Committee supports sale of Genmar assets

Posted on November 03, 2009

The Unsecured Creditors Committee in the Genmar bankruptcy case today said it will "support a process that will result in the sale of the Genmar assets, to either one or multiple buyers."

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In a court filing last week, Genmar said it was pursuing a sales process rather than a reorganization as a means to exit Chapter 11. Genmar chairman Irwin Jacobs confirmed he is a bidder for the company.

"The committee's investigation and evaluation have led it to conclude that supporting various reorganization proposals that were discussed with the committee would not be in the best interests of the unsecured creditors as a whole," the committee said in a statement.

"The committee believes that bringing this sale process to a speedy conclusion in order to meet the requirements of the early 2010 boat shows will be an important element of that effort," it added.

There are about 4,000 unsecured creditors represented by the committee, according to committee chairman Gary Potter, president of EZ Loader Boat Trailers.

Potter said it was unknown at this time how much money the unsecured creditors could expect to receive after the sale.

"It all depends on what the market value of the entities are," he told Soundings Trade Only. "The only way we know that is based on the bids that come in. A company that may have had a net worth of $10, if the bid comes in at $3 that's what it's worth, but it may come in also at $15."

The bidding process could take a month, and Potter said he believes it could be the beginning of next year before a buyer is known.

The committee said in its statement it believes it is "reasonable to expect" the sales process will result in a total sale price that exceeds the initial bid price.

Genmar filed June 1 for Chapter 11 and Jacobs had maintained he would reorganize, rather than put the company up for sale.

"I tried to do the reorganization and couldn't get the cooperation of everybody necessary with which to do it," he told Soundings Trade Only last week. "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.

— Beth Rosenberg

Comments

I think 'Stan & KR" have hit the nail on the head. Obvioulsy you both have experience and knowledge of the marine industry. It is to people like yourselves that we owe some successes of the past. It is too bad the leaders today don't have the same knowledge.

I learned a long time ago, the best asset a company has is its people. When you cut assets, you are eliminating a key element in operations, and success. Anyone can cut people, it takes real leaders to grow a business, or diversify.

I agree with everyone ,that says Mr. Jacob's shouldn't be able to buy back or even bid on the business for a lower cost and come out on the top.There's alot of people laid off, that had to sacrifice their homes to foreclosure ,do to his ignorance.Workers scared to death everyday, that they might have to move to relocate or lose their home and no health insurance,if one of the family members were to get sick.Paying health insurance on your own is almost as much as your monthly wages on unemployment..God forbid that you might die,theres no life insurance either!I worked 25 yrs. for this company and when the 4 Winn brothers owned it,we were treated like their family.We had birthdays paid and the day off.Christmas bonus,not to mention other incentive bonus'. After the Winn brothers sold it, thats when the CO. seemed to go down hill.The office employees got their bonus',but the factory workers got nothing , a chrismas party at the factory where everyone brought a dish to pass and ate in th factory where the boats were made. When you would hear people boasting that their factory were taking them to the Great Wolf Lodge or Grand Traverse lodge over night on them!Oh! we did get a free turkey for Christmas and that stopped a couple of yrs. back too.The greedy that had it will stay greedy to get rich...the low life as he must think of his workers, how they were treated, compared to other factory workers that got alot after talking to them.We were not appreciated!I hope that Mr. Penske will bid and get it or the Winn brothers would get it back.Wishful thinking...

Mr. jacobs has come out of this ecomonic problem smelling like a rose.Didn't he watch omc and it's boat groups fall apart. Diversity is good unless you own too much monoply in a given area.Stratos , I think , is being treated like a step child because everybody thinks they need a ranger.If jacobs continues he will down size the boat groups some companies will be lost ie javelin,grumman,in the name of making profit in the future years.The bankruptcuy court should break apart the boat groups and allow several hard working groups to thrive ,employee hard working dedicated people. perhaps competion is a good thing. At least these small companies can down size models to increase profits without majorily effecting the economy. How many times can Mr jacobs take or be part of a problem ecomony and file ch 11.Dealers are now faced with skyrocketing boat costs making it difficult to earn a profit, thus a chain.Mr. jacobs or Mr. gates stands to excell in the market of making money from misfortune .America needs the middle income person to feel secure to help motivate the economy.. Straight out SELL THE BOAT COMPANIES OFF. LET mR. JACOBS ENJOY HIS WEALTH. Money doesn't make happinies. it just helps until your dead

It has been mention that Brunswick saw the changes coming. :)))

OH YEAH, after they had over produced product based upon phoney projections by a major customer. Yes, they slowed down, and laid off people, sold plants, and cut salaries....... throughout the entire marine division and not only the Boat Group. This was for survival, and not based upon good wise managament decisions. Smart business practices, and good judgement help in developing a business plan, not reacting to situations.

The recent changes over a Union vote, and flip flopping on decisons with Stillwater, and projected savings, the managament continues to "spin" the great decisions. Nothing will happen with Brunswick production until the pipeline is reduced significantly with Marine Max. They have given concession after concession to help the eventual sales, but sooner or later, the dealer has to step up and sell the product.

In light of the recent news of our largest manufacturers and dealer, here's a suggestion. The feds allow Madoff to work furlough in the boat business. Madoff creates a dream team with Irwin and Bill Mcgill. He takes them to a field to dig up $1billion cash. They buy back Genmar and do hostile take overs of Brunswick and McgillMax. All new boats will be sold at MonopolyMax at 40% margins and all other dealers will be destroyed

2b or not 2b...that is the question? No one wishes the unemployment rate to go up any higher but it doesn't look like the government "wind blade" contract is going to work out! So...maybe we can go back to driving the beer wagon and making deliveries to the local 7-Eleven. Either way it is the American workers that are loosing their cash, savings, homes, cars and any other tangible assets they can liquidate to get by. Irwin won't suffer a bit and at his age he should be well funded towards retirement.

Everyone who happens to still be employed by Genmar, are anxiously waiting to hear how this deal works out. With all of the rumors of plant closings and relocations, it is difficult to remain positive about the job. I really hope that everything works out, and that none of the factories have to close or relocate, but at this point it doesn't look good. The remaining employees have made numerous sacrifices just to keep the plants running as best as they can, and for what? When all is said and done, do you really think that any of these sacrifices will be remembered or appreciated? I doubt it. They will all become just another face at the Unemployment Office. I keep hearing that "there is no loyalty in business anymore" and I am starting to believe it. Chapter 11 Bankruptcy should be a plan to keep a company in business without stepping on those who helped build the business in the first place. Vendors and creditors make it all possible, along with devoted people at the plant(s) and it seems that these are the ones who get the worst part of the deal. The leaders of the company that led it into Bankruptcy will not be worried about how their bills will be paid, but those who depend on this company to provide for their families WILL. What a shame.

-Still hoping for the best!

All you people that keep saying no one could see this coming you are wrong. One company saw it coming and started to make the hard choice last year to survive, they also step to the plate when it came helping out the dealers. Irwin Jacobs not telling the whole truth shocking. We are better shape inventory wise than we have been in years. Thank you Brunswick

This is unbelievable! How can a guy make horrible management decisions (ala sticking w/Sarasota so long), keep weak people around him (Roger + the rest of the clueless lackeys in Minneapolis), hose all his suppliers, lay off most of his workers, eliminate severance then have the shameless audacity to buy back what's left? This is why unions won't go away and the middle-class can't trust Wall Street. You shouldn't get a do-over Irwin - you should be out begging forgiveness for killing the golden goose!

Gordy...there is no coming down the ladder...if you are at the top you stay there, file bankruptcy and keep all of your chips. If you choose to reinvest in the industry you do so by buying back "free and clear" of all the outstanding debt. The 40 million that Irwin, and others, claim they invested in the company was probably needed to keep the 15 boat groups floating another month, or so I would guess. Mr. Jacobs initial plans may have fallen through but it is always good to have an ace in the hole!!

I hope Mr. Jacobs was nice to the people he stepped over on his way up the business ladder. He's going to pass all them on his way back down.

My late father, Bordie Mathias founded our family bussiness in 1946. Mercury was his 1st motor franchise and we continue to operated today. He taught my brother and I how to operated more efficiently in the lean times. Of course, we do not floorplan, fortunately today we continue to survive. In program year 2007, our Sea Pro Rep. pressured us into buying 60 boats (Brunswick Corp). I could see the writing on the wall. I told him I was not interested, and politely showed him the front door. Luckily today, we have money in the bank, new'used inventory, have reduced owner's salaries, and do a tremendous amount of service. We do business the old fashioned way, WE EARN IT. If the Feds or Genmar ran my business, it would have been closed 2 years ago. George A.Mathias, Pine Crest Marine Ctr. Inc.

The marine industry has had it tough. The marine industry as a whole didn't realize the finnacial corporations would downsize the industry. The big companies didn't want to aknowledge that some projections were phoney either. Everybody was playing everybody else to an extent.

Yes, boat building companies have had to layoff people, some because of union wages, some by overstocking their dealers. The dealers themselves laid off people because of no financing available to operate their business. What most companies did see was lack of new orders when dealers couldn't get financed. However, many continued to build inventory. And for that they have to take the blame.

