CBJ Report: Creditors to become owners in J&P Cycles bankruptcy
NORTH LIBERTY, Iowa (CBJ) —
Creditors to become owners in J&P Cycles bankruptcy
J&P Cycles and its parent company have filed for bankruptcy reorganization in a move that is expected to make its largest creditors into owners.
The California-based parent company Motorsports Aftermarket Group (MAG) plans to eliminate about $300 million in debt through a debt-for-equity swap. Plans are outlined in a Chapter 11 bankruptcy filing in U.S. Bankruptcy Court for the District of Delaware this month. The new owners group will be led by Monomoy Capital Partners, BlueMountain Capital and Contrarian Partners.
Support for the plan has been indicated by more than 90 percent of the principal amount of MAG's first-lien secured lenders and asset-backed lenders, MAG said in a press release. Such bankruptcies, having advance support from the majority of secured creditors, are often referred to as prepackaged bankruptcies, and can usually receive court approval more quickly than contested bankruptcies. MAG said it expects to emerge from bankruptcy in the first quarter of 2018.
In a press release, MAG officials said the business will continue to operate unaffected and the company has sufficient liquidity to fund operations.
“Customer services and sales will continue, employees will receive wages and benefits as before and vendors and suppliers will be paid in the ordinary course of business going forward,” CEO Andrew Graves added.
MAG is a leading supplier of aftermarket parts and supplies to the powersports industry. The company said the United States powersports market has been in “persistent decline for the past few years. The company has been working to adjust to the changing landscape, but its persistent debt has been an impediment to success,” MAG stated.
J&P, which was founded in Anamosa, announced in 2015 that all of its local operations except a retail store would be relocated out-of-state as part of a restructuring to make the company more competitive.
Two multifamily projects target Rockwell Collins area
Two projects going up for zoning review this week in Cedar Rapids could bring a total of 183 apartments to the Rockwell Drive NE area, off Collins Road in Cedar Rapids.
Anthony Properties Realty Inc. is petitioning to rezone nine acres at 6420 Rockwell Drive NE from an O-S to a RMF-1 multifamily zone. The company wants to build three three-story buildings with a total of 99 one-, two- and three-bedroom apartments.
In a separate petition, Anthony Properties wants to rezone 4.4 acres at 6025 Ridgemont Drive NE from C-2 Community Commercial to RMF-1. It wants to build 84 units of multifamily housing on the site in three three-story buildings.
The two projects are proposing 173 and 155 parking spaces, respectively - so many that the city will require a traffic impact study. City planning staff is recommending approval of both petitions, which will go to the Cedar Rapids Planning Commission on Thursday.
Study ranks Iowa second-lowest on credit card debt ratio
A newly-released study from financial website CardRatings gives Iowa high marks for credit card debt.
Iowa had the second lowest ratio of credit card debt to cost-of-living of any state, according to the CardRatings study. The ratio for Iowans was 12.2 percent, lower than any state except North Dakota's 11.6 percent ratio.
The study generally found that the higher the state's cost of living, the higher the credit card debt of its residents. Borrowers in more expensive states generally have $594 more credit card debt than those in less expensive states. After adjusting median income for cost-of-living and taxes, this made for a debt burden that was 22 percent heavier in more expensive states.
States such as Hawaii, California and Alaska with especially high costs of living had ratios of debt-to-adjusted income of around 20 percent or more, compared to the overall average of 15.9 percent.
"It would seem that when the cost of living gets to be too much, people do make the mistake of turning to their credit cards to keep up their lifestyles or perhaps just to keep up with the Joneses," said Brooklyn Lowery, editor of CardRatings.com, in a press release. "This, of course, only makes the problem worse as interest on credit card debt only adds to your monthly expenses."
The average credit card balances of Iowa borrowers in 2016 was $4,410, while the state's median personal income adjusted for taxes was $36,210.