Half of the money spent to buy Hydra-Sports is being dispersed to dealers who claimed they were owed money after Genmar declared bankruptcy, according to MCBC Hydra Boats president and CEO John Dorton.
Half of Wayzata Investment Partners' $1 million bid to purchase Hydra-Sports was put into escrow to help refund 85 to 90 percent of the $600,000 dealers said they were owed when Genmar filed last June for Chapter 11 bankruptcy, Dorton said.
Wayzata Investment Partners, which also owns MasterCraft, bought the former Genmar brand in December.
When the sale was finalized two weeks ago, representatives of Houlihan Lokey Howard & Zukin Capital Inc., which managed the auction, were to go down the list of claims and distribute the money dealer by dealer.
"We thought that was a fair way to get them back to whole," Dorton said. "People saw the purchase price and thought it was pretty low, but then you break it up and see it did take care of the dealers. We thought that was a pretty nice carve-out."
A few dealers who had made claims before Genmar filed bankruptcy were "a little upset" their claims wouldn't be covered, Dorton said.
Dorton did not say exactly how many prepetition claims dealers had filed.
"There were one or two fairly large totals and a couple smaller ones," Dorton said. "It's none of our business what happened before the Chapter 11 filing, so I may not have seen the complete list, but at least on the Hydra-Sports side, it didn't seem to be a huge number."
All "viable and credit-worthy dealers" indicated they would stay with the brand and have already placed orders, Dorton said.
MCBC Hydra Boats also announced it would pay part of the warranties for new 2008 and 2009 boats in dealer showrooms, even though those model years were built by Genmar-owned Hydra-Sports.
"It will not be full participation like it would be on the boats we've built," Dorton said.
Dorton wouldn't say how much would be covered, but he did say the company is helping offset labor costs incurred for filling warranty work on those boats and is covering most of the cost for parts.
— Reagan Haynes