Bankruptcy petition moves forward

Silverado cites merger and soft market for secondary sales among reasons

Silverado Stages lists 129 schools, universities, churches, tour operators, Native American councils, wedding planners and business customers among the unsecured creditors in its bankruptcy petition at the U.S. Bankruptcy Court for Arizona.

Silverado’s statement of assets and liabilities lists 20 lenders with claims secured by property. The largest, Volvo Financial Services, is owed $13.7 million.

The prominent carrier, and active and award-winning member of the United Motorcoach Association, American Bus Association and California Bus Association. filed a Chapter 11 bankruptcy reorganization petition last Oct. 8 and then on Dec. 12 informed its 417 employees that the operation was closing. Silverado blamed its downfall on its unsuccessful 2016 merger with the carrier Michelangelo Leasing as well as “unsustainable, near predatory” competition and a soft secondary market for the sale of excess motorcoach assets.

Founded in 1987, Silverado was headquartered in Phoenix and operated more than 300 vehicles from 10 facilities in California, Nevada and Arizona. The company said it was one of the largest privately-owned bus operators in the western U.S. The next court hearing in the matter is scheduled for Feb. 27.

Silverado’s court filings list $64.8 million in assets and $60.7 million in liabilities. The current assets include $1.2 million in cash or “cash equivalents,” $4.5 million in accounts receivable and $2.5 million in “real property” in Sacramento. Also listed are 236 vehicles, mostly motorcoaches, along with a 1979 Beech King Air E-90 airplane. Values for the vehicles are listed as “unknown.” The document lists $56.5 million in assets attributed to diesel fuel tax credits and unused net operating losses tied to federal and state taxes.

The “creditors who have claims secured by property” include 20 banks and financing companies that are owed $53.8 million. The largest are 1st Source Bank of South Bend, Indiana, $11.3 million; Western Alliance Bank of Phoenix $5.5 million; and Volvo Financial Services of Greensboro, North Carolina, $13.7 million. Genuine Parts Co. (NAPA Auto Parts) is owed just more than $1 million.

Silverado’s original petition said it was forced to file for bankruptcy after VFS Leasing and Volvo Financial Services “asserted a $15.6 million claim against the Debtors related to alleged breaches of contract on account of vehicle loans and leases.”

The entry for the Volvo debts lists at least 20 Volvo motorcoaches. It appears the list may have been too long for the allotted box on the standard court form. The list of unsecured creditors include 164 vendors of goods and services such as fuel, parts and utilities.

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