Premier Pontoons emerged from bankruptcy after a private lender, now the shareholder of the company, made the highest bid for the company.
The loan was funded in July by Terry Astleford and the company returned to profitability in August, just two months after filing for Chapter 11 in June, Premier’s new CEO Rick Gallagher told Trade Only Today.
“He saw the value of Premier when it was having difficulty just prior to bankruptcy and agreed to make the loan,” Gallagher said. “He saw the opportunity to purchase the equity in the bankruptcy and ultimately was the highest bidder.”
Two of the company's founders, Bob and Betty Menne, have employee agreements, as does executive vice president Lori Melbostad.
“There’s a lot of very good talent in this building and we’re excited about what we’re going to do now that the shackles of bankruptcy are off,” Gallagher said. “We’re going to get to do some of the things we had to put on pause.”
Gallagher, who served as the financial advisor to the bankruptcy before being named company CEO, is joined by Edward Wicker, who was hired as the new chief operating officer.
“The reality is that it takes, as you know, a lot of work to get creditors on board,” Gallagher said. “We have a plan of reorganization that had over 80 percent support of all creditors and 100 percent support of secured creditors. It really is a situation of what is best for everyone.”
“We’re a very relationship-based business,” Melbostad told Trade Only. “That’s the way we’ve always been, and that’s the way we’ll be moving forward. We have to have everyone — employees, vendors, dealers, and retail customers — to be successful. We have such a strong brand coming through this, and a lot of people rooting for us. You can’t set that aside.”
The company never stopped production, though it did slow after dealers lost the ability to floorplan the luxury pontoons and instead had to pay cash to get them on their showroom floors, Melbostad told Trade Only.
Wells Fargo Commercial Distribution Finance LLC terminated Premier’s dealer floorplan financing program, effective Jan. 31, court documents said.
“The dealer network is really strong too,” said Mike Menne, marketing manager for Premier. “We couldn’t have done it without them.”
Premier Marine, maker of Premier Pontoons, filed for Chapter 11 on June 19 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 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.
Premier was able to retain and fill positions needed throughout the bankruptcy, Melbostad said, adding: “The skill level of our employee base is very good.”
While the bankruptcy was difficult, Melbostad loyal Premier customers helped get her through.
“I had retail customers calling to say, ‘Hi, I put a boat on the schedule, and I realize I have to wait but I’ve done my research and I want you to hear my story,’” she said. “I had so many calls last summer, story after story. It kept giving me strength that we could do this. When they did get their boats, they would call or email and say, ‘I got my boat and I don’t have a regret, even if I missed a boating season.’ Many times, you don’t understand and appreciate that, but we certainly appreciate it today, and we won’t forget that.”
Premier is now looking forward to introducing a new model for model year 2019.
“The team’s excited to show people what we do now,” Gallagher said.
“We’re excited to show both the dealer network and vendors that the investment of time and energy during the bankruptcy — they are going to see the reward from that in the coming years,” Mike Menne said. “Even though they were confident they were making a good decision by sticking with us, it will turn out they made a great decision.”