EarthCruiser is closing!?!?!
- Thread starter ReluctantTraveler
- Start date
tkj23qe1387
Member
This post is general information not legal advice.
Generally, when a company still has “going concern” value, they may use the chapter 11 process to sell non-performing assets, terminate burdensome contracts (e.g., we work), and restructure its balance sheet (such as reducing debt with equity) so that the company may be more financially sustainable.
That’s why they call chapter 11 bankruptcy “restructuring.”
If the company is no longer a going concern, I.e., given time it would likely run to the ground, then the best outcome for creditors will be to liquidate all company assets (chapter 7) and orderly distribute the proceeds… secured debt first, priority unsecured, general unsecured…
IF EC EVENTUALLY FILES FOR CHAPTER 7 LIQUIDATION—
Deposits will be in a weird place unfortunately. Even though deposits were paid to commission the build of a specific vehicle, unless a security agreement was explicitly arranged, the buyer does not have “security” in that vehicle. What this means is that funds from the sale of those vehicles will be pooled with other funds to pay creditors in legal priorities. Only a small portion of a client’s deposits (a little over $3300 based on latest inflation adjustments) will be priority unsecured claims. The remaining portion will just be general unsecured claims.
Can’t really fathom what prompted EC’s decision as an outsider, but do know that debt can be very dangerous… especially variable rate debt.
Generally, when a company still has “going concern” value, they may use the chapter 11 process to sell non-performing assets, terminate burdensome contracts (e.g., we work), and restructure its balance sheet (such as reducing debt with equity) so that the company may be more financially sustainable.
That’s why they call chapter 11 bankruptcy “restructuring.”
If the company is no longer a going concern, I.e., given time it would likely run to the ground, then the best outcome for creditors will be to liquidate all company assets (chapter 7) and orderly distribute the proceeds… secured debt first, priority unsecured, general unsecured…
IF EC EVENTUALLY FILES FOR CHAPTER 7 LIQUIDATION—
Deposits will be in a weird place unfortunately. Even though deposits were paid to commission the build of a specific vehicle, unless a security agreement was explicitly arranged, the buyer does not have “security” in that vehicle. What this means is that funds from the sale of those vehicles will be pooled with other funds to pay creditors in legal priorities. Only a small portion of a client’s deposits (a little over $3300 based on latest inflation adjustments) will be priority unsecured claims. The remaining portion will just be general unsecured claims.
Can’t really fathom what prompted EC’s decision as an outsider, but do know that debt can be very dangerous… especially variable rate debt.
ReluctantTraveler
Well-known member
Fantastic post, thank you!
86scotty
Cynic
It's really hard to beat the 4 chapters comment but I think a tragic comedy beats regular comedy and this nugget of truth is absolutely a tragic comedy.
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ReluctantTraveler
Well-known member
Right? The math on these only makes sense if you have **** money. Costs as much as a house, has the same loan terms, and loses half its value before you're anywhere near paying it off.
tkj23qe1387
Member
Besides vintage cars, nobody would ever consider vehicles an investment. They are and always will be consumable products that people pay a premium for in exchange for convenience or enjoyment. Certain periods when supply and demand are out of whack may present transient opportunities to sell at a gain, but that is far from the norm.
plh
Explorer
a 20 year loan on a van! good lord. What banker would think that is a good idea.
waveslider
Outdoorsman
I've had clients with massive amounts of liquid capital and none of them would go near that deal ever. They would offer cash in lieu of a significant discount and most would have them owned by a trust or one of their companies so its a write off.
As for vintage car investing, that too is not without its peril. A good friend restores classic Mopar Iron and top prices for those have dropped significantly since the late 2000's.
As for vintage car investing, that too is not without its peril. A good friend restores classic Mopar Iron and top prices for those have dropped significantly since the late 2000's.
My bet its not a bank or credit union but an outfit like Trident Funding which is a big RV, boat and plane lender.
I see that EC has removed the for sale units from their website.
Not sure it's a sign of a weak market or just the fact that there have been so many Earth Roamers made and sold over the years, but there are 16 pre roamed on the ER website. I think that's the most I have seen.
Not sure it's a sign of a weak market or just the fact that there have been so many Earth Roamers made and sold over the years, but there are 16 pre roamed on the ER website. I think that's the most I have seen.
plh
Explorer
Back to the office mandates, already had my fun for a couple years, trying to get out before more depreciation hits, finding out that full time isn't as fun as Insta makes it look... Upgrading? so many reasons.
plh
Explorer
even with great credit, the bank is going to want its collateral worth something. A 15 year old RV on a 20 year note isn't worth much. At 8% on a $200K rig in 15 years you still owe $82K.