GE Unit Seeks to Put GO Vacations in Bankruptcy : Finance: The RV rental firm is delinquent on $8.7 million in loans. Its troubles are blamed on effects of political upheaval on travel by Europeans.
Seeking to protect what it claims is an $8.7-million debt, General Electric Capital Corp. is petitioning to force a large Garden Grove-based recreational vehicle rental firm into bankruptcy, according to court documents.
GO Vacations of California is an 18-year-old firm whose green-striped campers, trailers and motor homes are familiar sights at vacation spots across the country and are popular among European travelers.
The business-financing arm of General Electric has also filed an involuntary bankruptcy petition in Delaware against GO Vacations of America, an affiliate of GO Vacations of California.
Both firms are owned by GO Vacations Inc. of Toronto, which filed for reorganization on Feb. 21 under the Canadian Companies Creditors Arrangement Act, which is similar to a Chapter 11 bankruptcy reorganization in the United States.
An attorney for GE Capital and a spokesman for GO in Canada both said Tuesday that the financial problems of GO’s U.S. subsidiaries stem mostly from the parent firm’s bankruptcy.
The Canadian insolvency proceeding has created “difficulties with the logistics of transferring cash from Canada to the U.S. operations,” the company spokesman said.
GO of California operates large RV rental facilities on Garden Grove Boulevard in Garden Grove and in the Northern California city of Hayward. Each has about 350 rental vehicles and employs as many as 60 people during peak vacation season, the GO spokesman in Toronto said.
GO of America has facilities in New Jersey, Florida and Denver.
In a petition filed in federal bankruptcy court Friday in Santa Ana, GE Capital said GO is delinquent on $4.6 million in loans and, as guarantor of a 1988 credit arrangement between GO of America and GE, has defaulted on an additional $4.1-million loan owned by the Delaware unit.
Brian L. Holman, a Los Angeles attorney representing GE Capital in the GO of California case, said the default involves loans for the purchase of vehicles.
The GO Vacations spokesman in Canada said the company also has subsidiaries that operate fleets of rental yachts in the British Virgin Islands and own a hotel in Barbados.
He said GO encountered problems toward the end of summer as the Canadian and U.S. economies worsened and the world political scene became unsettled.
Most GO customers are from Europe and rent the campers and motor homes as part of package vacations put together by tour brokers in their countries, the spokesman said. Travel all but stopped with the political turmoil in Eastern Europe this summer and the Iraqi invasion of Kuwait in August, he said.
“But it is now changing quite dramatically with the Gulf situation somewhat resolved,” the spokesman said.
“The European wholesalers who provide the majority of our business say they are quite anxious for us to get our feet back on the ground, and they are telling the court (in Toronto) that they have business for us,” he said.
