Update: The long anticipated preference claims were filed on March 4, 2011. To see a discussion of these preference claims click this link.
On March 5, 2009 (the “Petition Date”), the Monaco Coach Corporation and 12 related entities[FN1] commenced these cases by filing voluntary petitions for relief under chapter 11 the Bankruptcy Code. As of June 4, 2009, the Debtors closed the sales of their luxury motorhome resort and core manufacturing assets. That same day, the Debtors’ authorization to use cash collateral expired. Without a source of cash to fund post-petition administrative expense, the Debtors quickly moved to convert the cases to Chapter 7. The cases were converted on June 30, 2009.
The sale of the Debtors’ assets related to the Debtors’ luxury motorhome resorts and the Debtors’ core recreational vehicle manufacturing assets occurred pursuant to separate agreements. Both of these agreements excluded from the assets being sold the Debtors’ causes of action under Chapter 5 of the Bankruptcy Code, which include claims for the recovery of bankruptcy preferences under Section 547. This reservation, along with other circumstances, make this bankruptcy highly likely to generate mass preference claims.
The Trustee, George L. Miller, still has a year to start the preference recovery actions. There does not appear to have been any substantial activity to date to get those claims ready. Due to the large number of potential preference defendants and the size of the potential recoveries it will take some effort to get all the claims underway.
The good news is that the case is in Delaware and in front of Judge Kevin J. Carey. Creditors hopefully will not be seeing the small preference claims, those below $11,725, due to the application of the venue threshold for Delaware Bankruptcy Court venue. For those larger claims, creditors will have the advantage of the subsequent advance approach to subsequent new value.
The Monaco Coach bankruptcy case clearly should be on the creditors’ bankruptcy preference watch list. Circumstances strongly suggest that it is just a matter of time.
[FN1]The Debtors in these cases are: Monaco Coach Corporation; Signature Motorcoach Resorts, Inc.; Naples Motorcoach Resort, Inc.; Port of the Isles Motorcoach Resort, Inc.; Outdoor Resorts of Las Vegas, Inc.; Outdoor Resorts Motorcoach Country Club, Inc.; Signature Resorts of Michigan, Inc.; La Quinta Motorcoach Resorts, Inc.; R-Vision Holdings L.L.C.; R-Vision, Inc.; R-Vision Motorized, LLC; Bison Manufacturing, LLC and Roadmaster LLC.