Dorsey Trailers Inc has reached an agreement with a limited-liability corporation to sell off assets.
The purchaser, Dorsey Acquisition Group LLC, is a Delaware limited-liability company that does not include any current or former officers, directors, or insiders of Dorsey Trailers, according to a statement by the trailer manufacturer.
This purchase agreement calls for the sale of real property at the Dorsey facility in Elba AL. Also to be sold are machinery and equipment, raw material, and work-in-process inventory at the company's plants in Elba and Cartersville GA. Intellectual property, including Dorsey's trade name, is included. The asset purchase agreement does not provide for the sale of Dorsey's real property in Cartersville, nor the company's assets at its Dillon SC location.
The sale will not be finalized until the bankruptcy court has approved the asset purchase agreement, bid procedures, and final sales order. Under the agreement, the limited-liability corporation is to purchase the assets, subject to certain adjustments at closing, for $4 million. Dorsey previously had filed a motion with the bankruptcy court for the sale of personal property and inventory at its Dillon location to private investors for about $250,000 subject to certain adjustments at closing and continuing royalty payments. The bankruptcy court has not yet approved that transaction.
Dorsey has been unsuccessful in developing a workable restructuring plan under Chapter 11. Management has determined that the best alternative for the company is to sell the assets of the company in order to maximize the benefit to creditors and for the possibility of manufacturing operations resuming.
Proceeds from the sale of the company's assets after payment of secured creditors and administrative claims will not be sufficient to satisfy claims of Dorsey's unsecured creditors fully, nor will there be anything to distribute to the company's shareholders, the company says.
Dorsey also announced March 28 that its chairman of the board, Marilyn Marks, has resigned effective March 18.