Assets of bankrupt Coach America will be auctioned off soon.
Slightly more than a month after Judge Kevin Gross of the United States Bankruptcy Court for the District of Delaware granted a motion to help support company customers, employees, suppliers and business partners, Gross has now signed off on a bidding procedure to sale company assets. The court ruling gives the go-ahead for the bid deadline for April 13 and the auction on April 18 in New York. A number of industry officials claim some potential buyers could be interested in buying pieces of the company.
Coach America Holdings Inc. filed for Chapter 11 bankruptcy in early January in the U.S. Bankruptcy Court for the District of Delaware. As of late November the company, with its more than 3,000-vehicle fleet, had $402 million in debts and some $274 million in assets. Soon after filing Chapter 11, Standard&Poor’s Ratings Services lowered Coach America Holdings Inc. to ‘D’ from ‘CCC’. At the same time, Standard&Poor’s lowered its second-lien debt issue rating to ‘D’ from ‘CC’.
Coach America’s CEO George Maney had said his company’s restructuring process would have Coach America moving forward with normal operations, including paying vendors and suppliers in the ordinary course of business. Two notable unsecured creditors are ABC Companies, which is owed a reported $428,185, and MCI Service Parts, owed more than $400,000.
In late November 2006, Fenway Partners, a middle market private equity firm, entered into an agreement to acquire Coach America, then the largest tour and charter bus operator and the second largest motorcoach services provider in the U.S., from Kohlberg & Company. The New York firm acquired Coach America for $60 million. The company was generating $393 million in revenues at that time. Fenway became the company’s largest shareholder when it invested in Coach America back in 2006.
Red flags around the company’s financial situation appeared in February 2011 when Coach America’s lenders, along with Fenway Partners, amended and restated the company’s senior secured credit facility new investment and debt-to-equity conversion together totaled close to $50 million.