Editor’s Note: The following is an excerpt from an article authored by freelancer Ty Adams profiling former Monaco RV executive Kay Toolson that ran in the March issue of Family Motor Coaching magazine.
If you ask Kay Toolson, he’ll joke that if he were smarter he would have retired in 2005 before the American economy ruptured. “I would have retired with a lot more money,” he said chuckling. “No, I’m obviously fine. I’ve had a great life and a great career, but I’d be lying if I said the last few years were a breeze.”
Toolson retired on June 30, 2011 after 40 years in the RV industry and 25 years as CEO for Monaco Coach Corp. The company was severely affected by the U.S. banking implosion and hit hard times in 2008, filing for Chapter 11 bankruptcy. Toolson and his leadership team negotiated the sales of certain Monaco Coach assets to Navistar International Corp. and helped give jobs back to some of the people who lost them in the bankruptcy. After the sale, estimated at $47 million, the company became Monaco RV LLC.
“One of my greatest thrills was being able to retire and save the brands and give jobs back to so many wonderful Monaco employees,” he said.
Toolson, a native of Smithfield, Utah, entered into several business ventures – including minority owner and executive vice president of Los Angeles-based high-line motorhome builder Executive Industries – before receiving a proposal to purchase Monaco, then based in Eugene, Ore.
He and his wife, Judy, had talked about leaving Los Angeles, so they flew to Oregon to investigate. Ironically, their initial reaction was not positive.
“I just had this hollow feeling, and we decided we weren’t going to do it,” Toolson said,
However, a bank in Portland promised to provide financing for the purchase and eventually swayed them. Toolson resigned, but during a retirement party he received a call from his attorney.
“He said that the bank wasn’t going to back the deal. And, honest to God, the phone went dead,” he recalled. “Judy and I got in the car and drove up there, and it was the longest drive of my life.”
Obviously, the deal went through in the end but it was a scramble to find financial backers. Toolson eventually brokered a deal with long-time Indiana investor Bill Warrick and they purchased the company from Eugene Mayor Brian Obie. Toolson became president and Warrick was chairman. It was 1987.
Over the next 18 years, the company’s annual sales grew from $17 million to more than $1.4 billion. In 1993, Toolson, the leadership team and a small number of outside investors bought out Warrick and later that year took the company public, which allowed them to pay off the other investors.
When asked to name the highlights of his time at Monaco, Toolson replied, “Just watching people grow, playing a part in helping them achieve their dreams.
These days, Toolson indulges in his favorite hobbies of fly fishing and golf, and most importantly spending more time with Judy.
“We have a house on the Oregon coast, so we spend a lot of time there walking the beach,” Toolson said. “It’s so neat, because when I’m there, I’m just another ‘old man’ in town. It’s kind of fun to be anonymous.”
Kay and Judy also have time to return to an old love – RVing. They have belonged to FMCA since 1986.
“We’ve already been to 48 of the 50 states, but we’ll do more of that,” he said. “We used to have so much fun RVing, but then I got too busy running the company, so it will be great to get back to it.
When he looks back at his career, what’s the main lesson Toolson has taken from the experience? “Every day, you just keep trying and you keep getting up after you get your teeth knocked out. You only fail if you quit.”
Kay Toolson, who will officially step down July 1 as president of Monaco RV LLC, delivered a parting speech to the company’s dealer body during the June 20-22 Dealer Congress 2011 at the Gaylord Texan Resort in Grapevine, Texas.
Toolson first assured attendees, representing 68 of the Coburg, Ore.-based company’s dealers, that he was leaving operations in capable hands. Bill Osborne, a 30-plus year veteran of the auto industry, will take over for Toolson in July, assuming the role of vice president of custom products for Navistar Inc.’s Monaco and Workhorse Custom Chassis LLC subsidiaries.
“Bill will be an asset in working with the rest of the management team to ensure Monaco RV continues to flourish and grow well into the future,” Toolson said. “We will redouble our efforts to ensure that Monaco RV is the best partner to all of you – both with motorized and towable products, as well as service and parts.”
Although, he will be transitioning into retirement – “there are lots of golf courses I haven’t played and so many fish left to catch” – Toolson indicated that he would still be involved with Monaco in a part-time capacity.
“I’m not going to say goodbye,” he said. “I’m still going to be around, doing a few things where I can be of help to the Monaco and Navistar teams. I will look forward to running into you down the road.”
Looking back, the Smithville, Utah, native recapped the highlights of a career in the RV industry that began in 1972 and culminated with a 25-year run as the head of Monaco Coach Corp. The company fell victim to the economy in March 2009 and was purchased out of Chapter 11 bankruptcy later that year by Navistar.
“When I started out, I was in Dallas and I heard about this company, Redman Industries, that was looking to get into the RV industry,” he said. “They offered me a job as product manager. My wife and I moved to Southern California and I started Redman in the motorhome business.”
Toolson spent a couple of years at Redman, “enduring the 1973 gas crisis,” before joining Michigan General, which owned King’s Highway Mobile Industries in Los Angeles.
