In documents filed late in the day prior to the three-day Fourth of July weekend, the trustee for the PaceMaster bankruptcy has asked the court to either dismiss the case or convert it to a Chapter 7 bankruptcy liquidation.
PaceMaster filed for Chapter 11 bankruptcy reorganization on May 13, with executives telling SNEWS® it was the road for a private investment group to buy back the company and restore family ownership of the 42-year-old manufacturer. (Click here to see a May 14, 2010, SNEWS story about the 11th-hour filing and plan.)
But the attempt to gather investors and final terms took longer than planned. With bank deadlines pending, trustee Roberta DeAngelis asked the U.S. Bankruptcy Court, District of New Jersey, in documents filed July 2 after 4 p.m., to dismiss the Chapter 11 filing or convert it to liquidation – “whichever is in the best interests of the creditors and the estate.” A memorandum filed by the court with the documents stated that information presented at meetings and hearings has implied PaceMaster (www.pacemaster.com) is attempting to sell the business as a going concern, although the document stated the company had not filed a motion to sell the business.
“The debtor has not been able to negotiate a sale that would provide a dividend to unsecured creditors and be acceptable to the committee,” the court document stated. “The debtor has limited ability to collect its accounts receivable and continue to sell equipment because customers are withholding funds or are not purchasing equipment due to the uncertainty as to the warranty claims of the equipment being sold.”
President Tom Staub was not available for comment on July 2. For the May 14 SNEWS story, Staub told SNEWS he and his brother Jerry Staub, now semi-retired, were going to head up an investment group to lead the company founded by his father William, now 94.
“In today’s economic climate, working with a bank is a challenging situation at best,” Staub said in May. “We decided it’s in the best interest of Aerobics to replace the bank credit facility with private equity funding.”
PaceMaster did not file its required financial schedules and statements with its case on May 13; they were due on May 27, but are still lacking.
A court hearing on the case and the new motions is set for July 16.