Premier Marine files for bankruptcy protection

Posted on Written by Reagan Haynes
Premier Marine sells its pontoons through a network of 197 dealers in the United States and Canada.

Premier Marine sells its pontoons through a network of 197 dealers in the United States and Canada.

Premier Marine, maker of Premier Pontoons, filed for Chapter 11 restructuring as a result of a “failed acquisition of another pontoon manufacturer in 2011,” said a motion filed Tuesday in U.S. Bankruptcy Court in Minnesota.

The company listed in a filing on Monday estimated liabilities between $10 million and $50 million owed to between 200 and 999 creditors, including more than $6.5 million owed to American Bank of the North.

“The debtor suffered substantial losses in 2014, 2015 and 2016 attributable to the purchase and manufacture of the Palm Beach and Weeres brands in New Ulm, Minn., termination of manufacturing in New Ulm and the transition to manufacturing of the brands at the debtor’s Wyoming [Minn.] facilities,” court documents obtained by Trade Only Today said.

“The Palm Beach and Weeres brands were discontinued in January 2017,” the documents said.

The acquisition losses left Premier with “inadequate cash to operate efficiently and profitably, as it had for more than 20 years,” the documents said.

Premier also filed a motion today asking that it be allowed to continue honoring warranty claims, as well as a motion requesting that it continue compensating employees.

“Preserving the ‘business as usual’ atmosphere and avoiding the unnecessary distractions that would inevitably be associated with any substantial disruption in the debtor’s dealer relationships will facilitate the debtor’s reorganization efforts,” the motion said. “Maintaining the debtor’s customers is both essential and in the best interests of the estate and creditors.”

Premier Marine, formed in 1992 by Robert Menne and Eugene Hallberg, sells its pontoons through a network of 197 dealers in the United States and Canada.

The Menne family controls 72.8 percent of the debtor equity; Hallberg controls the remaining 27.2 percent and is the company’s landlord.

In response to lender and vendor pressures and a growing backlog of dealer orders, the Menne family solicited prospective buyers, equity partners and subordinate debt lenders, court documents said.

The company secured a $2.5 million lending commitment necessary and sufficient to resume normal production, but filed for Chapter 11 restructuring after an eviction by Hallberg for nonpayment of rent, documents said.

“The Chapter 11 is necessary to attract a new equity partner, reject the Hallberg leases, consolidate manufacturing under a single roof and reorganize the business for the mutual benefit of the debtor creditors, employees and dealer network,” the documents said.

Wells Fargo Commercial Distribution Finance LLC terminated Premier’s dealer floorplan financing program, effective Jan. 31, the documents said. Premier and Northpoint Commercial Finance LLC have a repurchase agreement that is still intact.

“The debtor’s dealer network regularly uses the Northpoint floorplan program to finance the purchase of debtor pontoons, particularly new model year purchases which first become available for purchase in August of each year,” the court documents said.

“Without an ongoing floorplan program dealers would be forced to pay cash on delivery or find an independent financing source,” the court documents said. “Termination of the Northpoint floorplan would likely disrupt the purchase cycle and reduce the number of pontoons sold by the debtor.”

The company says it made that point so the court would approve certain conditions that might otherwise not have been allowed.

Premier manufactures and sells about 2,000 pontoons a year, having generated $58,405,559 and $59,584,693 in net sales for the years that ended on Dec. 31, 2016, and 2015. It has 150 full-time employees and regularly employs as many as 20 part-time and seasonal employees.

On Tuesday the company requested authority for the use of cash collateral through July 11 and to grant replacement liens to keep business operating as usual. The court will hear that motion on Thursday.

Comments

8 comments on “Premier Marine files for bankruptcy protection

  1. Curtis

    Well this is such a shame. Vendors and employees will get screwed.
    Obviously buying two companies was not the best decision.
    The rule of thumb is stay small and keep it all.
    They would still be in business.

  2. Mike Babiracki

    This is disheartening. Just took delivery on a premier yesterday. Lots of parts were missing or not properly hooked up, then I hear about the bankruptcy today. Dealer says they will fix but parts needed are hard to come by. Wrong top, fixed non adjustable helms chair, beacon 2?not working, stereo and amp not hooked up, no switch to shut off electronics, have to go and turn off battery switch. No map on GPS, nothing downloaded…..onand on. Feel like an idiot taking it

  3. Brian H Webb

    Premier has the best most innovative designers in the industry. They are light years ahead of the competition. Their products are 99% superb quality with warranty issues usually arising on new models with new equipment or materials. The same however cannot be said for the business acumen of their Sr Management Team. These acquisitions were ill advised and immediately reflected in the manner in which warranty claims were handled on the company flagship models. This filing should include the resignation of the CEO, CFO and Boatd of Directors. Premier has the product to survive but it needs savvy business people to steer it through these troubles.

  4. Carl Moore

    Right on Curtis, Once you start down this slippery slope it is hard to return to normalcy. There is a glut of toon builders all building similar looking product. If they find the investor (black knight) they will also kill all other liabilities including warranties.. The competition I’m sure is already going after the dealer base and the dealers will listen if they are good business people… It’s the nature of modern day business when you use OPM (other peoples money) to run your enterprise..
    Who forgot about 2008…

  5. Ed Schnider

    I work there and I am past due on pay, vendors not paid and the family is super arrogant. Stay clear, part time help is doing some final assembly and its all guess work.

    Also, the furniture is not what they say. Check the thickness and it will fade fast, trust me!

  6. Carl

    Post from Ed Schnider is not legit, he is not a Premier employee. As a current employee I can tell you we are building product every day and working to return to normal product levels. We are hiring every day. Reorganization can be just that and maybe the trash talk could be saved for politics and avoid commenting on something you have little to no information about. I have been paid on time and NEVER had issues with our management.

    Close to 200 employees depend on honest comments.

  7. Scott Wiliams

    QUOTE: Mike BabirackiJune 22, 2017 at 4:40 pm
    Just took delivery on a premier yesterday.
    Lots of parts were missing or not properly hooked up.
    Wrong top,
    fixed non adjustable helms chair,
    beacon 2?not working,
    stereo and amp not hooked up,
    no switch to shut off electronics,
    have to go and turn off battery switch.
    No map on GPS, nothing downloaded….

    AND THIS IS AN EXAMPLE OF WHAT IS WRONG WITH THE MARINE INDUSTRY AS THIS STUFF HAPPENS WITH “MANY” MANUFACTURERS, NOT JUST THOSE WITHOUT CASH.

  8. Terry

    I have been waiting 1.5 years for warranty work to be completed. President is now involved.

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