By Peter Hull
The Post and Courier
SUMMERVILLE, S.C. — Emergency vehicle maker American LaFrance and some irate creditors have declared a truce, putting the company's bankruptcy plan back on track.
The Summerville-based manufacturer said Thursday it has reached an agreement with the businesses it owes money regarding how it plans to repay its debts.
William K. Snyder, American LaFrance's chief restructuring officer, said the deal puts the company back on course to exit bankruptcy and return to full production as quickly as possible.
"This development takes the focus off the bankruptcy for customers, suppliers and employees and allows the management team to manufacture and deliver trucks to its municipal constituents around this country," Snyder said in a statement.
Prior to Thursday's agreement, relations between American LaFrance's owner and a group representing its unsecured creditors were disintegrating. The creditors objected to the restructuring plan American LaFrance proposed earlier this year. They said the company's owner, Patriarch Partners LLC, was looking out for itself while they were being offered just pennies on the dollar.
Revised details of the financial reorganization were approved by U.S. Bankruptcy Court Judge Brendan Linehan Shannon. Creditors must vote on it by April 18. Approval is expected April 29.
Under the revised plan, unsecured claims will be paid out of a fund that will include $6.1 million in cash and proceeds from the sales of two buildings.
Unsecured creditors owed $2,500 or less, or those willing to reduce their claims to $2,500, will be paid in full but without interest. The reorganized American LaFrance will take responsibility for paying back another $28 million in debt. All told, the company owes its unsecured creditors $85 million, according to its January bankruptcy filing.
David Fournier, a Delaware-based attorney who represents the creditors committee, could not be reached for comment Thursday.
Meanwhile, American LaFrance earlier this week sought to remove Daimler Trucks North America, formerly Freightliner LLC, from the committee of unsecured creditors. Freightliner sold the emergency vehicle business to Patriarch in late 2005.
American LaFrance complained in court papers that Daimler Trucks had from the sales of two buildings.
Unsecured creditors owed $2,500 or less, or those willing to reduce their claims to $2,500, will be paid in full but without interest. The reorganized American LaFrance will take responsibility for paying back another $28 million in debt. All told, the company owes its unsecured creditors $85 million, according to its January bankruptcy filing.
David Fournier, a Delaware-based attorney who represents the creditors committee, could not be reached for comment Thursday.
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