Thursday, February 12, 2009
NOW BEAUDRY RV IS FIGHTING OFF THE BANKS TO SURVIVE
In a bid to stay intact, Beaudry RV has filed a suit in bankruptcy court to stop Bank of America, Comerica Bank and Wells Fargo Bank from seizing real estate used to secure a $42 million loan.
The Arizona Daily Star reported that saddled with about $14 million in debt from that loan, Beaudry RV and its related corporations filed for Chapter 11 in November. Despite the action, the three banks filed suit in Pima County Superior Court in December seeking full payment of the loan's balance.
Beaudry RV can't pay the balance and is unable to refinance its debt in tight credit markets, said attorney Michael McGrath, who is representing the longtime Southern Arizona RV dealer. The four properties tied to the loan, which owner Bob Beaudry guaranteed, are also crucial to Beaudry RV's ability to reorganize because of significant equity, McGrath said. Court documents show the properties are worth between $27 million and $32 million.
"They want to be paid off on the real estate loans, and any pressure they could possibly bring to bear, they are bringing it," McGrath said. "We are not able to sell (the properties), and what we have done, and are going to resume this month, is making monthly debt service."
Beaudry RV employs about 170 people between its two dealerships in Tucson and Chandler. McGrath said those jobs "hang in the balance" of the suit's outcome.
According to the Daily Star, court documents show Beaudry RV began facing financial trouble in 2007 when the RV business began to slow as fuel costs soared. As the credit market tightened, the three banks restricted the line of credit that had been available to Beaudry RV to stock its inventory.
Beaudry RV found financing with General Electric for a flooring loan — financing dealers use to buy vehicles for their lots — but that prompted the three banks to demand payment for the real estate loans.
But Beaudry RV couldn't find a new lender, so it began to address its debt through the sale of assets, reducing it by $27 million since July 2008.
Meanwhile, Beaudry has put his personal money into the company in an attempt to bring it back to solvency, addressing debt and spending $500,000 to cover payroll expenses in November 2008, the claim says.
The claim says General Electric has continued to offer financing to Beaudry in exchange for equity interests, making the prospect of reorganization possible.
The Arizona Daily Star reported that saddled with about $14 million in debt from that loan, Beaudry RV and its related corporations filed for Chapter 11 in November. Despite the action, the three banks filed suit in Pima County Superior Court in December seeking full payment of the loan's balance.
Beaudry RV can't pay the balance and is unable to refinance its debt in tight credit markets, said attorney Michael McGrath, who is representing the longtime Southern Arizona RV dealer. The four properties tied to the loan, which owner Bob Beaudry guaranteed, are also crucial to Beaudry RV's ability to reorganize because of significant equity, McGrath said. Court documents show the properties are worth between $27 million and $32 million.
"They want to be paid off on the real estate loans, and any pressure they could possibly bring to bear, they are bringing it," McGrath said. "We are not able to sell (the properties), and what we have done, and are going to resume this month, is making monthly debt service."
Beaudry RV employs about 170 people between its two dealerships in Tucson and Chandler. McGrath said those jobs "hang in the balance" of the suit's outcome.
According to the Daily Star, court documents show Beaudry RV began facing financial trouble in 2007 when the RV business began to slow as fuel costs soared. As the credit market tightened, the three banks restricted the line of credit that had been available to Beaudry RV to stock its inventory.
Beaudry RV found financing with General Electric for a flooring loan — financing dealers use to buy vehicles for their lots — but that prompted the three banks to demand payment for the real estate loans.
But Beaudry RV couldn't find a new lender, so it began to address its debt through the sale of assets, reducing it by $27 million since July 2008.
Meanwhile, Beaudry has put his personal money into the company in an attempt to bring it back to solvency, addressing debt and spending $500,000 to cover payroll expenses in November 2008, the claim says.
The claim says General Electric has continued to offer financing to Beaudry in exchange for equity interests, making the prospect of reorganization possible.
