Editor’s Note: Following are excerpts from Springfield, Ore.-based KMTR-TV’s report on opening day Thursday (Feb. 4) of the auction of Country Coach Holdings Inc. assets in Junction City, Ore.
Federal bankruptcy courts ordered Country Coach to liquidate all of its assets late last year. Now the company is selling everything from office furniture, hand soap and computer monitors to RV mirrors, seats and raw wood it used to build coaches with.
The biggest items of the day were the coaches of course. Ten completed RVs went up for grabs. At full price, those used to retail for around $500,000 to $800,000 each. Today, many of those coaches sold for between $200,000 and $300,000, around half of their original value.
About 900 buyers showed up to the auction site at Country Coach’s old headquarters in Junction City. While many items sold, lots of people were disappointed they would have to shell out hundreds or thousands of dollars for the items they were looking for. Most of the items are being sold in what auctioneers call “lots.” Those are either large packages of items in the same category, like electronics, or large packages of multiples.
Eugene resident Gary Chapman was one of the participants in Thursday’s auction. He was looking for a TV. “The only TVs that I saw that I was interested in they had about six or seven going at one time, so I didn’t want to bid on six TVs,” says Jones.
Junction City resident Mark Jones also participated in the auction; he was waiting for a better deal. “Oh, there’s all kinds of stuff but, I can’t afford a $5,000 generator, so I’ll wait.”
The people running the auction say they’ll generate around $3 million on this auction. Despite their line of work, the auctioneers say it’s been difficult to see Country Coach go out of business the way it has.
Scott Lohman who works with the auction company, said, “We hired back about 10 to 12 employees who used to work here to help us set up and stuff. They introduce themselves, saying ‘I’ve been here 31 years,’ or ‘I’ve been here 25 years,’ and you know that’s half of somebody’s work life. What do you do when you’re 50 years old?”
Rob Beal called out some of the sales Thursday, saying this is one of the largest auctions for the Oregon area. His work has taken him across the U.S. and overseas to different countries in Asia. Commenting on his line of work and the economy, Beal said, “for a while we had flower shops, it was one after another to cabinet builders to vehicle manufacturing plants. It’s heart-breaking to see it happen.”
Once the auction is finished today, crews will have 10 days to get payments and to move everything out of the Country Coach headquarters. All of the money from the auction will go back to bankruptcy courts and be distributed from there back to creditors.
Jeff Johnston shows some of the sights and sounds at the opening day of the asset auction of Country Coach Holdings LLC in Junction City, Ore., in today’s featured video.
KEZI-TV, Eugene, Ore., filed this story on today’s auction in Junction City, Ore., of the assets of Country Coach Holdings LLC. Click here to watch its story on the auction. The auction began at noon EST.
Luxury motorcoach manufacturer Country Coach Holdings LLC has employed auction experts Hilco Industrial LLC to offer for sale the inventory, intellectual property, machinery and equipment from its Junction City, Ore., plant.
Hilco will host a worldwide webcast auction Feb. 4-5 at which buyers will have the opportunity to purchase completed 2009 and incomplete 2010 recreational vehicles, among many other items from the complete motorcoach assembly plan, according to a news release.
This auction event will feature 10 2009 new finished Country Coach motorcoaches from the Magna, Inspire, Veranda and Infinity product lines. Eight coaches in various stages of completion, from frames to nearly road-ready, are also available.
The company’s intellectual property will also be offered, including drawings, blueprints, logos, website, customer lists, molds and other intangible assets.
Huge quantities of inventory will be sold, including engines, transmissions, power generators, axle assemblies, chassis, body and interior components.
Machinery and equipment used in the manufacture of the vehicles, such as metal fabrication, woodworking, material handling, and auto assembly equipment, will be offered, along with the company’s fleet vehicles and office furniture and equipment.
The auction will comprise nearly 2,000 lots in all, and will attract bidders from many industries both locally and nationally. Buyers will be able to bid using the phone and Internet at www.hilcoind.com, or attend in person and bid on site at the manufacturing facility located in Junction City.
A judge decided Thursday to give Country Coach Holdings LLC a little more time to reorganize its business plan after concluding that the company has “at least a reasonable chance” to emerge from bankruptcy as a going concern.
“If this debtor can be saved, it’s in everybody’s interest,” U.S. Bankruptcy Judge Albert Radcliffe said near the end of a daylong hearing, according to the Register-Guard, Eugene, Ore.
Country Coach, a privately held maker of luxury motorhomes, closed its Junction City factory in November, putting about 500 employees out of work. The company filed for bankruptcy in March to reorganize its finances while getting breathing room from creditors.
The company resumed production in April, bringing back about 120 employees, with plans to turn out one coach per week. But the company has not met sales or production goals, and has been losing money at a rate of about $1 million a month, according to court testimony and documents.
The plant shut down briefly in July, and the assembly line has been shut down since the week of Sept. 11, Chief Financial Officer Mark Andersen testified.
