Monday, February 20, 2012
WHAT IS GOING TO HAPPEN TO MVP RV?
FROM RV-PRO.COM:
Fate of Shuttered MVP RV Lies with Liquidation Company, Highest Bidder
By: Anthony Bowe
Friday, February 17, 2012
All assets of MVP RV Inc. are in the possession of an asset liquidation company currently fielding multiple “serious” offers for a purchase of the company, RV PRO has learned.
“If we’re unable to get a reasonable offer, then we would hold a public auction of the manufacturing assets and list the real estate for sale, or put it into a real estate auction,” said Michael L. Joncich, a manager in the adjustment bureau for the Credit Management Association (CMA), a nonprofit company that currently controls MVP RV’s assets. “$37 million is owed to the creditors – that’s what I’d like to get and pay everybody in full. We don’t have a specific asking price. Obviously, the highest offer will be the one that we will try to achieve.”
Winston Chung, a wealthy entrepreneur from Guangdong, China, became majority owner of MVP RV in 2010.
The Riverside, Calif.-based RV manufacturer closed business operations and laid off its entire workforce in January after losing access to its working capital due to an ongoing legal dispute involving majority owner Winston Chung and his former business partners, according to Scott Degnan, MVP RV’s former vice president of sales and marketing.
MVP RV avoided filing Chapter 7 bankruptcy by agreeing to a “general assignment” liquidation contract with CMA, which managed similar proceedings for Weekend Warrior, Alfa Leisure, National RV, and portions of Fleetwood Enterprises, according to Joncich.
“General assignment is a way for companies to liquidate, which is comparable to a Chapter 7 bankruptcy proceeding, but it is not a bankruptcy filing – it’s not filed in federal court. It’s an alternative way for a company to liquidate its assets and pay its creditors,” he said.
“Winston has just made another offer,” Degnan said. "He’s made several offers over the last month or so to repurchase all the assets of MVP – the buildings, the intellectual property, all the equipment, the entire business.Chung – despite his financial struggles and other recent failed business ventures in California – is regarded as a leading candidate to repurchase the company’s assets before they fall into liquidation, Degnan told RV PRO. The former majority owner, who hails from a Chinese province neighboring Hong Kong, is currently embroiled in a lawsuit against his former business partners within Fadar International.
Winston Chung's home provice of Guangdong, China, neighbors Hong Kong on the South China Sea. Map courtesy Google Maps.
“Winston has the other legal issues that have been complicating the whole thing. It’s not a matter of him not wanting the company; it’s a matter of just physically being able to get it done. We’re hopeful this time it’ll happen,” he said.
Chung has submitted approximately four offers to repurchase MVP RV’s assets from CMA – the latest coming this week, Degnan said.
“The offer (Chung) submitted a few days ago, he should hear back on whether the offer has been accepted or not within the next few days,” he said. “The reason there’s been several offers made by Winston is because each time he’s made an offer, (CMA) has said ‘OK, we need to adjust it somewhat. It’s not accepted, but it’s close.’”
Joncich wouldn’t confirm CMA’s negotiations with Chung and said the outcome of the case remains uncertain.
“We have not sold the assets yet, besides the remaining inventory to the existing dealers,” Joncich said. “We’re negotiating with more than one interested party in purchasing the assets, and it’ll depend on how we conclude this sale as to what is the ultimate disposition.
“Is there somebody that’s going to resume business there, or is it going to be broken down and liquidated? I don’t know. I really don’t know what the end result will be here,” he said.
CMA has identified 273 companies eligible to file claims to obtain money owed to them by MVP RV. Roughly $20 million of the $37 million due to creditors is allocated to the company’s real estate mortgage, according to CMA, citing MVP RV’s financial books. Joncich said he was unable to report how many claims have been filed thus far.
The MVP RV executive team (L to R): Pablo Carmona, chief operating officer and president of manufacturing; Roger J. Humeston, chief financial officer, chief administrative officer and corporate secretary; Brad B. Williams, chief executive officer and president; and Scott Degnan, vice president of sales and marketing.
Degnan is optimistic that MVP RV will reopen business, but he wouldn’t speculate as to when that may happen.
“We haven’t moved into liquidation yet. CMA could have put us into liquidation two months ago, but they haven’t because they keep getting these good faith offers and these letters of intent from Winston,” he said. “They’ve held off putting the company into liquidation and we’re hoping that it won’t get to the point. I don’t think it will.”
Degnan said he has turned down several job offers as he awaits official word on MVP RV’s future.
“This has been a waiting game. I’m just preparing for going forward. I’ve been working on business plans, product offerings and things like that so when we get started again, we can hit the ground running,” he said. “It’s frustrating, especially at this time of year when everything is starting to pop with all the RV shows.”
If MVP RV is able to restore operations, Degnan acknowledged that there may be a short-term backlash from the company’s dealer network.
“But, our products were so successful, and we grew so quickly, and our dealers were doing so well at turning our product quickly, that I think it’ll be short lived,” he said. “Once we get back going again and we’re able to start production on a regular basis, I think the dealers will fall right back in line because, really, our products were very good – they had all the right price points in the right segments.”
MVP RV executives have remained in contact with dealers, but typically are unable to offer substantial updates on the fluid situation. The company’s leadership is also staying in contact with several members of its staff.
“We’re staying in contact with the key employees that are going to be a part of the core team going forward,” Degnan said. “We’re all assuming that this is going to be put together.”
