Grand Large Yachts bought Gunboat International for $910,000 in cash and has committed to continue the brand and to have a U.S. presence, although it is not clear whether the company will continue its operations in Wanchese, N.C.
That’s according to an audio file of a final sale hearing April 26 in U.S. Bankruptcy Court in the Eastern District of North Carolina that Trade Only Today recently obtained.
China-based Hudson Yacht Marine — the entity tied up in litigation with Gunboat regarding what Gunboat founder Peter Johnstone called shoddy work, which the company denied in a countersuit — also submitted a bid to buy Gunboat out of bankruptcy for $610,000, but Grand Large ultimately outbid it.
The bid from Grand Large, called GL Yachting USA, includes a waiver for unsecured claims totaling about $4.6 million, Gunboat attorney Laurie Biggs said in her testimony. Grand Large Yachts is the parent company of French boatbuilders Allures Yachting, Garcia Yachting and Outremer Yachting.
“We also evaluated heavily that [Grand Large] committed to continue the brand, continue to build Gunboats and continue that operation, and have a U.S. operation to help that presence, with that brand building, and service the owners who already have Gunboats and owners who still want their boats,” Biggs said in testimony before U.S. Bankruptcy Judge David Warren. “That was a factor we heavily considered in evaluating whether they were the right purchaser for this business.”
The sale, which hasn’t yet closed, GL Yachting USA told Trade Only Today, did not include the G4 tooling, according to the hearing. That tooling is pending a sale for $108,000 to a third party whose name could not be confirmed, as more time was requested to iron out details of the transaction.
Asked whether the company will continue on North Carolina’s outer banks, Biggs said her understanding is that it would like to remain if the buyer can reach acceptable terms regarding the facility’s lease.
Grand Large has invested a “substantial amount” in distressed companies since February, the company attorney J.R. Smith said in testimony.
“Between 2007 and 2013 they expanded by acquiring three other distressed French boat brands and have successfully turned all of them around,” Smith said.
“They’ve maintained operations, enhanced them, and they now employ over 240 individuals in France,” he said. “They’ve won numerous awards for their boats and are well known in the international yachting scene.”
“Gunboat is a fantastic brand. That’s really what got their attention,” Smith said. “Started by Peter Johnstone, it’s had some operational setbacks and difficulties that have caused us to be where we are today. Which is unfortunate, but my client, Grand Large Yachts, is committed to being in the United States. As Ms. Biggs said, whether we’re able to do so in Wanchese is unclear at this point, due to some factors that are outside of their control.”
The company received visits from about seven viable potential bidders, said Matt Smith, managing director of the Finley Group, the company handling the sale.
“We received three bids by bid deadlines,” Smith said. “One bidder dropped out in the last week. We also received a bid from Hudson … for $610,000. Grand Large was declared the high bidder [due to] the ultimate terms of the cash component of $910,000, the waiver of $4.6 million in claims, plus the hulls purchased, plus the commitment to the brand.”
A company called Firefox has committed to purchase Gunboat’s Pure RIB line for $30,000, Smith said.
Both the G4 and the Pure line would not be be permitted to use the Gunboat name if they were to produce the boats, as those rights were purchased as part of the sale to Grand Large.
Principals at Grand Large did not want to comment until the sale was closed.