MRAA to form dealer committee in Genmar bankruptcyPosted on
In an unprecedented move, the Marine Retailers Association of America is working to form a committee of Genmar dealers who want their interests represented in court, as Genmar moves through the reorganization process following its June 1 Chapter 11 bankruptcy filing.
“We’ve had an inordinate amount of calls from Genmar dealers in almost a panic mode, not knowing what to do,” MRAA president Phil Keeter told Soundings Trade Only today. “Most dealers don’t have the wherewithal to hire an attorney to represent them in that at all, and being unsecured creditors they’re going to be way down on the list.”
“We’ve never done anything like this before because we’ve never had this big of a plea from dealers,” he added.
This committee of Genmar dealers would be represented by New York-based law firm Bellavia Gentile & Associates. On its Web site, the firm says it is “recognized as one of the foremost in the nation for advocating the rights of franchised or licensed dealers … one of the pre-eminent dealer rights law firms in the country.”
MRAA has a longstanding relationship with the firm, and its managing partner, Leonard Bellavia, played a leading role in the General Motors and Chrysler bankruptcies on behalf of those auto dealers, Keeter said.
MRAA has negotiated a flat-fee arrangement of $1,000 per dealer in order to become a part of this committee. If enough dealers join, Keeter said, that’s all they will have to pay. He’s hoping a “couple of hundred” dealers will join the committee.
Genmar says it has about 1,100 dealers worldwide for its 15 boat brands.
“Simply stated, this arrangement will only work if there is substantial participation by Genmar dealers,” Keeter said in his letter to dealers. “The failure to achieve an acceptable level of Genmar dealers’ participation would compel the association to abandon this effort, a result that, in our opinion, would be detrimental to Genmar dealers.”
Keeter said many Genmar dealers are owed money in the form of warranty payments, boat show assistance, or assistance with promotional programs.
“Instead of getting pennies on the dollar, maybe they’ll get a little bit more,” he said, explaining why dealers should join the committee.
Many dealers also are questioning if Genmar boats will have warranties after the company emerges from Chapter 11.
For example, Keeter said, if a dealer sold a Genmar-brand boat two years ago, and there are three years left on the warranty, but a new company emerges from the reorganization who is responsible for the warranty?