By Staff
Tractor dealership’sinventory, equipment to be auctioned
By TED STRONG
Staff Writer
Lee Tractor Co. Inc. was brought to its financial knees by a dispute with the maker of John Deere tractors, Lee’s bankruptcy attorneys claim in a proposed settlement plan for the company released Monday.
Now the company’s tractor dealerships will be liquidated at auction, though three merchandise stores in Tennessee and South Carolina will remain open, according to the proposal, prepared by Stubbs and Perdue, a law firm with offices in Raleigh and New Bern.
The plan calls for the company’s seven agricultural and construction equipment dealerships — including locations in Washington, Williamston and Rocky Mount — to remain closed, and for inventory and equipment from those stores to be auctioned off by Country Boys Auction &Real Estate Co. of Washington.
Lee Tractor Co. has filed for Chapter 11 bankruptcy, which protects a company from its creditors while it restructures. Phillip Lee, of Washington, intends to remain at the head of the company.
Attempts to reach Lee and other company officials Monday afternoon were unsuccessful.
When Lee Tractor Co. first filed for bankruptcy in October 2007, company officials told the Washington Daily News they planned to continue to operate all of its locations.
It became clear early that the company would have to close its dealerships in Virginia, though the company thought its other locations would be able to stay open, according to the bankruptcy documents obtained Monday.
As the company struggled to operate its dealerships on a smaller scale, it continued to fight with Deere, the plan claims. Issues at stake included the price at which Deere &Co. would buy back existing inventory, payments Lee claimed were owed it by Deere and the proper court jurisdiction for their disputes, according to the proposal.
Eventually company officials decided it was not feasible to keep any of the dealerships going, according to the document.
So a plan was put forward by the company’s attorneys that is intended to eventually settle all of its debts, which were listed along with company assets in the document.
Under the plan, which must be approved or rejected by the company’s creditors, then approved by a judge at the U.S. Bankruptcy Court for the Eastern District of North Carolina in Wilson, the three merchandise stores in other states will continue to sell clothing, toys and similar items.
Liquidated assets will be used to satisfy the company’s debts, which the plan lists.
First, the company is selling inventory back to manufacturers including Deere, JCB Inc. and AGCO Corp.
The company has already paid off one small loan from the Cogsdale Implement Co. Inc., of Wakefield, Va., and still has about $2 million in loans and lines of credit from a group of banks to settle, along with a $300,000 loan from company head Phillip Lee, according to the document.
Repayments from other loans that the company paid to its CEO were probably legal because the company was solvent when it petitioned for bankruptcy and Lee continued to lend his company money, according to the proposal.
Also still outstanding are payments on nine vehicles: a used 2004 Audi A8 sedan, seven pickup trucks made by Chevrolet, Ford and Toyota, and a Chevrolet van, according to the company’s proposed settlement.
The company owes more than $40,000 on the Audi and between $5,000 and $16,000 on each of the other vehicles, the plan states.
The company has proposed that it be given a choice between paying the debts through the liquidation sale and simply surrendering the vehicles, according to the proposal. It has also asked to be allowed the option of continuing to pay off one of the pickups, a 2005 Toyota Tundra, the documents state.
The final class of debts the company has are unsecured, the kind of debts businesses that served the company would have. These include phone bills, water and electricity bills, bills for advertising and debts to a number of hardware firms. Debts in this class total roughly $2.3 million, the plan states.
The company doesn’t expect the assets at the dealerships to cover all of debts to taxing agencies, suppliers, lenders, and companies and people the firm did business with, according to the plan, though repayment of the roughly $4,000 in down payments the company had received on farm machinery when it went filed bankruptcy are at the top of the list.
According to the plan, any debtors not repaid by the sale would start receiving quarterly payments from the company in January.