The Daily Southerner, Tarboro, NC

Local News

November 14, 2008

Farmtrac auction Monday (?)

Deadline for bids today

W. TERRY SMITH

Farmtrac North America may be sold Monday, possibly following an auction on the steps of the Edgecombe County Courthouse.

That is the ruling of Superior Court Judge Frank Brown earlier this month after an objection to a $10 million offer from LS Mtron of South Korea to buy the beleaguered Tarboro firm.

After Textron Financial Corp., the major lien holder to which Farmtrac owes undetermined millions of dollars, objected to the offer, Brown established a new schedule for bids that has a deadline at 5 p.m. today. If an additional bid is received, the auction is scheduled to begin at 9:30 a.m.

The successful bidder will immediately go to a confirmation hearing. If no additional bid is received, the LS Mtron bid will be presented to the court for confirmation.

Farmtrac has been in receivership since January when it laid off its 180 employees. Tarboro attorney Jim Marrow is the court-appointed receiver, authorized to sell Farmtrac’s real and personal property. Marrow presented LS Mtron offer to the court on Oct. 20 and had to wait 10 days for any other offers.

During that period, Montana Tractors of Arkansas made a bid for some of the company's assets, and Textron raised its objections.

The LS Mtron bid was for all tractors, parts and the purchase at the assembly plant at 111 Fairview St. off Main Street and the company store on West Northern Boulevard. That lead some observers to speculate the plant on Main Street would resume operations and put the 180 employees laid off Jan. 18 back to work.

LS Mtron Ltd. is formerly LS Cable, which reorganized earlier this year. LS Cable was one of the two suppliers of basic units for Farmtrac and is owed $11.6 million. Earlier this year, LS Cable purchased Superior Essex, which has a facility in Tarboro.

At the time of the appointment of the receiver, Farmtrac was insolvent and its property was encumbered with mortgage and other liens securing Textron Financial Corp.

According to court documents, the six-decade old tractor manufacturer has more than $55 million in total liabilities.

Since Farmtrac closed its doors and Marrow was appointed receiver, the tobacco barn division was sold to Richard C. Anderson of Leggett and Robert H. Pope of Rocky Mount for $650,000 and a salvage auction in April raised $340,000.

Marrow said most of the money from the barn sale went to Textron.

Jae-Yong Sim, a senior manager with LS Mtron, has been in town but unavailable for comment.

Farmtrac sold more than 3,300 tractors in 2005, 2006 and 2007.

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