Lender Fifth Third Bank said the company has defaulted on some of its financial obligations and parties agree that it is unable to manage its affairs because of lack of cash
MEMPHIS, Tenn. — A judge for the U.S. District Court for the Western District of Tennessee has approved the appointment of a receiver for accent, occasional and dining furniture specialist Coast to Coast Imports following its default of certain financial obligations to its lender.
Lender Fifth Third Bank asked the court on Aug. 20 to appoint a receiver to take over the business operations of the company in response to a default on its credit agreement with the bank.
On July 3, the bank informed the company that it had defaulted on various financial obligations, which include failure to pay certain property taxes, failure to file timely annual financial statements for the year ended Dec. 31. and failure to make a July 1 loan payment, to name a few. In court documents, the bank said that as of July 17, the company had an outstanding principal amount due on a real estate term loan of $878,954.79 and a principal amount of $3,22,325.29 due on its revolving loan.
According to an Aug. 22 filing approving the appointment of a receiver, the bank and the company have agreed that the company’s defaults “are material and continuing” and that the company is unable to effectively manage and operate its business affairs because of a lack of cash and a lack of access to additional debt or equity financing. It names the defendants as Coast to Coast Imports LLC, Stein Investments LLC, AW Stein Inc. — named for company CEO Andy Stein — and Coast to Coast Global.
The document further states that the business operations of the defendants have collectively suffered and continue to suffer. The defendants also predict that without additional capital infusion, they will imminently run out of cash.
“As a result of the foregoing, the preservation and value of the entity defendants’ assets are at risk of decline, deterioration and dissolution,” the Aug. 22 filing stated, adding, “The appointment of a receiver for the entity defendants is necessary to preserve and maintain the value of the entity defendants’ assets and business and to market the entity defendants’ business, personal property and real property for sale as the receiver deems appropriate.”
Chief U.S. Justice Sheryl H. Lipman approved the appointment of a receiver effective just after midnight Aug. 23. The court said the move is necessary for “the purpose of managing, protecting, preserving and operating and, if necessary, liquidating the entity defendants’ business or assets for the benefit and protection of Fifth Third Bank, National Association and its collateral, and for the benefits of all creditors of the entity defendants, but without any duty to create equity or otherwise represent the interests of any equity holders.”
The court document goes on to spell out the duties, rights and powers of the receiver and also notes that the court share retain jurisdiction and supervision of all matters concerning the receiver/receivership. The court also said that the authorized receivership can be terminated at any time with court approval.
Coast to Coast is a well-known and respected resource for accent, dining and occasional furniture that affords dealers and designers a mix of fashion-forward products made with a variety of exotic wood species such as solid sheesham, mango and acacia as well as various mixed media elements. It has long been known for offering these looks at affordable price points aimed at creating value for consumers as well as high margin opportunities for its customers. The company also has a Designer Trade Program it created specifically for designers.
“Our priority is to make the purchasing process easier by providing trade pricing on great products your clients will love,” the company says on its website.”
Home News Now has reached out to Andy Stein for comment.