Fate of Shuttered MVP RV Lies with Liquidation Company, Highest Bidder
By: Anthony Bowe
Friday, February 17, 2012
All assets of MVP RV Inc. are in the possession of an asset liquidation company currently fielding multiple “serious” offers for a purchase of the company, RV PRO has learned.
“If we’re unable to get a reasonable offer, then we would hold a public auction of the manufacturing assets and list the real estate for sale, or put it into a real estate auction,” said Michael L. Joncich, a manager in the adjustment bureau for the Credit Management Association (CMA), a nonprofit company that currently controls MVP RV’s assets. “$37 million is owed to the creditors – that’s what I’d like to get and pay everybody in full. We don’t have a specific asking price. Obviously, the highest offer will be the one that we will try to achieve.”
Winston Chung, a wealthy entrepreneur from Guangdong, China, became majority owner of MVP RV in 2010.
The Riverside, Calif.-based RV manufacturer closed business operations and laid off its entire workforce in January after losing access to its working capital due to an ongoing legal dispute involving majority owner Winston Chung and his former business partners, according to Scott Degnan, MVP RV’s former vice president of sales and marketing.
MVP RV avoided filing Chapter 7 bankruptcy by agreeing to a “general assignment” liquidation contract with CMA, which managed similar proceedings for Weekend Warrior, Alfa Leisure, National RV, and portions of Fleetwood Enterprises, according to Joncich.
“General assignment is a way for companies to liquidate, which is comparable to a Chapter 7 bankruptcy proceeding, but it is not a bankruptcy filing – it’s not filed in federal court. It’s an alternative way for a company to liquidate its assets and pay its creditors,” he said.
“Winston has just made another offer,” Degnan said. "He’s made several offers over the last month or so to repurchase all the assets of MVP – the buildings, the intellectual property, all the equipment, the entire business.Chung – despite his financial struggles and other recent failed business ventures in California – is regarded as a leading candidate to repurchase the company’s assets before they fall into liquidation, Degnan told RV PRO. The former majority owner, who hails from a Chinese province neighboring Hong Kong, is currently embroiled in a lawsuit against his former business partners within Fadar International.
Winston Chung's home provice of Guangdong, China, neighbors Hong Kong on the South China Sea. Map courtesy Google Maps.
“Winston has the other legal issues that have been complicating the whole thing. It’s not a matter of him not wanting the company; it’s a matter of just physically being able to get it done. We’re hopeful this time it’ll happen,” he said.
Chung has submitted approximately four offers to repurchase MVP RV’s assets from CMA – the latest coming this week, Degnan said.
“The offer (Chung) submitted a few days ago, he should hear back on whether the offer has been accepted or not within the next few days,” he said. “The reason there’s been several offers made by Winston is because each time he’s made an offer, (CMA) has said ‘OK, we need to adjust it somewhat. It’s not accepted, but it’s close.’”
Joncich wouldn’t confirm CMA’s negotiations with Chung and said the outcome of the case remains uncertain.
“We have not sold the assets yet, besides the remaining inventory to the existing dealers,” Joncich said. “We’re negotiating with more than one interested party in purchasing the assets, and it’ll depend on how we conclude this sale as to what is the ultimate disposition.
“Is there somebody that’s going to resume business there, or is it going to be broken down and liquidated? I don’t know. I really don’t know what the end result will be here,” he said.
CMA has identified 273 companies eligible to file claims to obtain money owed to them by MVP RV. Roughly $20 million of the $37 million due to creditors is allocated to the company’s real estate mortgage, according to CMA, citing MVP RV’s financial books. Joncich said he was unable to report how many claims have been filed thus far.
The MVP RV executive team (L to R): Pablo Carmona, chief operating officer and president of manufacturing; Roger J. Humeston, chief financial officer, chief administrative officer and corporate secretary; Brad B. Williams, chief executive officer and president; and Scott Degnan, vice president of sales and marketing.
Degnan is optimistic that MVP RV will reopen business, but he wouldn’t speculate as to when that may happen.
“We haven’t moved into liquidation yet. CMA could have put us into liquidation two months ago, but they haven’t because they keep getting these good faith offers and these letters of intent from Winston,” he said. “They’ve held off putting the company into liquidation and we’re hoping that it won’t get to the point. I don’t think it will.”
Degnan said he has turned down several job offers as he awaits official word on MVP RV’s future.
“This has been a waiting game. I’m just preparing for going forward. I’ve been working on business plans, product offerings and things like that so when we get started again, we can hit the ground running,” he said. “It’s frustrating, especially at this time of year when everything is starting to pop with all the RV shows.”
If MVP RV is able to restore operations, Degnan acknowledged that there may be a short-term backlash from the company’s dealer network.
“But, our products were so successful, and we grew so quickly, and our dealers were doing so well at turning our product quickly, that I think it’ll be short lived,” he said. “Once we get back going again and we’re able to start production on a regular basis, I think the dealers will fall right back in line because, really, our products were very good – they had all the right price points in the right segments.”
MVP RV executives have remained in contact with dealers, but typically are unable to offer substantial updates on the fluid situation. The company’s leadership is also staying in contact with several members of its staff.
“We’re staying in contact with the key employees that are going to be a part of the core team going forward,” Degnan said. “We’re all assuming that this is going to be put together.”
