California-based FB Investments is not giving up in its bid to own Fountain Powerboat Industries and is asking a bankruptcy court judge to terminate the period during which Fountain has the exclusive right to file a reorganization plan.
If the court grants FB Investments' request, "FB could file a competing plan, allowing the creditors of this case to choose whether the debtor's plan, FB's plan or any other interested party's plan represents the best hope for the future of this enterprise," FB said in documents filed this week in U.S. Bankruptcy Court in the Eastern District of North Carolina.
"FB believes that it will prevail in an environment where the interested parties compete on a level playing field," it said in court filings.
Fountain's exclusivity periods currently expire Dec. 22 and Feb. 20.
FB Investments is a corporation formed by the principals of Oxford Investment Group for the purpose of acquiring the Regions Bank note on Fountain. It purchased the $19 million note at auction for $6.75 million and had put in an unopposed credit bid of $8.75 million for Fountain.
Fountain, however, opposed the sale to FB and asked the court for permission to reorganize with Liberty Associates. Permission was granted last month, and Fountain must now make monthly payments of $29,375 to pay off the $19 million note FB Investments bought from Regions Bank.
In denying the sale, the judge noted, "The exclusivity period in which the debtors may propose a plan of reorganization has not expired, and at this early stage of the case the debtors should be afforded a reasonable opportunity to pursue a plan which may provide greater benefit to unsecured creditors than the proposed sale."
Reorganizing with Liberty Associates, which also recently became majority shareholder of Donzi Marine and Pro-Line Boats, would allow company founder Reggie Fountain to remain head of the company he founded 30 years ago.
FB, which in previous court filings said it would not retain Reggie Fountain as head of the company if it were to purchase it, said in filings this week it still believed it offered the best plan for the future of the company.
"FB believes that it offered and continues to offer the most promising opportunity for the continued operation of the Fountain Boat enterprise in North Carolina, the greatest return to existing creditors of the debtors, and the most promising future for the debtor's employees, the debtor's customers, suppliers, dealers and the Washington, N.C., community," FB said in court documents.
Reggie Fountain did not return a call seeking comment.
Fountain Powerboat Industries, along with subsidiaries Baja by Fountain, Fountain Dealers' Factory Superstore and Fountain Powerboats, filed Aug. 24 for Chapter 11 bankruptcy protection.
— Beth Rosenberg