Morgan Group Inc., which recently filed for Chapter 11 bankruptcy, will “make every attempt to liquidate the company’s assets at maximum value to satisfy creditors,” according to Anthony Castor, CEO.
Morgan, parent of RV delivery firm Morgan Drive-Away, will ask the U.S. Bankruptcy Court in South Bend, Ind., on Thursday (Oct. 24) to allow it to obtain debtor-in-possession (DIP) financing so it can continue limited operations for a period of time to liquidate its assets.
The Elkhart (Ind.) Truth reported that Morgan will seek $200,000 in DIP financing but Castor, in an interview with RVBUSINESS.COM, said he did not know the amount.
It will take Morgan “several months” to sell its available assets for cash, Castor added.
Morgan should be able to raise enough cash to fully satisfy its secured creitors.
Concerning unsecured creditors, Castor said, “We’ll do our best.”
In its bankruptcy court filing, Morgan revealed that it owes $6.35 million to its largest secured creditor, GMAC Commercial Credit, and it owes a total of $4.43 million to its 20 largest unsecured creditors, according to The Truth.
Morgan’s largest unsecured creditor is Comdata, the Brentwood, Tenn. company that distributed, through ATM machines around the country, the wages earned by Morgan’s independent contractor drivers.
Morgan stated that it owes $2.91 million to Comdata, which blocked drivers’ access to their accounts when Morgan shutdown.
Morgan’s second largest unsecured creditor is Winnebago Industries Inc., which it owes $358,792, according to court documents. That amount is for rebates to Winnebago for units that were damaged in transport and will be reduced by the amount that Winnebago owes Morgan for the delivery services it provided, Castor said.
Morgan shut down on Oct. 3 because it could not afford to pay the higher premiums required to renew its liability insurance policy, Castor said.
Federal law prohiibits transportation companies from operating without liability insurance.
Morgan faced sharply higher liability insurance premiums “partly due to 9/11 and partly due to us being in transportation,” Castor said.*