Genmar moves from reorganization to sale

Posted on 30 October 2009
Written by Beth Rosenberg

Genmar Holdings is now pursuing a sales process rather than a reorganization as a means to exit from Chapter 11 bankruptcy, according to court filings.

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While he couldn't discuss specifics, Genmar chairman Irwin Jacobs confirmed he is a bidder for the company.

"Unfortunately, I can't give you the information for that right now because it's not public, but I plan on being a bidder for the assets and continue the business as it is," he told Soundings Trade Only.

"I tried to do the reorganization and couldn't get the cooperation of everybody necessary with which to do it," Jacobs said. "I was going down that path and, frankly, had what I thought was, in place, a transaction to do it. But there were people who weren't cooperating with it, so I had to go in a different direction."

Jacobs said he plans to bid on "primarily the company" as a whole, though he's not sure what other potential bidders are planning.

"Only the court can be the decision maker, and that's based on who pays the most for what it is. And obviously that's what my intention is, but we'll just have to wait and see," he added.

Though he couldn't go into many specifics, Jacobs said he hopes to file papers with the court next week that will make clear his position.

In papers filed with the court, Genmar says it has identified a "potential stalking horse" - "the party that has submitted the best offer to date from the standpoint of cash consideration and probability of consummation." It does not, however, identify that party, in order to "preserve the integrity of the sale process."

Though Genmar had been looking at other options, court documents say, "the potential stalking horse believes that pursuit of both strategies will be dilutive of management's efforts. Therefore, it has demanded that debtors enter into the exclusivity and expense agreement."

Genmar filed for Chapter 11 June 1.

- Beth Rosenberg

Comments

I work in the auto industry, specifically in the area of advising lenders and entrepreneurs in negotiations regarding distressed dealerships. I love boats, and work in cars-everybody who I ever bought a boat from told me to stay out of the business or I wouldn't be able to love boats anymore. Reading all of the discussion here on this topic really makes that hit home. Everything that is wrong with the dealer/manufacturer relationship in the car business is just magnified here.

What kind of a trade association/advocacy group do you guys have available (or not)?

Gordon, you've hit the nail on the head, but kissing up won't help solve the problems.

Mr. Jacobs USED investors money, and suppliers extended credit lines to advance his interest. He did not negociate with anyone, he filed Chapter 11 to eliminate debt, and reduce his obligations. You are correct, it's the an action that's legal in business. However, for him to bid, or purchase his old company back seems unethical consisdering how he has cut the throat of his suppliers and investors. When you sell assets, your not looking out for people, only number one !

He is no different than most CEO's of corporations. They all have a vested interest in the company. These are business transactions either by stock, or direct payment by the company itself. After reading most of the comments, not everyone is wrong and he is the savior of poor managment decisions, and operations. He continues to manuver the system, and use people.

Mr. Jacobs is subject to the same laws as every other citizen/corporation of the U.S.A.. In investing more of his own money into the Genmar scenario it appears a wise defensive move. If he can double his ownership with a court approved purchase then it should be applauded as capitalism at its' best. The bidding is open to everyone, they only need to step up to the plate. There isn't a better economic model for people with brains and persistence to succeed no matter their social/economic status. As a Genmar dealer I intend to look to this (new) corporation for my product. Thank you Mr. Jacobs.

You know it was going to happen. Erwin, if given the chance, he will buy again. It's his nature. Look at his history. As far as running the bussiness to the ground, he didn't it was his management that kept the people that worked for the sake of working and laid off people that could have saved the company. I just don't think knew that till it was too late. Or, he just ingnored the facts. Gotta love upper & middle management and thier cronies. That was a time for quality and not to start up a new boat line. I don't think it's right that Erwin and associates could have the chance to buy again. Really? How does thall this affect "His" credit score? How much "hosing" can a guy take? He should still be liable for the debt no matter if he bought it again. I agree with T-mac.

Shut Genmar down

People can say what they want about Irwin Jacobs, but he was there when OMC gave me my pink slip several years ago on Christmas Eve. He may be ruthless in some ways but it was a relief when he bought out and re opened the Murfreesboro, TN plant back and called everyone that was out of work back. My pay wasn't bad and we had good health insurance at an affordable price.

From what I gather, GE Money got a chunck of bailout money and then wouldn't lend it to borrows. Banks play a big part in the current economic disaster we are in. It will take rich people like Jacobs to help get the poor people back to work because the banks want to hold onto the money the goverment gave them.

I'm ready to go back to work, regardless of whom or how Genmar gets reorganized or sold etc. as long as I can get health insurance for my children and money to pay bills.

I have little sympathy for the banks or the goverment. I have it for the working class Americans that need work. I would like to see stimulus money in the hand of the working class instead of bankers.

To the guy that suggested a MarineMax bid on Genmar. What's the punch line to your joke? GE exits the business leaving cash only flooring and retail......

If anyone buys the company/companies of Genmar where do you think the money will go???????? To the creditors/vendors and people who have filed a petition for money owed to them. The court is in charge of the money!

I love the marine industry. This is Classic Irwin....

OH you old sad dealers. Get it together. All you guy's can do is complain about the big guy's but look into the mirror and see how your company is doing. It is wrong thje Jacobs could buy Genmar back and leave all those creditors in the dust.

Why don't you dealers put the walkers down and petition the judge as a group to keep Jacobs away from buying his own company. For you guy's to come together to do any would be a miracle.

Here's another good idea. Why don't a group of dealers bid on GENMAR? That's never going to happen. You guy's can't even come together to sell off old inventory. MAYBE MARINEMAX WILL BID. Wow.. Think about it. A dealer owning the builder. What a turnaround.

Before complaining look in the mirror. Have you laid anyone off, not pay a bill or undercut your neighbor?

Maybe now the industry can start to move forward again. This distraction was not what the industry needed. Irwin should not be allowed to bid. He and others are the reason GE is making it so difficult for us to move forward and put this all behind us. We need all the Genmar folks gone and let this company be not sold without being broke up. If you are a manufacturer concentrate on what you do best. Market one boat brand and only one.

My bet....Irwin will try and keep Ranger....Volvo Penta is the "stalking horse"

There is something wrong with this picture.

There is also something wrong with the dealers that allowed Irwin and the other big-wigs (Brunswick) to shove product down their throats for so many years and flood the market. Why have these dealers continued to do business like this?

Ranger, Four Winds, Carver, etc................all great brands; someone will get a deal---------------could it be Jacobs, sure, that's the way the law reads---who and how would anyone do business with him again would be the question? He does seem to pull off the impossible. Do not rule him out, bad or good.

Has Irwin been getting advice from Reggie?

What a country! Someone can run a company into bankruptcy then file chapeter 11 and the same person can buy the company back without it debts and liabilities?

If someone made a movie out of this it would be a comedy.

This is a sad day for our industry , our economy and country. Screw those who are honest, work hard and pay bills, but lets reward those who are dishonest, don't honor their debts and use the system.

Keep it up and this downturn will seem like a booming economy very soon!

I have read on other sites that Yamaha may be in the running for some of Genmar's assets, notably Ranger.

It will be interesting to see who actually ends up with the best of the brands and how they will treat the current and former customers/dealers. To turn their back (whoever the new owner turns out to be) on this group of people will be brand suicide. Let's hope for the sake of them all that this winds up in the hands of person or group that will return some dignity, respect and profiability to the brands and dealer base.

So, now the great hostile takeover Guru is going to bid to buy his own company and lose all the liabilities. Classic Irwin! (Amazing)

Is there something wrong with this picture, or is it just me ?

(A former dealer)

The hidden agenda king strikes again! Very soon we'll all kiss his ring and accept $10 dollars per hour for warranty work.

The master is at work. He will own what he wants to own. He will be in business with the best brands. And the dealers will beg for a dealer contract and and make skinny margins and be greatful for the oppurtunity. The more things change the more they stay the same.

this board (link below) suggest rumor of Forrest Wood and Randy Hopper purchasing the company:

http://www.fishingminnesota.com/forum/ubbthreads.php/topics/2051142/Genmar_will_be_Sold

anyone hear of this?

I think the worst thing that could happen to Ranger Boats in this mess is to end up owned by a motor company. One of many beauties of buying a Ranger Boat is being able to get it with the motor you like to run. A one engine brand Ranger would be awful for all fishermen. Keep the fingers crossed.

It is my understanding that the court is hip to Irwin and is not in favor of him as a bidder.

Very good, Al. My thoughts exactly, about the liabilities and interest conflicts. Just how much confidence would YOU have in a companay who acts in this manor. Who has all/most of the major decision makers still on the same payroll that put the company into bankruptcy in the first place. I believe a good re-org and a darned good house cleaning may save it, and may save consumer confidence.

I am thinking Irwin's next press release will be; "looking for new business partners". OPM is needed! Ouch....

How is that different from what all of the financial institutions did to us. The only difference is that the federal government agreed to spend our tax dollars bailing them out before the courts had the opportunity to rule on it.

Some criticized me for my skepticism of how "well" Genmar was doing in its efforts to reorganize. Looks like the "rumors" I kept hearing were true. Although no one knows how this will all turn out (see Fountain), it seems very unlikely that Genmar will continue to exist in its current configuration. Brunswick just announced its third quarter results with a much improved cash position. Wonder if they are interested in Ranger to match up against Yamaha and its Skeeter brand? This could prove to be one very interesting auction . . .

Seems like a convenient way to walk away from the liabilities. It seems like a conflict of interest when the one that drove the company into bankruptcy can turn around and purchase the assets, while at the same time hosing all the creditors.

yvComment v.1.21.1

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Genmar moves from reorganization to sale

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