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By Dan McCue
Staff Writer
SUMMERVILLE -- American LaFrance, the Summerville-based emergency vehicle manufacturer, filed for Chapter 11 bankruptcy protection Monday and will appear before a federal bankruptcy judge Tuesday afternoon to reveal its future plans.
Attorney Christopher A Ward, who will be representing American LaFrance LLC at a 1:30 p.m. hearing before Judge Brendan Shannon in Delaware on Tuesday, said he plans to seek emergency relief for the company that will allow it to stay in business while reorganization occurs.
Ward, who is with the Delaware law firm of Klehr, Harrison, Harvey, Branzburg & Ellers, said the emergency relief will allow “the company to keep the lights on and its workers employed” while it works out difficulties related to its transition from being part of the Freightliner family of companies to an independent entity.
According to documents filed with the bankruptcy court, American LaFrance owes more than $100 million to more than 1,000 creditors.
Among the 20 largest unsecured claims against the company:
• $18.2 million: ACE-USA Bond Services, which holds an unsecured letter of credit associated with performance bonds and another $26.3 million in secured bonds.
• $10.5 million: Freightliner, which has a trade payable claim against the company.
• $2.8 million: Travelers Casualty & Surety, which holds an unsecured letter of credit associated with performance bonds and another $4.9 million in secured bonds.
• $7.3 million: Patriarch Partners, the private equity firm that purchased American LaFrance in December 2005, has two claims, one for $3.4 million, which it says is owed to Patriarch Partners Asset Services, and one for $3.9 million, which is listed as owed to Patriarch Partners Agency Services.
• $3.9 million: PNEU-MECH Systems Manufacturing of Statesville, N.C.
• $2.2 million: Allison Transmission of Indianapolis.
• $2.2 million: Cananwill Inc. of Glenview, Ill.
• $1.5 million: IBM Corp., which claims it is owed under two separate contracts.
• $1.1 million: Class 1 Inc. of Clay, N.Y.
Among the unsecured claims that don’t top $1 million are:
• $725,131: AME Inc. of Fort Mill.
• $571,518: Jedburg Industrial Property of Spartanburg.
• $598,378: Enap Grupo De Empresas, of Concon, Chile.
Other unsecured claims listed in American LaFrance’s bankruptcy filing include more than $1.4 million in accrued employee vacation time and a $7.1 million warranty reserve for vehicles delivered within the last year.
Patriarch Partners first became interested in American LaFrance when it was contacted in May 2005 by Donnelly, Penman & Partners, a Michigan-based investment banking firm that frequently works with DaimlerChrysler’s mergers and acquisitions division.
Freightliner was then part of the DaimlerChrysler family of companies.
Patriarch Partners’ owner Lynn Tilton told American LaFrance’s workers in December 2005 that Patriarch Partners would play an active role in the future management of the company.
“Patriarch Partners plays a dual role in the companies it acquires,” she said. “Financially, that means the provision of capital. But we also have a strong management group whose goal is to expand the company’s horizons through greater efficiencies and innovation.”
Michael Gordon, American LaFrance’s spokesman, could not be reached for comment Monday afternoon.
It was only last week that the company announced that an unspecified number of the nearly 100 workers put on a 30-day furlough shortly before Christmas will not be hired back and that those who do still have jobs won’t return until March.
Officials with the emergency vehicle manufacturer said the furloughs were done in order to give the company time to adjust its supply chain after moving from Ladson to Summerville last year.
As a result of supply chain problems, a number of workers found they didn’t have the parts or components necessary to complete their assigned tasks in the assembly process.
While he wouldn’t comment on personnel matters at the time, Gordon did reveal that the company was looking for additional financing.
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