Genmar Holdings chairman Irwin Jacobs is calling a move to form a committee of Genmar dealers who want their interests represented in court the "most insulting, obnoxious thing I've ever seen or heard about in my life."
The Marine Retailers Association of America announced this week it is working to form the committee as Genmar moves through the reorganization process following its June 1 Chapter 11 bankruptcy filing.
"I don't understand where [MRAA president Phil Keeter has] come up with all this concern," Jacobs told Soundings Trade Only. "The financial condition of Genmar, even in [Chapter] 11 is better off than most companies who are not in it. We paid our banks now $10 million since we've been in [Chapter] 11. We have ... hundreds of millions of dollars in assets."
"I've worked my whole life to take care of my dealers, not to destroy them," he added.
Genmar says it has about 1,100 dealers worldwide for its 15 boat brands.
"We've had an inordinate amount of calls from Genmar dealers in almost a panic mode, not knowing what to do," Keeter told Soundings Trade Only. "Most dealers don't have the wherewithal to hire an attorney to represent them in that at all, and being unsecured creditors they're going to be way down on the list."
The committee of Genmar dealers would be represented by New York-based law firm Bellavia Gentile & Associates. MRAA has a longstanding relationship with the firm, and its managing partner, Leonard Bellavia, played a leading role in the General Motors and Chrysler bankruptcies on behalf of those auto dealers, Keeter said.
MRAA has negotiated a flat-fee arrangement of $1,000 per dealer to become a part of the committee.
Bellavia, in an e-mail to Soundings Trade Only, said a "unified committee of similarly situated dealers will help level the playing field in bankruptcy court."
"The unsecured creditors committee [already in place] is not exclusively for dealers," he said. "It is for such a divergent group that individual dealer issues will not be the centerpiece of the representation. Dealer issues are unique and cannot be lumped together with the issues a bank, supplier or transporter may face."
Chrysler and GM presented the same issues that Genmar will, he said.
"If the rejected dealers in Chrysler did not have a committee, they would be sitting with unsold new vehicles which would have fetched 50 to 60 cents on the dollar. Warranties would not have been honored," he said. "In GM, every dealer, rejected or continuing, would have all of the state dealer statutes eliminated if it weren't for collective action."
"The Genmar dealers will be the subject of similar attempts if they are not represented in court as a group," Bellavia added.
Jacobs said it is "outrageous" to compare Genmar to Chrysler or GM, adding there are "absolutely zero" comparisons between them. Also, he added, Genmar has been sending out its warranty checks and will continue to do so.
"What does [Bellavia] think he could do differently than the courts [can do] or we can do?" Jacobs said.
Bellavia noted that the point of Chapter 11 is to reorganize and "start with a clean slate" with vendors, dealers and other entities.
Why Jacobs would leave one group, such as dealers, "completely intact kind of belies the history of bankruptcy reorganization," Bellavia said.
— Beth Rosenberg