The Peak Group of Cos., a Canadian RV manufacturer with factories in Saskatchewan and Quebec, filed for protection from creditors last Thursday (Sept. 4) under the Companies’ Creditors Arrangement Act (CCAA).
The CCAA is the Canadian equivalent of Chapter 11 bankruptcy in the U.S., said Don Mockford, executive vice president of the Canadian Recreational Vehicle Association.
As a result of the CCAA filing in the Court of Queen’s Bench in Saskatoon, Saskatchewan, Peak must submit a reorganization plan that has to be approved by the company’s creditors, Mockford said.
As with Chapter 11 in the U.S., Peak will continue operating its factories in North Battleford, Saskatchewan, and Thetford Mines, Quebec, said Jim Baxter, Peak’s executive vice president.
The need for additional capital was known prior to the CCAA filing and Baxter noted that Peak’s plans to open a manufacturing plant in the U.S. will go forward.
“We will continue to do shows and we plan on going to Louisville (for the RV industry’s National Trade Show in December),” Baxter said.
The Peak Group owns Peak Manufacturing Inc. of North Battleford, which produces fifth-wheels and Class C motorhomes. Peak also owns Bonair Leisure Products Ltd. of Thetford Mines, which produces entry-level travel trailers and folding campers.
Peak, Canada’s second-largest RV-builder, acquired Bonair during 2001 and otherwise grew from $33 million (Canadian) is sales revenue in 2001 to $62 million (Canadian) during its fiscal 2003, according to the Saskatoon StarPhoenix.
One Canadian dollar is worth almost 73 cents in U.S. currency at current exchange rates.
“There are a number of reasons why profits have not followed the growth in sales, resulting in the capital shortfall which has required us to seek protection at this time,” according to a news release from Peak which was quoted by the StarPhoenix.
Peak “needs breathing room to restructure and reorganize a very successful company, which, for a number of reasons, including rapid growth, has become undercapitalized,” added George Wilson, Peak’s “chief restructuring officer,” who was quoted by the StarPhoenix.
Peak’s management believes its growth opportunities in the U.S. will come from the products built at the company’s Saskatchewan plant, Baxter said.
A location for Peak’s assembly plant in the U.S. has not been selected yet, Baxter added.