On January 3, 2012, Coach Am Group Holdings Corp., along with certain of its affiliates ("Coach" and/or "Debtors") filed petitions for bankruptcy in the United States Bankruptcy Court for the District of Delaware. Aside from Coach America, Coach also operates under the brand names CUSA, American Coach Lines and Gray Line. According to the Declaration of Coach's Chief Restructuring Officer (the "Declaration" or "Decl."), Coach enters bankruptcy with approximately 6,000 employees and a fleet of over 3,000 vehicles.
Events Leading to Bankruptcy
Like many chapter 11 debtors before it, Coach believes that its business is operationally sound, however, it needs to reorganize as a result of the recession that began in 2008. Specifically, the company contends that its debt requirements and increased insurance costs have negatively affected liquidity. Without sufficient cash, Coach is unable to implement much needed capital improvements. Decl. at *7.
Objectives in Bankruptcy
In the months prior to filing for bankruptcy, Coach attempted to restructure its first lien credit facility with its lenders. Once pre-bankruptcy negotiations proved unsuccessful, Coach filed chapter 11 petitions for bankruptcy hoping to restructure its debt through a plan of reorganization. Decl. at *7.
In 2010, Coach reported revenues of $433 million, with a net loss of $180 million. The company's revenue for January through November of 2011 reached $417 million, with a net loss of $27 million. Coach lists assets of $274 million against liabilities of $402 million. Decl. at *7.
This bankruptcy proceeding is before Judge Kevin Gross. Judge Gross is the Chief Judge of the Delaware Bankruptcy Court. The Debtors are represented by the law firm Polsinelli Shughart PC.
For those readers who are generally unfamiliar with the bankruptcy process, below are some of my prior posts that address common issues that arise in Delaware bankruptcy proceedings: