Final paycheck likely for displaced PVI workers

A final paycheck appears likely for several hundred displaced employees of Protected Vehicles Inc., who have been waiting for their wages since the company shut down and filed for bankruptcy earlier this year.

As for PVI's other unsecured creditors, they'll be lucky to see a few cents on the dollar returned to them, depending on how the chips fall and the so-called professional fees stack up.

Then again, nothing is guaranteed — quite literally — in the bankruptcy process.

PVI, a onetime upstart rival to the established armored-vehicle maker Force Protection Inc., was seeking approval of its creditor-backed plan to repay a slice of its debt and to start closing out its nearly year-long case. U.S. Bankruptcy Court Judge David Duncan's blessing would allow roughly 340 workers who lost their jobs to collect their $364,000 in wage claims in full.

If it were only that simple.

Like nearly every corporate bankruptcy, the short version of PVI's demise is that it went belly up after running out of cash. The business itself was sold at a court auction a few months back for $6 million to the Wall Street investment firm Patriarch Partners LLC, which also owns Summerville-based emergency-vehicle maker American LaFrance and plans to resurrect PVI in some form or fashion.

The proceeds from the September sale, combined with another $547,000 that's been scraped together, will at some point go to pay off creditors such as taxing authorities and employees, as well as the lawyers and the accountants.

When all is said and done, a shade less than $1 million is expected be left in the till to defray the estimated $30 million to $35 million in unsecured trade debt, according to PVI bankruptcy attorney Bill McCarthy.

"It's not going to be as much as you want it to be," McCarthy told Duncan on Wednesday.

McCarthy's remarks to the court came after he and several other lawyers jawboned privately for an hour over two key objections to the repayment proposal.

After they broke, the PVI attorney made the surprising revelation that his client and Ladson-based Force Protection had agreed that very day to settle a nasty legal spat "and go their own way" without any money changing hands.

The two companies had been slugging it out over the alleged theft of trade secrets by PVI executives who formerly worked for Force Protection, including a co-founder. For PVI, the settlement eliminated the possibility of a costly legal fight and an unfavorable ruling — either of which could have sucked its bankruptcy coffers dry.

The next fly to be plucked from the ointment was a dispute with an entity formed by the Israeli Defense Ministry that asserted joint ownership of some intellectual property with PVI. At the 11th hour, the company, known as Rafael Armament Development Authority, agreed to relinquish its rights to its $16 million unsecured claim — again, with no money changing hands.

So far, so good. But the checks aren't in the mail yet.

The final payday hurdles include litigation involving a company that provided financing to PVI. Should GC Financial Services get its way in court, it would be first in line for the cash that's been cobbled together.

The other caveat is a lawsuit brought by about 150 former PVI workers who allege the company violated federal labor law by shutting down without notice. They are seeking damages in excess of $1 million. With those complaints in mind, Duncan "conditionally approved" the repayment plan last week.

As quickly as the PVI bankruptcy has moved along, the wheels of monetary distribution grind slowly, so former workers of the defunct manufacturer shouldn't expect a Christmas-week check from their ex-employer. Duncan isn't scheduled to consider final approval of the repayment again until Jan. 28.

As for the two open lawsuits, they could tie up the money well into the spring.

Contact John P. McDermott at 937-5572 or jmcdermott@postandcourier.com