Radcliffe rejected arguments from Rebecca Kamitsuka, attorney for U.S. Trustee Robert Miller, that the case should be dismissed. Doing so would allow creditors to move to liquidate the company’s assets “at fire-sale prices,” Radcliffe said.
“I fail to see who benefits from the dismissal of the case,” he said. “Its loss would be devastating to Junction City.”
Radcliffe set another hearing for next month and said he hopes to schedule a hearing to confirm the company’s reorganization plan by late January or early February.
Wells Fargo, the company’s main creditor, has agreed to extend financing through Feb. 15, said David Kurzweil, an attorney for the bank.
Kamitsuka had argued that the case should be dismissed because Country Coach had missed court-imposed deadlines for filing a reorganization plan and other documents, and because the company has lost $7.6 million since it resumed production in April and has just $1,000 left on its line of credit.
The company has no reasonable chance to recover, and its assets will continue to diminish in value, she said.
“Everybody wants jobs, but this company is going further and further in the hole,” Kamitsuka said. “This case has cratered.”
Under questioning from David Lavant, one of the company’s bankruptcy attorneys, CFO Andersen said he was not alarmed by the $7.6 million in losses because that number “is a measure of accounting activity.”
What the company needs to do to survive is create cash flow by selling coaches, even at deeply discounted prices, he said. The company is trying to sell coaches for more than their liquidation value, he said.
At the start of the hearing, Radcliffe heard a series of statements from Junction City civic leaders, Country Coach employees and vendors on how important the company is to the community.
“This is an important business in Junction City,” said Rick Kissock, executive director of the Junction City-Harrisburg Chamber of Commerce. “We need jobs. We don’t need empty buildings.”
Country Coach, which has been in Junction City since its founding in the 1970s, is “an integral part of the community” and a contributor to local causes and organizations, Junction City Administrator David Clyne said.
The company accounts for 10 % of the city’s property tax base, which helps the city pay for services such as police and parks.
Dave Swenson of API Inc., a Eugene auto paint maker, said Country Coach helped his company grow to 25 employees and $14 million in annual revenue. Since Country Coach fell on hard times, API is down to $4 million in revenue and 12 employees, he said.
Eugene lawyer Douglas Schultz, representing a committee of unsecured creditors, also urged Radcliffe to allow Country Coach to continue its reorganization efforts.
Unsecured creditors include suppliers, dealers and other parties who are owed money but will get paid only after the secured creditors get paid.Schultz said the company has struggled and not sold as many coaches as it intended. But he pointed to “one glaring fact”: Nearly all of Country Coach’s assets are encumbered by Wells Fargo Bank and investor Bryant Riley.
If the case were dismissed, Wells Fargo would foreclose to get back what it is owed, and Riley would get the rest, he said.
“The unsecured creditors would end up holding an empty bag,” he said.
Four weeks after resuming production and adopting a new factory-direct business plan, Junction City, Ore.-based Country Coach Holdings LLC has sold two coaches and taken deposits on several others, a company spokesman said Monday (May 4).
“We’re roughly on schedule,” Matt Howard told The Register-Guard, Eugene. “We feel encouraged by the momentum.”
As part of an agreement with creditor Wells Fargo Bank, Country Coach is planning to sell about one coach per week. Country Coach officials spoke last Friday with representatives from Wells Fargo, and the company continues to feel positive about its conversations with the bank, he said.
Tom Unger, a Wells Fargo spokesman, said Monday that it was too early in the process for bank officials to express an opinion about Country Coach’s production and sales.
Country Coach, a privately held recreational vehicle maker, is in Chapter 11 bankruptcy, a legal process intended to give distressed companies time to reorganize their finances while getting breathing room from creditors.
The factory ceased production in mid-November, putting about 500 employees out of work. Under a deal reached with Wells Fargo, Country Coach resumed production April 6, albeit on a far smaller scale. About 100 workers are completing coaches at a rate of about one a week.
Under its new business model, Country Coach is attempting to sell its coaches direct from the factory, rather than through a dealer network as it has in the past. Whether the company can survive and emerge from bankruptcy depends on whether it can find enough customers willing to part with $300,000 or more for a luxury item at a time when the economy remains mired in recession.
The biggest challenge facing the company, Howard said, is a market that’s been flooded with discounted coaches as a result of the bankruptcies of rival RV makers Monaco Coach Corp. and Fleetwood Enterprises Inc.
“There’s so much inventory on the market that we need to make sure the value proposition of Country Coach is abundantly clear and we are not just another commodity,” he said.
The company delivered two coaches last week from the factory, one to a couple from California, the other to a couple from Alberta, Howard said. Neither had owned a Country Coach before, and both bought 2009 Magna 630s, one of Country Coach’s high-end models that retails for more than $600,000.
In addition, Country Coach has taken one deposit equal to more than half the value of the coach, plus several other smaller deposits, he said.
Howard announced the sales last week on Twitter, the micro-blogging, social networking site. Howard has been posting short messages to Twitter periodically for several weeks as an experiment. Country Coach has about 50 “followers” on Twitter.
“It takes minimal resources for us to do it,” he said.