PORTLAND, Oregon — Luxury motorcoach manufacturer Country Coach, which has filed for Chapter 11 protection, will reopen with a reduced work force of 100 with the approval of a federal judge.
The company, whose Junction City factory has been shut down since November, said a few employees returned to work Tuesday and others should be back on the job by the middle of next week.
The company plans to finish a backlog of orders, including nine coaches ready to be sold and about 40 in various stages of production. It halted work on those orders as its financial troubles worsened.
In bankruptcy court, the company has presented a plan that would enable it to operate under a factory direct model with $2 million in initial financing from Wells Fargo, said Matt Howard, vice president of sales and marketing.
"We've submitted a plan, hoping to emerge from the Chapter 11," Howard said Tuesday. "We're getting started."
Country Coach, like many in the recreational vehicle industry, has been hit hard by a down economy that's undercut consumer spending. Headquartered in Lane County, Country Coach was forced to seek bankruptcy protection in February by three of its creditors, after Wells Fargo attempted to sue for the repayment of a $25 million loan.
According to court documents, Bankruptcy Judge Albert E. Radcliffe on Monday allowed the proposed credit agreement with Wells Fargo on an interim basis, with the bank's attorney submitting the order by today.
As of Tuesday afternoon, Wells Fargo spokesman Tom Unger said the bank had yet to reach an agreement with Country Coach on the terms of the financing.
"It's still in progress in the negotiations," Unger said. "It's not a done deal."
Country Coach's long-term proposal is to have customers place orders directly from the company's Web site, building motorcoaches as orders are placed. At its peak in 2006, the company employed 1,700 workers, but it would have far fewer workers after reorganization.
Source: OregonLive.com/Portland Oregonian