Country Coach Forced Into Bankruptcy
A federal judge ordered Country Coach LLC into Chapter 11 bankruptcy protection on March 5, one month after the Junction City, Ore., RV maker’s majority owner filed a petition to put the company into involuntary bankruptcy.
U.S. Bankruptcy Judge Albert Radcliffe granted the request by Bryant Riley to put the company into bankruptcy. A Chapter 11 filing puts the company under the protection of the bankruptcy court while attempting to reorganize its finances.
The judge gave Country Coach three days to provide a list of its 20 largest secured creditors.
Riley, a Los Angeles investment banker, led a group of investors that bought Country Coach in 2007 for $38 million. But one of his companies, Riley Investment Management, also is a creditor of Country Coach’s, and it was in his role as a creditor that he filed the involuntary bankruptcy petition.
Those dual roles — creditor and owner — drew sharp criticism last month by a lawyer for another creditor, Wells Fargo, who said it represented a clear conflict of interest.
Wells Fargo is among Country Coach’s largest creditors. The bank sued Country Coach in January in U.S. District Court in an effort to recover about $8.5 million, but that suit was put on hold after the involuntary bankruptcy filing.
Country Coach’s factory in Junction City has been shut down since early December, putting about 500 employees out of work. On New Year’s Eve, CEO Jay Howard notified employees that company could close for good by the end of February unless it was able to obtain new financing.
Though a lawyer for Riley said in court last month that a Los Angeles private equity firm was interested in buying and operating Country Coach, no deal has emerged.