The abrupt closure and eventual bankruptcy filing by the Destinations RV dealership is having an unpleasant ripple effect through the Eugene, Ore., metro area business community, according to the Register-Guard newspaper.
Destinations RV was founded in 1997 by brothers Jim and John Howard who used $10,000 in cash and millions of dollars in borrowings to build a four-location dealership company extending from California to Washington and having $69 million in sales in 1998, according to the newspaper, which cited Bankruptcy Court documents.
However, the slowdown in motorhome sales last year led to the closure of the company in December and a bankruptcy filing in February. Destinations RV had $14.7 million in debt and less than $500,000 in assets at the time of the bankruptcy filing.
The bankruptcy filing means several small businesses, such as muffler and battery shops that sold products or provided services to the dealership shortly before the closure, most likely will not be paid. The Register-Guard is among the unsecured creditors owed money by Destinations RV.
The Howard brothers issued a written statement to the newspaper apologizing for the misfortune they caused.
Jim, John and Jay Howard, who left RV manufacturer SMC Corp. in 1999 to join his brothers at the dealership, might face personal bankruptcy as a result of the business failure, according to the newspaper.
The brothers borrowed money personally to loan to the dealership along with selling homes and liquidating individual retirement accounts in an effort to keep the business afloat, the Register-Guard reported.
At least one customer, who had Destinations RV sell his motorhome on consignment, has not been paid by the dealership even though the customer still has to make payments on a coach that now is parked in someone else’s driveway, the newspaper added.