EUGENE, Ore. (AP) -- Lawyers for Junction City RV maker Country Coach and its main creditor have told a U.S. Bankruptcy Court judge the company is out of money and nearly out of options.
Country Coach has been in Chapter 11 bankruptcy protection since March as it seek to reorganize its finances and business model. But even with a vastly smaller work force, the privately held company founded in 1968 says it has posted losses of $8.8 million since April.
Wilson Muhlheim, an attorney for Wells Fargo & Co., told Judge Albert Radcliffe that Country Coach has consistently been in default on the terms of its loan agreement. "Now we're at the end of the road," Muhlheim said. "There is no deal on the table."
Country Coach CEO Jay Howard testified Monday that a potential outside investor, Roger McCombs, might be the company's final hope. McCombs toured the Country Coach plant in October and he's serious about making a bid, Howard said.
McCombs is founder and chairman of Composite Power Corp., a Richland, Wash.-based company that makes utility poles. Howard said Country Coach will know by early next month whether McCombs is in or out.
"If not, we have no other sponsor," Howard said.
If the McCombs deal doesn't happen, Country Coach's Chapter 11 case will be converted to Chapter 7 so the company's assets can be liquidated, Radcliffe ruled.
Howard said the company has 10 coaches completed and ready for sale, with a total value ranging from $5 million to $9 million, depending on if they are sold at auction or retail.
The company stopped building coaches in September and recently laid off its remaining staff; only Howard and Chief Financial Officer Mark Andersen remain.
Even if McCombs negotiates a deal with Wells Fargo to settle the debt, he will have to agree to terms with Lee Joint Venture, Country Coach's landlord.
David Wade, the landlord's attorney, said the Lee group was prepared to start eviction proceedings unless someone makes good on $160,000 owed in property taxes and $263,000 to repair the roofs of the factory buildings.
