Posted by Hay DR on February 28, 2008 at 15:41:06 from (76.5.153.140):
Farmtrac goes into receivership
BOB BENEDETTI Associated Press
Since Farmtrac North America closed its doors on Jan. 18, workers of the Tarboro-based firm and dealers across the nation who sell its products have hoped to learn more about the company's status.
The farming implement manufacturer at 111 Fairview St., as recent as Feb. 5 had continued to keep approximately 180 Farmtrac workers under temporary layoff and still in limbo.
Farmtrac Chief Financial Officer Alton Cobb and Marketing Director Shenu Agarwal have failed to respond to calls and e-mail within a three-week period inquiring on the company's status. Farmtrac dealerships across also have reported the company's failure to respond.
According to a complaint filed Feb. 12 in Edgecombe County Superior Court, Textron Financial Corp. is seeking "not less than $13,309,056 plus interest plus attorney's fees of $1,996,358 and "additional contingent obligations"
According to a Claim and Deliver affidavit dated Feb. 12, the actual value of Farmtrac property is "approximately $12 million."
The complaint form also states that N. Hunter Wyche of Raleigh, a legal representative for Farmtrac, agreed to a request for Claim and Delivery hearing by Textron Financial. A claim and delivery is a legal action to recover personal property which is in the possession of another party.
Textron Financial Corp. local counsel David M. Warren said Wednesday that a Claim and Delivery hearing has not yet taken place. It is one of many options available to Textron and Farmtrac.
Edgecombe County Superior Court Trial Coordinator Bill Nichols said Wednesday that during a hearing Tuesday, attorney Jim Morrow of Tarboro was appointed as receiver for Textron Financial.
A receiver is appointed by a bankruptcy court or creditor to run a company. The responsibility of the receiver is to recoup as much of the unpaid loans as possible. Being in receivership is not an enviable situation for a company. Forbes Media explains that "Often receivers find that the best way to pay back loans is to liquidate the company's assets, which would effectively put it out of business."
Farmtrac originally signed into the repurchase agreement with Textron Financial on Oct. 6, 2006.
When asked about severance packages or buyout plans on February 5, Sales Manager Sushil Kaul conceded that "the company does not have enough funds" to consider those options.
So what are workers to do?
They can choose between riding it out or pursuing other employment.
The workers, presently on temporary layoff, are allowed to collect unemployment without being required to seek out new work. Once displaced workers take on a permanent layoff status, they become eligible for federal re-training and back-to-school programs. It is a wait that, depending upon Farmtrac, could last for up to 24 weeks.
Farmtrac sales and service franchises across the nation state they have not been contacted by phone or fax after multiple attempts to reach Headquarters. They have a costly stock of tractors that customers are unwilling to purchase new tractors without manufacturer warrantees and support. Others dealers report being unable to locate parts to keep their customers' tractors operational.
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