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Fountain reorganization plan meets opposition

FB Investments approved a revised reorganization plan proposed by Fountain Powerboat Industries, court documents show. The unsecured creditors, however, have filed a motion asking the court to deny confirmation of this amended plan.

The revised plan changes the amount of money going to some of the various classes of creditors, including FB Investments.

In its ballot, FB Investments lists its claim against Fountain at $19.8 million, with the reorganization plan listing $8 million as a secured claim and $11,829,522.23 listed as an unsecured claim. FB Investments is the corporation formed by the principals of Oxford Investment Group for the purpose of acquiring the Regions Bank note on Fountain.

In its latest filing, the unsecured creditors committee said it has learned the debtors agreed to cash out FB investments' claim for $7.4 million, with $6.9 million being paid for the release of the secured claim and $500,000 for the full satisfaction of the unsecured claim.

That $500,000 would come from the $1 million that was originally to be paid to the class of the general unsecured creditors.

"... [The unsecured creditors committee] has not yet determined that the settlement is in the best interest of the unsecured creditors," the committee said in court papers. "The committee continues to examine the settlement and the first amended plan; however, until such analysis is complete, the committee objects to the settlement and the first amended plan of reorganization."

The committee wants assurances the unsecured creditors will be allowed to "examine the revised treatment and cast its ballots accordingly," it says in court filings.

The majority of unsecured creditors in Fountain Powerboat Industries' bankruptcy case previously approved the company's reorganization plan. Documents show that, of the unsecured claimants that voted, 47 - or 90.38 percent - accepted the plan, while five, or 9.62 percent, rejected it. Not all unsecured creditors cast a vote.

Other creditors accepting the plan include National City, Baja Marine Corp., Bank of America, GE Commercial Distribution, Key Bank and Textron Financial.

Avaya Financial Services has not voted, according to court documents.

Fountain Powerboat Industries filed Aug. 24, 2009 for Chapter 11 bankruptcy protection.

Click here to view the amended reorganization plan.

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