Friday, February 13, 2009
Country Coach to survive a while longer
A U.S. bankruptcy judge on Thursday denied Wells Fargo’s request to be allowed to immediately seize assets of Country Coach, saying it is too early in the bankruptcy process to allow the financially troubled recreational vehicle maker to be liquidated.
The ruling allows Country Coach to survive at least for a while longer and to try to consummate a deal with a Los Angeles private equity firm that says it has serious interest in buying the privately held Junction City company.
Wells Fargo sued Country Coach last month in U.S. District Court in an effort to recover about $8.5 million the RV maker owed it. But before that case could be resolved, Country Coach’s majority owner — acting as a creditor to the company — filed to put the company into involuntary bankruptcy.
That action automatically put Wells Fargo’s suit on hold. So the bank’s lawyers went to bankruptcy court to argue that Wells Fargo was entitled to seize all of the personal property assets of Country Coach — effectively everything that isn’t real estate — because the company had granted the bank first-priority status when it pledged the collateral.
The Country Coach plant and its 500 employees have been idle since early December, and company officials have said the company will close for good by the end of this month unless it finds outside investment.
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