American LaFrance creditors approve reorganization plan

Emergency vehicle maker American LaFrance said Wednesday that its creditors voted overwhelmingly in favor of its bankruptcy reorganization plan.

A judge is scheduled to decide whether to approve the Summerville-based company's financial restructuring May 22 in Wilmington, Del.

"Based on broad and deep creditor support, we are optimistic that the court will approve the plan," said William Snyder, American LaFrance's chief restructuring officer.

Exiting bankruptcy will allow the company to refocus efforts on its business. As of March 31, American LaFrance said it had recalled employees it furloughed in December and that the majority had returned. The Summerville plant has resumed full production.

Creditors voted on the proposed financial re-engineering earlier this month. Under the plan, creditors with unsecured claims will be paid out of a fund that will include $6.1 million in cash and proceeds from the sales of two buildings. Unsecured creditors owed $2,500 or less, or those willing to reduce their claims to $2,500, will be paid in full but without interest.

The reorganized American LaFrance will take responsibility for paying back another $28 million in debt. All told, the company owes its unsecured creditors $85 million, according to its January bankruptcy filing.

Controlled by New York-based Patriarch Partners, American LaFrance is one of the oldest fire, rescue and emergency vehicle manufacturers in the United States, dating back to its founding in 1832.

The company blamed its Jan. 28 bankruptcy filing on, among other factors, a depressed fire-truck market and a problem-riddled move from North Charleston to a new plant and headquarters off Jedburg Road.

For more details, see Thursday's Post and Courier.