Announcing that his company had filed for bankruptcy, Genmar Holdings chairman and CEO Irwin Jacobs noted that previous economic downturns "do not even remotely resemble" anything close to what has taken place in the industry during the last year.
Genmar, the country's second-largest boatbuilder, yesterday filed for Chapter 11 reorganization protection in U.S. bankruptcy court in Minnesota. The filings were made by Genmar Holdings and its subsidiaries.
The debtors intend to file a motion for joint administration of their Chapter 11 cases.
According to court documents, Genmar's board of directors decided May 29 that it was in the best interest of the company to file for Chapter 11.
"If someone would have said to me as recently as even one month ago that Genmar would someday be filing for Chapter 11, I would have said it was not even a remote possibility," Jacobs said in a statement.
"I've always looked for ways to enhance Genmar's balance sheet and felt that, even though business conditions were incredibly difficult, there were alternatives available," he added. "Unfortunately, I didn't have the necessary time to complete any of the alternative financing acceptable to the banks."
Jacobs did not immediately return a call for comment this morning.
In his statement, Jacobs said Genmar has access to sufficient cash and has current assets available to support its ongoing business and pay its vendor suppliers on future purchases.
The company has received a commitment for a Debtor-in-Possession financing proposal from Wells Fargo and Fifth Third banks that will be submitted to the court for approval, Jacobs said.
"Additionally, in the first court hearing, Genmar will be asking the bankruptcy court for approval to allow Genmar to pay appropriate dealer warranty and rebate claims," he added.
Genmar has more than $100 million in current assets, as well as additional fixed assets and intangible assets that will allow the company to come through this, Jacobs said in his statement.
According to court documents, Genmar Holdings has between 100 and 199 creditors. the company has listed assets of $237.5 million and liabilities of $216.5 million. Jacobs said these figures do not include more than $400 million in intngible assets.
In the list of creditors holding the 20 largest unsecured claims, Minneapolis law firm Maslon, Edelman, Borman, Brand is listed as the largest, with a claim of $186,690. Other creditors include additional law firms, Deloitte Tax, PricewaterhouseCoopers, Statistical Surveys and Google.
Jacobs said he plans to reorganize and come out of Chapter 11 "as a stronger and better company." The company will submit its overall reorganization plan for approval to the court as soon as possible.
Genmar has until Sept. 29 to file its Chapter 11 plan with the court, documents show.
Minneapolis-based Genmar Holdings has approximately 1,500 employees in five manufacturing centers. The company builds 15 boat brands, including the recently introduced FinCraft, which are sold worldwide through its approximately 1,100 dealers.
— Beth Rosenberg