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Letter to the Editor

Fox Body Shop Chain Files for Bankruptcy

Fox Collision Center and Fox Real Estate, the two entities that operated a four-state chain of auto body shops, filed for Chapter 11 bankruptcy protection on January 23 in U.S. Bankruptcy Court in Wichita, Kansas.

Company president Todd Fox announced the filing in a statement issued through Wichita bankruptcy lawyer Ed Nazar.

In the statement, Fox blamed significant operating losses and the failure of a downsized company for the bankruptcy. Nazar said later that day that he would have no further comment.

Fox, who started the business in 1989, closed 18 collision repair shops in Kansas, Oklahoma, Missouri, and Arkansas on October 27, including four in Wichita. At that time, he claimed insurance company direct repair programs forced the company out of business.

Wichita locations, along with two Tulsa locations, immediately re-opened as Fox Body Shops but closed four days later.

The filing claims assets and liabilities between $1 million and $10 million, with the company bank, Marshall and Ilsley Bank of Milwaukee, the largest secured creditor at nearly $2 million.

Fox, who now lives in Aurora, Colorado, said in the statement that the bankruptcy filing is for liquidation. No reorganization is planned. He blamed M&I Bank for what employees say is at least two weeks of unpaid wages, saying the bank froze his payroll accounts when the companies ceased operations in October.

"At the time of suspending the day-to-day business, Fox Collision Center Inc. was current in its monthly loan payments to M&I Bank," Fox said in the statement. "Fox Collision Center Inc. did not anticipate the actions of M&I Bank in returning the payroll checks."

Fox said negotiations to release the money so he could meet his final payroll were unsuccessful, as were attempts to sell the company's real estate, equipment and location leases as a whole.

He urged former employees to file claims with the bankruptcy court for unpaid wages, despite the fact that such claims would be unsecured and thus unlikely to be covered by funds recovered by the bankruptcy estate.

Fox said former employees will receive W-2 statements from the company this month. The employee portions of the company's 401(k) plan are available for transfer.

Fox called plans to operate the four-location downsized company "ill-fated" and said the new company didn't carry on any business.

Fox has no current involvement in the auto repair business and is "looking for new business opportunities," he said in the statement.

Fox Collision Center - the operating company owning mostly vehicles, furniture, fixtures, and equipment - is the subject of most of the creditors and litigation. The company also faces wage claims with the U.S. and Oklahoma labor departments from former employees in Oklahoma.

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