Groff Tractor - Chapter 11 Case Summary

Business Description

Groff Tractor Mid Atlantic, LLC ("GTMA"), along with its Debtor affiliates (collectively, the "Debtors" or the "Company"), is a heavy construction equipment dealer managing and operating seven dealership locations across New Jersey, Delaware, and Maryland. As a nationally recognized CASE® "Diamond Dealer," the Company markets and sells CASE® brand construction equipment and parts, while also providing repair and maintenance services.

• As of November 2023, GTMA was ranked the number one dealer by CASE Market Share Growth.
• In addition to CASE®, GTMA represents other major equipment OEMs, including Atlas Copco, Takeuchi, Terex, Strickland, Terramac, Roadtec, Sakai, Etnyre, Kleeman, Liebherr, and Ecotec.

GTMA serves a broad array of construction-oriented end-markets, generating revenue through new and used equipment sales, equipment rentals, and high-margin product support such as parts and service. The Company is wholly owned by Groff Tractor Holdings, LLC ("Holdings").

• Dealer 2023, LLC ("Dealer"): An idle entity that previously held assets sold several years ago. While it currently has no operations, it remains a guarantor on a substantial amount of the Debtors' indebtedness.

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Corporate History

GTMA was originally organized as a Delaware limited liability company in 2017. In January 2023, GTMA, along with affiliates Dealer and Holdings, converted to Texas limited liability companies and currently operate as manager-managed LLCs under Texas law.

Acquisition and Growth Strategy

GTMA was established through a combination of highly accretive acquisitions, followed by organic growth driven by value creation opportunities executed by ownership and management. Key legacy acquisitions include:

• Trico Acquisition (2015): Acquired an underperforming dealer with a historical under-emphasis on parts, service, and rental, providing geographic expansion into the New Jersey market.
• Folcomer Acquisition (2017): Acquired an underperforming dealer to expand into the Maryland and Delaware markets.
• CC&T Acquisition (2018): Expanded the Company’s portfolio into the Roadtec paving product line, subsequently allowing GTMA to sell and service Roadtec products across all locations.

Historically, Dealer and GTMA operated alongside one another until the disposition of Dealer's assets in 2023.

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Operations Overview

The Debtors operate their dealerships pursuant to Case Construction Equipment Sales and Services Agreements (the "Dealer Agreements") with CNH Industrial America, LLC ("CASE"). These agreements license the Debtors to use the CASE® trademark and act as an authorized dealer for sales, repair, and maintenance of CASE® equipment within their geographic territories.

Management and Ownership

• Holdings: A manager-managed LLC with Ross Gatlin serving as the sole manager. Ownership is divided between Groff Resources Holdings LLC (87.1%) and LeTort Management and Trust Company (12.9%).
• GTMA and Dealer: Both are wholly owned subsidiaries of Holdings and are managed by David Rex, Charles Collie, and James Price.

Workforce and Cash Management

The Debtors employ 103 individuals, including 29 employees who are members of either the Local 452 or Local 825 Union. Consequently, the Debtors are signatories to two Union Contracts with outstanding unsecured claims as of the Petition Date.

• The Debtors maintain centralized cash management systems managed by financial personnel at GTMA headquarters, with dealership locations handling certain deposits as necessary.

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Prepetition Obligations

As of the Petition Date, the Debtors reported approximately $1.3 million in cash, $107.5 million in total funded secured debt, and approximately $8 million in unsecured debt. The Company’s capital structure includes:

Secured Debt Obligations

• M&T Revolver: The Debtors are party to a revolving credit facility with Manufacturers and Traders Trust Company ("M&T").
  • As of the Petition Date, the facility was fully drawn with a principal balance of approximately $74.5 million against a maximum commitment of $77 million.
  • M&T asserts a first-priority lien on substantially all assets, subject to certain equipment lenders' liens, and a first-priority interest in cash not encumbered by Floor Plan Lenders.
• Active Floor Plan Financing: The Debtors have approximately $28.6 million outstanding under financing agreements with three active lenders:
  • CNH Capital: Approximately $22 million outstanding under various agreements, including a Wholesale Financing and Security Agreement and a Retail Financing Agreement.
  • Volvo Financial Services: Approximately $6 million outstanding, secured by a first lien on certain equipment.
  • De Lage Landen (DLL): Approximately $0.6 million outstanding, secured by a first lien on certain equipment.
• Inactive Floor Plan Financing: The Debtors have outstanding balances with four legacy lenders who were not advancing new funds as of the Petition Date. These obligations total approximately $4.8 million:
  • Bank of Oklahoma: ~$3.1 million.
  • Deutsche Leasing: ~$1 million.
  • US Bank: ~$467,000.
  • Bank of the West: ~$219,000.

Unsecured Debt and Taxes

The Debtors estimate approximately $8 million in liquidated unsecured trade debt, which includes trade payables and other costs. Additionally, the Debtors have accrued various tax obligations, including:

• Sales and Use Taxes: $442,000 (for the period Sept. 1, 2025 through the Petition Date).
• Property Taxes: $57,500.
• Regulatory Assessments/Other: $3,000.
• Federal Excise Taxes: An undetermined amount for the first three quarters of 2025.

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Events Leading to Bankruptcy

Disputes with Key Stakeholders

The Company’s filing was precipitated by escalating disputes with key stakeholders, including CASE, CNH Capital, and M&T, which threatened the stability of the Debtors' financing and dealer relationships. In mid-2024, disputes arose regarding the Debtors' continued operations under their Dealer and Financing Agreements.

• While negotiations resulted in the "Eighth Extension Agreement" effective October 6, 2025, the parties were unable to consensually resolve all open issues.
• Concurrently, the Debtors fell behind on numerous unsecured payment obligations.

Marketing Process and Chapter 11 Filing

Prior to the Petition Date, the Debtors launched a comprehensive marketing process to identify a buyer for the business as a going concern. To support this effort, the Company engaged TM Capital as its investment banker.

• TM Capital has received approximately six informal expressions of interest from potential purchasers.
• Ultimately, the Debtors determined that commencing Chapter 11 cases was necessary to protect the business, preserve going-concern value, and pursue a sale transaction in the face of untenable operational conditions outside of court protection.