None of this is because people have stopped buying boats, or stopped fishing, or buying lake property. If financing was readily availble today, sales would once again show growth, maybe at a slower rate, but you would see growth.

Some companies chose to negociate their debt with vendors, and some filed chapter 11, and some were just lost period. However, nobody has filed chapter 11, eliminating debt, and then tried to buy it back at a reduced investment. It is a plan in the working, and we'll just have to see where it goes.

Jacobs didn't plan this fate, but he certainly has taken advantage of the circulstances to work the system again. Is he the best in the industry, or just the most obvious in his dealings?????

Everyone knows the answer !

Irwin has spent many years building an empire and is most likely ready to cash in his chips. As a matter of fact...he had already cashed in quite a bit! ( Just remember...boating is not his only forte')

There once was a man that died 20 years to soon according to St. Peter at the gates of Heaven. So the man ask's St. Peter if he could see what Heaven was like. He was obliged. The man returned and asked if he could see what Hell was like, he was again obliged. He saw beautiful golf courses and lakes and everything that he enjoyed was just perfect. He returned to see St. Peter and went back to finish out his life.

He returned to the Pearly Gates and St. Peter 20 years later and was welcomed. He say's to St.Peter I would much rather to were all the fun was. St.Peter replied: once you go you can't change your mind. So he did

He arrived and everything was just the way you read about in the good book. After a long time the Devil stopped by to see how his stay was going. The man replied: this is nothing like my earlier visit, this is miserable, what happened, you lied to me.

The Devil replied: this is great for me! no recourse, Just SALES PITCH.

We in the Boat Business expect better and do better!!!!

It always amazes me how quickly everyone is to throw bricks at Genmar and the bankruptcy. No one foresaw what was going to happen to the economy, let alone this industry. And certainly Mr Jacobs would not have traveled down this path if it was not absolutely the only avenue available. However, maybe you are all right and I am wrong. Do you really think a man who has spent how many years being a positive force in boating and boat building wanted to see this happen? Certainly we all love working as hard as we do just to see tragic results. Understand people this is about jobs. And Genmar fed a A LOT of people. Those they employed as well at the dealer level and those that supplied them.

Now its up to a creative businessman to try and pull the remainder of the business out of the nose dive. I would like to think people here are smart enough to know if Brunswick sticks its nose in here and stirs the pot we all lose. Just ask all the dealers who made money selling Sea Pro and Sea Boss....no one wants that out of any Genmar line. I wish him the best. Keep trying, keep building.

Great follow up comments ...... Jacobs history tells the story, no matter what you think should happen. If you do business, there is only one way, and that's straight up. If you manipulate the system, someone always looses. He may be savvy by some definition, but a little slick by another.

Perhaps Mr. Jacobs wishes he were as smart as everyone believes. If he and everyone at Genmar could have forecasted and planned for the significant downturn in the industry, they would have. To the benefit of Genmar - and all their partners. It's tenacity that drives forward movement believing - with difficulty breeds opportunity.

I think Mr. Jacobs should be able to use his savvy business skills as a liquidator to come out on top. After all...it was all of his employees who have lost their jobs that have limited recourse for his actions. The "primary company" as a whole is really just the pieces that he is already willing to part with!

Mr. Jacobs is a smart businessman, who knows how to manipulate the system to an advantage. I would submit the question, where is the legal system monitoring this transaction, along with the FTC ? If you want action, you know who should be contacted.

Mr. Jacobs has a history of manuvering business principles, and practices to achieve desired results. If for any reason somebody doubts his previous efforts, just review company history and interview previous management of Genmar. The facts aren't surprising when you look at his personal actions of the past.

I think it would be a shame if the same man who led Genmar into bankruptcy were to be allowed to buy it back minus a significant portion of the debt that it incurred. There ought to be a law barring an owner or previous owner from a buy back. If Mr. Jacobs owning Genmar resulted in a bankruptcy what would lead one to believe he won't put it there again? Who gains? I'm betting it won't be the dealers and it won't be the employees or the customers either. The only person who stands to gain from a buy back is the man who put it on the chopping block to begin with, Mr. Jacobs. It isn't my understanding that bankruptcy procedures were designed to benefit the claimant by allowing them to relinquish portions of their liabilities by filing and then buy their assets back. A person shouldn't ask for help, receive it so graciously and yet in the end come out in a better position than that from which they started. It's more than wrong it's immoral. Just my opinion.

Imagine that Irwin Jacobs not telling the truth

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