Riverside, California-based MVP RV had credited its revival to Chinese investor Winston Chung who pledged to give the company $310 million to build recreational vehicles for China.
After faltering in 2009, the company had been given a second chance and seemingly a financial windfall when Winston Chung, a Chinese businessman and inventor of a type of lithium batteries, came to its rescue, Press-Enterprise reports.
Chung was named chairman of the board and after making an initial investment, pledged another $310 million to MVP RV so it could export 30,000 recreational vehicles to China including all-electric models, a plan that earned the company a trip to Washington, D.C.
This wasn’t the first time MVP RV had been revived in its short life that’s included very public ups and downs.
Three former Thor California executives started the company in mid-2008 just as the recession was taking hold and by 2009 shut down the factory in search of an investor.
At first, the company made the auto show rounds lauding a partnership with a South Korean firm to build all-electric cars, but the deal never happened.
Less than 18 months ago, MVP held a job fair, looking for 80 people to work at Fleetwood Enterprise’s former factory in Riverside, with a promise to hire 150 more within two months. More than 2,000 people applied.
MVP had already used money from its new foreign investor to buy Fleetwood’s old plant for $18.6 million in a bankruptcy sale. Many of the people who wanted to work there were veterans of Fleetwood or companies such as National RV Holdings, Weekend Warrior, and Thor of California, all of which were victims of the recession and had closed.
But Chung had been one among a group of Chinese investors called Fadar International who now argue Chung shoved them out of the MVP investment, used the RV company as a method to gain international prominence, and crafted a fraudulent document to claim full ownership of their stake in MVP RV, according to a lawsuit filed last August in Riverside County Superior Court.
The litigation is pending, but in mid-December Fadar International called for the shutdown of MVP RV and signed over its assets to a firm that liquidates companies to pay off creditors versus forcing a company to file for bankruptcy, according to Press-Enterprise.
Shortly after, the company laid off its entire workforce of about 200 people.
MVP assigned all of its assets to a private, non-profit, liquidation firm on December 12, according to Michael L. Joncich, a manager in the adjustment bureau for the Credit Management Association (CMA), a nonprofit company that currently controls MVP RV’s assets.
MVP RV had sold off all its trailer and RV inventory to dealers and since December had not taken any new orders.
Joncich said the company owes creditors $37 million, confirming that Fadar International, Chung’s former business partners who have sued him in Riverside County Superior Court alleging fraud and breaching contracts, is owed a substantial amount of that sum.
Other creditors include vendors and dealers may have had claims on warranties.
CMA has received interest from potential buyers, Joncich said. Once an initial bid has been made, the firm would allow others to enter in higher bids.
Information about the sale of the company’s assets—including the real estate it owns in Riverside County, inventory, and parts as well as the brand name—would be available on CMAauctions.com, according to the Press-Enterprise.
Industry insiders report that Chung—despite his financial struggles and other recent failed business ventures in Southern California—is a leading candidate to repurchase the company’s assets.
“If we’re unable to get a reasonable offer, then we would hold a public auction of the manufacturing assets and list the real estate for sale, or put it into a real estate auction,” said Joncich.
You don’t pay the price for success. You pay the price for failure.