A North Carolina Business Court judge appointed a temporary receiver in First Capital's case against Fountain Powerboats and other defendants.
Last week, Judge James Gale named Ronald Glass and the firm GlassRatner Advisory & Capital Group as temporary receiver of all borrower defendants, all assets of all borrower defendants and all equity, capital stock and/or membership interests of all defendants.
GlassRatner describes itself as “a national specialty financial advisory services firm providing solutions to complex business problems and board-level agenda items.”
The borrower defendants listed in the case include American Marine Holdings, Donzi Marine, AMH Government Services, Pro-Line Boats, Fountain Powerboats LLC, Fountain Powerboat Industries, Fountain Powerboats Inc., Fountain Dealers’ Factory Superstore, Baja by Fountain, Palmetto Park Financial, 50509 Marine, Liberty Acquisition FPB and Joseph G. Wortley.
A hearing on an appointment for a continuing receivership is set for Nov. 2, with provisions for it not to continue past Nov. 4, according to court documents.
In his order, Gale wrote, “There are immediate business decisions necessary to the protection of the interests of all parties, which should be made by a receiver. Plaintiff has indicated that it is only willing to provide additional financing if a receiver is appointed for all borrower defendants and immediate funding is necessary to protect the interests of all parties, including employees of the Fountain defendants.”
The court considered “less intrusive remedies” Gale noted, but no such remedy was agreed to by either side.
“The plaintiff will suffer irreparable harm if this court does not impose a receivership …,” Gale added.
First Capital is seeking $61.04 million in damages from Fountain Powerboats and other entities for the "borrower defendants' " breach of loan agreements, according to documents filed earlier this month in North Carolina Business Court.
The lender said operations at Fountain’s plant, where Donzi and Pro-Line boats are also built, ceased Oct. 7 and that the executive management and production manager resigned. Employees were told to go home and not report to work until further notice.
In its court papers, First Capital also alleged misappropriation of funds.
Prior to the latest filings, Liberty Associates announced it had ceased providing management services to American Marine Holdings and Liberty’s affiliate transferred its nominee ownership interest in American Marine to First Capital, a portfolio company of HIG Capital.