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Genmar objects to FLW Outdoors motion on engines - Trade Only Today

Genmar objects to FLW Outdoors motion on engines

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Objections were filed to FLW Outdoors' expedited motion that it be allowed to obtain possession of 46 engines - valued at more than $450,000 - it says are now with Genmar's Ranger and Stratos boat companies, but owned by FLW Outdoors.

Genmar Holdings and the Committee of Unsecured Creditors in the Genmar bankruptcy case both filed objections last week to the motion.

A hearing is scheduled for today in bankruptcy court in Minnesota.

The engines in question are 42 Evinrudes and four Yamahas.

FLW says it still holds the Manufacturer's Statement of Origins for 20 engines in Ranger's possession, with a combined value of $188,667.50 and holds the MSOs for 22 engines in Stratos' possession with a combined total value of $223,244. It also holds the MSOs for four Yamaha engines with a combined total value of $39,846.80.

Genmar, in its objection, says, "Under applicable law, title to the engines passed upon physical delivery and FLW Outdoors has no rights of ownership or possession."

Genmar also disputes FLW's explanation of agreements FLW had with Ranger and Stratos boats over the engines.

The Committee of Unsecured Creditors says it, and others, object to FLW's request, because they have not had enough time to learn all the facts necessary to respond.

"For that reason, the UCC supports the objections (or anticipated objections) of the debtors and Wells Fargo," according to court documents. "The UCC understands the debtors and Wells Fargo believe strongly (for factual and legal reasons) that FLW does not have a perfected interest in the engines."

Also, the committee says FLW did not explain why, after five months from the beginning of this case, it suddenly needed expedited relief from the state. The engines in question have been in possession of the debtors all of that time.

Genmar agreed, stating, "The motion does not demonstrate that the risk of additional sales between the emergency hearing date and a properly noticed hearing is any greater than its risk during the five months of this case in which FLW Outdoors failed to bring the motion. FLW also fails to explain how potential conversion of an engine into cash or a receivable diminishes its rights on those proceeds, assuming it holds such rights."

FLW said it is seeking emergency, expedited relief in the case "because, upon information and belief, Ranger and/or Stratos has purported to sell or may attempt to sell one or more of the FLW engines in direct violation of their prior agreement with FLW Outdoors," according to court filings.

"Upon information and belief, one or more of the FLW engines have been installed on boats and/or transferred to third parties without the prior permission of FLW Outdoors and is in direct contravention of FLW Outdoors' ownership interest in them," documents state. "In lieu of expedited relief, FLW Outdoors seeks an order temporarily restraining the debtors from transferring any of the FLW engines or taking any other action that could affect FLW Outdoors' ownership interest in them ..."

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