“I spent eight years there, mainly because I liked working with high-line products,” Toolson said. “Then came a chance to buy into (Anaheim, Calif.-based) Executive Industries as a minority owner. I was there for four years, when I got the opportunity to go to Oregon with some backers and buy Monaco. That was in 1986.
“Monaco had 67 employees, it did $13 million in business and it was losing money. Over the next decade or so, we built the company to $1.4 billion in annual revenue, and of course, saw a lot of success.”
Toolson emphasized that over the years, the company’s dealers played a large role in attaining that success.
“We grew and flourished together, and I can’t tell you how much I enjoyed building relationships with so many of you in this room,” he said. “Over the years we’ve become friends, and I thank you for that friendship and support.”
Kay Toolson, president of Monaco RV LLC, will retire the end of June.
After 25 years at the helm of Monaco RV and Monaco Coach Corp., Toolson will step away from the day-to-day operations, but still be involved in special projects and take an advisory role in the company, according to a news release.
A native of Smithfield, Utah, Toolson joined the recreational vehicle industry in 1972 as product manager for Kings Highway Mobile Industries in Los Angeles, where he later held the positions of national sales manager and vice president.
In 1982, he joined Anaheim, Calif.-based motorhome manufacturer Executive Industries as a minority owner and executive vice president of operations, a position he held until 1986.
Toolson joined Oregon-based Monaco Coach Corp. in 1986 and completed a management buyout of the company in 1993, and took the company public that same year. He served as president for the company from 1986 to 2000, CEO from 1986 to 2009, and as chairman from 1993 to 2009.
During his tenure with Monaco , the company grew from a small, specialty RV manufacturer recording $17 million in annual revenue to a 5,70-employee company producing a broad spectrum of RVs and annual revenue in excess of $1.4 billion.
The company filed for bankruptcy in 2009 and was subsequently purchased by Navistar Inc. Since that purchase, Toolson has served as president of Monaco RV.
Monaco RV’s current management team will remain, reporting to William H. Osborne, the newly named vice president of custom products for Navistar Inc. In this role, Osborne will have accountability for the Monaco RV and Workhorse business units.
Even though Monaco Coach Corp. has struck a deal to sell its major assets to a subsidiary of Navistar International for $52 million, the Coburg, Ore.-based RV maker is racing to close the deal before it runs out of money and creditors run out of patience, according to The Register-Guard, Eugene, Ore.
At a hearing Friday (April 24) in U.S. Bankruptcy Court in Delaware, an attorney for Monaco said the company had signed an asset purchase agreement with Workhorse International Holding Co., a Navistar subsidiary. The company’s main secured lenders – Bank of America and Ableco – have agreed to provide it with at least one more week of operating cash while Monaco officials try to “get them comfortable” with what they would be paid in the sale, said Robert Orgel, one of Monaco’s bankruptcy attorneys.
“How much they are to be paid is the key issue,” Orgel said. “The amount it takes to satisfy them may well be harder to achieve the longer it takes us to close a sale because we are incurring expenses every day and the ability to sell assets is limited.”
When it filed for Chapter 11 bankruptcy on March 5, Monaco owed Bank of America $38 million and Ableco $37 million. In a Chapter 11 case, a financially stressed company is given protection from creditors while it reorganizes its finances.
Orgel asked Judge Kevin Carey for an expedited schedule so the company could be put up for auction and the deal could be consummated by June 1. If the sale doesn’t close by then, creditors could move to liquidate Monaco.
But an attorney for the committee for unsecured creditors, Donald Detweiler, told the judge that the sale appears to benefit only the two lenders. Liquidation of Monaco’s assets or some other alternative may provide a better return to unsecured creditors, he said.
“There may be a better way to see value than what’s being proposed here,” he said.
Carey said he expects any reorganization plan to provide some value for unsecured creditors.
“The court can’t create value when value isn’t there, but I want a fair shot at unsecured creditors getting there,” he said.
Unsecured creditors are those that don’t have any legal claim on a company’s land, buildings or equipment. They get paid only after creditors with secured positions, often banks, get paid. If they get paid, unsecured creditors are likely to get something less than the total amount they’re owed. The company has thousands of unsecured creditors.
In a court filing, Monaco attorneys argued that an asset sale to a buyer that would operate the RV maker as a going business would provide the most benefit to everyone concerned. Doing so would “create direct value for creditors, saving 2,000 or more jobs in communities in Oregon and Indiana … and creating ongoing value and revenue for a large number of (Monaco) vendors, dealers and other creditors.”
It’s not clear from the company’s court filings how many people would be employed in Coburg and Indiana if the factory were to resume production.
Navistar, a massive Illinois corporation that builds diesel engines, school buses, heavy trucks and military vehicles, announced a month ago that it had signed a nonbinding letter of intent to buy Monaco’s core assets for up to $50 million. On Wednesday (April 22), Monaco signed an asset purchase agreement with Workhorse, a Navistar subsidiary serving as a “stalking horse” purchaser. In bankruptcy cases, a stalking horse bid sets a threshold price so that other potential bidders can’t low-ball the purchase price.
