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."
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