A final hearing to confirm the sale of Fountain Powerboat Industries' assets will be held Friday, despite a motion by Fountain to postpone the scheduled sale.
In court papers filed in U.S. Bankruptcy Court in the Eastern District of North Carolina, Judge Randy Doub on Monday denied Fountain's request to postpone, saying the company must proceed with the sale. A final hearing to confirm the sale, and any objections that may be filed, is set for 9:30 a.m. Friday.
In court filings, FB Investments noted that its credit bid of $8.75 million was unopposed.
FB Investments, a corporation formed by the principals of California-based Oxford Investment Group for the purpose of acquiring the Regions Bank note on Fountain, had opposed Fountain's request, calling it a last attempt of "founder Reggie Fountain to try and retain control of the company he stewarded into insolvency."
Neither FB nor its attorney, or Reggie Fountain or his attorney, could be reached for comment this morning.
Fountain filed Aug. 24 for Chapter 11 bankruptcy protection. In its filing the company asked the court for permission to sell "substantially all" of its tangible and intangible assets.
However, in court documents filed in U.S. Bankruptcy Court in the Eastern District of North Carolina, Fountain says that on Sept. 17, creditor Regions Bank sold its note to FB Investments.
Meanwhile, Fountain said the company received an alternative proposal from Liberty Associates in which Liberty would provide financing that would allow Fountain to continue operations and fund a proposed agreed plan of reorganization. Liberty, as part of the deal, would keep Reggie Fountain on board as president of the company.
FB said that, in its talks with Reggie Fountain, it told him of its plans to "utilize debtors' business as a platform to develop a broad-based branded boatbuilding business headquartered in Washington, N.C., with growing local employment utilizing local resources," according to court documents. "FB Investments had serious conversations with Mr. Fountain about coming to work for the new company to realize these ambitious plans but was not willing to offer him the position of CEO."
It was then, FB said in court documents, that Reggie Fountain told the group he did not want to work with them, and days later filed papers to stop the sale.
In its court filings, Fountain said it wanted to stop the sale because Liberty's proposal was in the best interest of creditors.
"The debtors believe that this alternative proposal from Liberty would appear to offer other creditors in this proceeding at least some opportunity to receive a distribution on allowed claims and, thus, may be in the best interest of the debtors' estate as compared to the proposed sale," Fountain said in court documents.
— Beth Rosenberg