Judge Carey will conduct another hearing this week on bid procedures and other issues, including whether the secured creditors are willing to extend additional operating credit to Monaco while the sale moves forward. A sales auction would be conducted in mid-May, followed by another hearing May 22 at which Monaco would be seeking court approval for a sale and creditors could seek to block it.
Under the terms of the deal, Navistar would obtain certain manufacturing facilities located in Indiana and Oregon. In addition, Navistar will acquire all brands, intellectual property, inventories and equipment relating to Monaco’s motorized and towable recreational vehicle segments.
The deal would not include Monaco’s resort properties, which the company is attempting to auction separately. Nor would it include its Roadmaster Cargo Trailer business and several industrial properties.
“We are excited to move forward with the tremendous resources of Navistar supporting our great products,” Monaco CEO Kay Toolson said. “Everyone at the company is ready and committed to again build the highest quality RVs in the industry, offer the best customer support and bring jobs back into the communities in which we operate. We appreciate the patience of our employees, dealers, suppliers and RV owners as we navigated through this challenging environment.”
The company said it appears that no proceeds from the sale would be available for distribution to shareholders.
Monaco Coach announced today (April 24) that it has signed a definitive agreement to sell substantially all of the company’s RV manufacturing assets to a unit of Navistar Inc. for approximately $52 million. The Monaco board of directors unanimously approved the transaction.
The closing of the proposed transaction is scheduled to occur no later than June 1, subject to certain closing conditions and completion of the bankruptcy court approval process, including the auction process and the entry of a final non-appealable sale order of the bankruptcy court pursuant to Section 363 of Title 11 authorizing the transfer of the purchased assets to Navistar. Monaco filed for Chapter 11 bankruptcy relief on March 5 in Delaware.
The transaction includes certain manufacturing facilities located in Indiana and Oregon. In addition, Navistar will acquire all brands, intellectual property, inventories and equipment relating to Monaco’s motorized and towable recreational vehicle segments.
Excluded from the transaction are the Motorhome Resorts segment, the Roadmaster Cargo Trailer business and several industrial properties. Monaco continues to work with other interested parties regarding the acquisition of its Motorhome Resorts segment and other assets held for sale.
“We are excited to move forward with the tremendous resources of Navistar, Inc. supporting our great products,” said Kay Toolson, Monaco chairman and CEO. “Everyone at the company is ready and committed to again build the highest quality RVs in the industry, offer the best customer support and bring jobs back into the communities in which we operate. We appreciate the patience of our employees, dealers, suppliers and RV owners as we navigated through this challenging environment.”
Navistar, with nearly $15 billion in annual sales, is a leading global manufacturer of commercial vehicles, military vehicles, diesel engines and related parts and services.
Monaco cautioned that it presently appears there will be no proceeds ultimately available to the company from this transaction and other potential asset sales sufficient, after payments to creditors, to result in any distribution to the shareholders of Monaco.
Navistar Inc. would acquire certain RV-related assets of Monaco Coach Corp. and assume certain liabilities associated with that business under a non-binding letter of intent signed this week, Monaco announced late today (March 26).
Navistar, with nearly $15 billion in annual sales, is a leading global manufacturer of commercial vehicles, military vehicles, diesel engines and related parts and services.
The letter of intent contemplates that Monaco and Navistar will work to sign a definitive asset purchase agreement during early April, according to the Monaco release. Following the completion of due diligence and the bankruptcy court approval process, including the auction process, the parties intend to close the transaction shortly after obtaining the entry of a final non-appealable sale order of the bankruptcy court pursuant to Section 363 of Title 11, authorizing the transfer of purchased assets to Navistar.
Monaco continues to work with other interested parties regarding the acquisition of its Motorhome Resorts segment and other assets held for sale.
“We look forward to working with Navistar to complete this transaction and ultimately become a part of one of the nation’s most respected companies,” said Kay Toolson, Monaco chairman and CEO. “This is a great opportunity for our employees, dealers, suppliers and the communities in which we operate. We look forward to continuing the Monaco Coach brands and our legacy of producing quality and innovative recreational vehicles for our owners.”
Headquartered in Coburg, Ore., Monaco has manufacturing facilities in Oregon and Indiana and offers a variety of RVs, from entry-level priced towables to custom-made luxury models under the Monaco, Holiday Rambler, Safari, Beaver, McKenzie and R-Vision brand names.
“If we are able to reach agreement, the purchase of certain Monaco assets would fit our strategy of leveraging our assets to expand our diesel business, serve the end customer and would also complement our Workhorse custom chassis business,” said Jack Allen, president of Navistar’s North American truck group. “Any asset purchase would fall within our current capital expenditure program for fiscal 2009.”
The proposed purchase is for Monaco assets, not its stock.
Proceeds of the purchase will go toward Monaco’s secured creditors – its two lenders, Bank of America and Abelco LLC.
Based on information Monaco provided in bankruptcy filings earlier this week, the $50 million amount does not appear to be sufficient to meet any of the company’s unsecured creditors. The filing estimated that the company had between 25,000 and 50,000 creditors.
Daniel C. Ustian, Navistar chairman, president and CEO, sits on the Monaco board. Navistar and Monaco are joint owners of the Monaco chassis plant in Elkhart, Ind., with Navistar owning a majority share.