Toro SEC Form 8-K Excerpt - Sale of Receivables to Joint Venture

Item 2.01     Completion of Acquisition or Disposition of Assets

As previously disclosed in a Current Report on Form 8-K dated August 12, 2009, The Toro Company, a Delaware corporation, and TCF Inventory Finance, Inc., a Minnesota corporation and direct subsidiary of TCF National Bank (“TCFIF”), established a joint venture in the form of a Delaware limited liability company named Red Iron Acceptance, LLC (“Red Iron”) to provide inventory financing, including floor plan financing and open account financing, to distributors and dealers of products of Toro and certain of its affiliates (“Toro Products”) in the United States and to select distributors of Toro Products in Canada.

In connection with the joint venture, The Toro Company and certain of its wholly-owned subsidiaries (collectively, “Toro”) agreed to sell to Red Iron, in more than one transaction to occur during Toro’s fourth quarter of fiscal 2009 and first quarter of fiscal 2010, certain floor plan and open account receivables from distributors and dealers of Toro Products and certain related assets (“Receivables”).  

As previously disclosed in a Current Report on Form 8-K dated October 1, 2009, Red Iron and Toro entered into the first Receivables transaction on October 1, 2009, pursuant to which Red Iron purchased from Toro certain Receivables for an aggregate purchase price of approximately $69.9 million.  

On October 9, 2009, Toro and Red Iron entered into a second Receivables transaction having an aggregate purchase price of approximately $2.8 million and, on December 1, 2009, Toro and Red Iron entered into a third Receivables transaction having an aggregate purchase price of approximately $18.1 million.  In each transaction, the purchase price generally represented the face value of, or the purchase price paid for, the Receivables by Toro.