponsored bankruptcy this week.
The plan is for the federal government to take a 60% ownership stake in the new GM. The Canadian government would take a 12.5% stake, with the United Auto Workers getting a 17.5% stake and unsecured bondholders receiving 10%. Existing GM shareholders are expected to be wiped out.
President Barack Obama is scheduled to address the nation about GM’s future at midday from Washington, and GM CEO Fritz Henderson is to follow him with a news conference in New York.
Beyond the bankruptcy announcement today, GM is expected to reveal 14 plants it intends to close. One of those plants, however, will be retooled to build a small car.
GM’s filing comes 32 days after a Chapter 11 filing by Chrysler, which also was hobbled by plunging sales of cars and trucks as the worst recession since the Great Depression intensified.
The third of the one-time Big Three, Ford Motor Co., has also been stung hard by the sales slump, but it avoided bankruptcy by mortgaging all of its assets in 2006 to borrow roughly $25 billion, giving it a financial cushion GM and Chrysler lacked.
The downsized GM’s brands will be limited to Chevrolet, Cadillac, GMC and Buick. Its Pontiac, Saturn, Hummer and Saab operations will be either sold or closed. GM said it was finalizing a deal to sell Hummer, and plans for Saturn are expected to be announced within weeks.GM, whose headquarters tower over downtown Detroit, said it believed the filing was not an acknowledgment of failure, but a necessary way to cleanse itself in an orderly fashion of problems and costs that have dogged it for decades.
Trading of GM shares was halted early today after they plunged Friday as low as 74 cents, the lowest price in the company’s 100-year history. GM will be kicked out of the Dow Jones industrial average because rules established by the News Corp. unit that oversees the index prohibit it from including companies that have filed for bankruptcy.
Fleetwood Enterprises Inc. has been granted more time to finalize an agreement with potential buyers.
Company officials said an agreement wasn’t imminent and would not say who the potential buyers were, except that the company continues to have discussions with several parties, according to The Press-Enterprise, Riverside, Calif.
The Riverside-based company, which filed for Chapter 11 bankruptcy protection March 10, sought more time in court documents filed Friday (April 17).
Fleetwood said it needed to delay a final hearing about its temporary financing plan “to finalize an agreement with prospective buyers.” The company added that its ability to find buyers before the final hearing could resolve issues others have had with Fleetwood’s temporary $80 million financing plan with Bank of America.
In addition to being out of town when the original hearing was scheduled to occur, the lawyer representing the case’s committee of creditors mentioned the same reason as Fleetwood’s in his original motion to delay the hearing.
The final hearing to approve Fleetwood’s financing plan has been rescheduled for April 29 at 1:30 p.m.
Monaco Coach Corp., an RV-maker that also filed for Chapter 11 bankruptcy in March, has received one suitor; truck and engine maker Navistar offered $50 million.
Jeff Kurowski, director of industry relations for the National Recreation Vehicle Dealers Associations (RVDA), said dealers hope someone will buy all or some of Fleetwood rather than risk the company being liquidated.
“I would be surprised if someone came in to buy all of it,” he said, since it would require deep pockets and an understanding that both of Fleetwood’s divisions — manufactured housing and RVs — follow the same cycles. When one is down, the other is, too, he said. “Someone would have to have a pretty good stomach for risk.”