A North Carolina bankruptcy court judge denied California-based FB Investments' motion to terminate the period during which Fountain Powerboat Industries has the exclusive right to file a reorganization plan.
Fountain filed its plan Nov. 20, though its exclusivity periods expires Dec. 22 and Feb. 20.
"Given the fast-track nature of this case, the debtors have not had the opportunities to negotiate with creditors or other parties-in-interest and there have been no amendments to the proposed plan. FB argues that it will attempt to block any plan proposed by the debtors that does not transfer ownership of the debtors to FB," the court noted in its decision.
"However, the court recognizes the importance of providing the debtor some breathing room to negotiate with the parties without a competing plan to undermine its efforts," the court added. "All parties are aware that FB intends to file a competing plan, either now or upon the termination of exclusivity ...
"A competing plan at this point could be fatal to any reorganization efforts by the debtors," the court concluded.
FB Investments is a corporation formed by the principals of Oxford Investment Group for the purpose of acquiring the Regions Bank note on Fountain. It purchased the $19 million note at auction for $6.75 million and had put in an unopposed credit bid of $8.75 million for Fountain.
Fountain, however, opposed the sale to FB and asked the court for permission to reorganize with Liberty Associates. Permission was granted and Fountain must now make monthly payments of $29,375 to pay off the $19 million note FB Investments bought from Regions Bank.