So why are they not able to make the minimum interest payment to their bond holders? This past Monday Lazydays told their senior note holders they elected not to pay them on time (they technically have a 30 day grace period).
What would happen to you if you couldn’t pay the minimum interest rate on your house or RV loan? The lender would foreclose your house and repossess your RV. Lazydays finds itself in that position and is scrambling to find a solution. The problem is Lazydays, like all the RV industry, is running out of options.
Here is the official excuse for failure to pay, “We have the financial resources to run our operations as we normally would as we approach our selling season. Our primary concern is the outlook for the medium and long-term should RV sales remain depressed for a protracted period. Rather than wait for such a situation and have to respond in a reactionary way, we have elected to be pro-active and address these important issues with our bondholders at this time,” said Randy Lay, chief financial officer for Lazydays.
So if you “have the financial resources to run our operations as we normally would…” why don’t you just make your interest payment? It doesn’t take a genius to guess why.
If that isn’t an admission they’re on the edge of bankruptcy, I don’t know what is. Many dealers are in the same boat and can’t bail fast enough. Beaudry RV was forced to file Chapter 11 bankruptcy this week to keep bankers from shutting down their operations and don’t be surprised if Lazydays follows suit. In fact, don’t be surprised if you begin to see dealerships just disappear altogether. In this financial climate companies are finding it more difficult to reorganize under chapter 11 and simply elect to go out of business.
“Many companies in Chapter 11 are teetering between whether they are able to move forward with their reorganization or shut down because they can’t find additional funds,” said Mark D. Collins of Richards, Layton & Finger, which represents Linens ’n Things in its bankruptcy case.
“True reorganizations, in the spirit of the bankruptcy code, are becoming extremely rare, instead, many companies file for bankruptcy protection and proceed immediately to liquidation.” said Sandra E. Mayerson, a lawyer at Holland & Knight in New York.
Banks, hedge funds and bond managers need cash from the sale of whatever assets they can get their hands on in order to satisfy their nervous shareholders and bond holders who are cashing out. An example of this occurred today when Bigfoot RV, one of Canada’s largest RV manufacturers was shut down by the bank who controlled the company’s financing.
So how does this downturn in the RV industry affect you? I strongly recommend you have warranty work done as soon as possible before your dealer disappears. Second, if you think you’ll need any proprietary RV replacement parts I suggest you purchase them now. And finally if you are looking for a great deal on a used or new RV they will soon be available through bankruptcy liquidation auctions.Reporting RV news as it happens and frequently giving a "heads-up" before it happens - Jim Twamley, Professor of RVing
7 comments:
The title of this sad piece might be a little misleading to readers since they might think you are referring to the LazyDaze Class C MH manufacturer [since the first two names are indeed manufacturers]. You might want to edit to indicate the "LazyDays Dealership in Florida" I worry that this change might not be needed, the way the RV industry is collapsing. Perhaps LazyDaze will indeed be in the next fall of all the dominoes. A tragedy unfolding before our eyes. And it is not the bad manufacturers or dealers collapsing, but some of the best, most conscientious ones who insisted on high quality, small volume.
Correct my prior message. Beaudry is a dealer, LazyDays is a dealer, but BigFoot is an RV manufacturer. It was the reference to LazyDays and possible confusion with LazyDaze that might cause problems. It could scare people [unfamiliar with the similarities of the dealer name and the RV manufacturer name] to now cancel or not purchase from lazyDaze, thinking they are going into receivership. A shame to have a title of an article misinform and cause further damage to a struggling manufacturer.
Thanks for the update. While traveling last week from Dayton, OH. to Pittsburgh,PA. I noticed three large RV dealerships are gone. We lost another one outside Dayton last year. This is going to be painful for so many. I continue to enjoy your blog Jim.
Gene S.
This just in, Lazydays hires Macquarie Capital (USA) Inc. to represent them. This company offers restructuring advisory services to corporations and creditors operating in stress, distress or bankruptcy. I'll keep you posted. Jim Twamley, Professor of RVing
I think it would be great if Lazy Days went under. They rip off so many people. RV buyers go there and get so caught up in the carnaval atmosphere and the "free food" that they purchase without thinking. I've met people who bought from them that are thousands of dollars upside down. I feel sorry for any one who shops at Lazy Days without doing research first. Buyers Beware!!!
I have just purchased an rv from Lazy Days, and am very satisfied with the entire purchase process. When one is considering a large purchase that costs tens of thousands of dollars, it would be foolhardy and financially irresponsible of the purchaser to not research such a purchase. The internet in particular provides all the resources one needs to research such a purchase, including not only the rv, but also customer reviews of each dealership. I know at least 15 people who have purchased a rig from the salesperson, and not one has been unhappy with either the company or the rig. We also got a remarkably good deal on our new, previously owned, rig that no other dealer came close to offering.
I am not only upside down but I cannot even use the brand new Class A I bought at Lazy Days in Seffner, FL. It got mold on the property and they refused to work on it. Less than 2,000 miles, sick, dealer will not help and manufacturer bankrupt. Bank not into helping either. The banks and dealers all stick together and stick it to the consumer. Do not buy a new RV at Lazy Days. They SAY you will be happy, but you might be VERY UNHAPPY, like me.
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