Regency RV’s parent company, Regency Conversions Inc., has filed for Chapter 11 bankruptcy protection.
The news first was reported by Law360. The case filed is In re: Regency Conversions Inc. The case was filed in the U.S. Bankruptcy Court for the Northern District of Texas.
In the court filing, Regency Conversions said the November 2022 Mercedes-Benz recall of its Sprinter vans left Regency unable to fill orders. The revenue loss severely strained Regency’s liquidity, the filing said.
Company founder G. Wayne Davis sold 86% of the company in 2020 to a group of shareholders in exchange for a $650,000 cash infusion and notes worth $1 million and $1.95 million, the filing said. When Mercedes issued its “stop-sale” recall order, the bankruptcy filing said the $1 million note was paid in full. Davis granted forbearance to the shareholders on the $1.95 million note but the filing said the new shareholders had not made payments on the note since November 2022.
Because of the shareholders’ non-payment, the filing said Davis declared a default and notified the shareholders they forfeited their voting rights. Davis claims he owns 22% of the company, the filing said, while another shareholder who fulfilled his obligations in August owns the remaining 78%.
Regency Conversions said ongoing Texas state court litigation prevents the company from completing the 16 chassis it possesses.
Regency RV President Don Emahiser, who is among the shareholders who bought the company in 2020, did not return a call for comment. Davis could not be reached for comment.
