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Beaudry RV Co., the last major operation of one of the oldest auto and recreational vehicle dealerships in Tucson, Ariz., has filed for Chapter 11 bankruptcy protection in a bid to restructure its debt.
The Arizona Daily Star reported that Thomas Sylvester, Beaudry’s CEO, said daily operations at the company’s two RV centers — in Tucson and in Chandler — and at Beaudry RV Resort will continue. The company has sold most of its local auto dealerships in recent years.
“It really shouldn’t change anything,” Sylvester said. “It should be business as usual. We’re going into bankruptcy to stay in business. We expect to come out even stronger than we go in.”
Under Chapter 11 bankruptcy, a debtor is protected from lawsuits while it comes up with a plan to repay creditors.
Sylvester said figures for the company’s total assets and liabilities weren’t immediately available. In its bankruptcy petition, the company indicated that both its assets and liabilities were in the range of $50 million to $100 million.
Founded in 1940, Beaudry was once among the leading new-car dealerships in Tucson, as well as a major RV dealer. Beaudry sold most of the new-car operations to the Chapman Automotive Group in 2005.
Sylvester said Tuesday that the company will continue to operate a Tucson used-car and Benson new-car operations, but it has intended to eventually “phase out” of the auto business since selling the other dealerships to Chapman.
Beaudry RV stopped selling the Fleetwood line of recreational vehicles last month, but it continued as an authorized service center for Fleetwood. Neither Sylvester nor Fleetwood officials would comment on the nature of the split.
The RV dealership continues to sell several other recreational vehicle lines.
Related businesses included in the filing are Beaudry RV Resort and real estate holding companies Palo Verde Ventures, Gila River Ventures, Witt Ventures and Smart Ventures, all limited-liability corporations.
Beaudry has dramatically reduced its work force in recent years, in part due to the sale of its Tucson new-car dealerships to the Chapman group.
Although the current downturn in the recreational vehicle industry is a factor, the filing for reorganization “was undertaken primarily to restructure financing for real-estate-related debt,” Sylvester said.
The filing was necessary, Sylvester said, to protect operations from the demands of lenders holding the secured debt on real estate and buildings that house Beaudry’s operations. Sylvester said the banking crisis resulted in an impasse with these lenders. He said the terms of payment will be worked out in the bankruptcy.
In an initial court motion, Beaudry has asked the court to authorize the company to seek interim and long-term financing.
The Daily Star reported that Sylvester said the company has never missed a payment to the lenders and reduced its debt to them “from more than $42 million in 2006 to $13.3 million today.” And he said independent appraisals put the value of collateral property held by the banks at more than $70 million.
“In the long term, our ownership and management feel very optimistic about the recovery of the industry,” Sylvester said.
The largest proportion of RV buyers are over age 55, and the aging of the Baby Boomers points to ever greater potential growth over the next decade, he noted.