Most Fountain creditors approve reorganization; voting continues

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The majority of unsecured creditors in Fountain Powerboat Industries' bankruptcy case approves of the company's reorganization plan, according to documents filed this week in U.S. Bankruptcy Court in the Eastern District of North Carolina.

Documents show that, of the unsecured claimants that voted, 47 - or 90.38 percent - accepted the plan, while five, or 9.62 percent, rejected it. Not all unsecured creditors cast a vote.

The estimated claims of unsecured creditors approving the plan are $1,309,874, while the estimated claims of those rejecting the plan are $105,036.

Other creditors accepting the plan include: National City, Baja Marine Corp., Bank of America, GE Commercial Distribution, Key Bank and Textron Financial.

FB Investments and Avaya Financial Services, each of which is listed in its own class of creditors, have not yet voted.

FB Investments, the corporation formed by the principals of Oxford Investment Group for the purpose of acquiring the Regions Bank note on Fountain, was given until Monday to cast its vote on the proposed plan.

Fountain Powerboat Industries' reorganization plan divides the claims against the company into nine classes and calls for the "allowed unsecured claims" to receive a share of $1 million in full satisfaction of the claims.

The aggregate amount of the claims is an estimated $3.39 million, according to court documents, so a cash distribution of $1 million among all unsecured claims would provide a payment to claim holders within a range of 5 to 18 percent, Fountain estimates in its plan.

"While the proposed plan offers unsecured creditors less than full payment, the debtors firmly believe that such a distribution will be substantially greater than could be obtained through an orderly or forced liquidation of the debtors, and represents the most that can be reasonably expected as the debtors exit Chapter 11," Fountain said in its disclosure statement of the reorganization plan, which it filed in November.

"The plan contemplates that the best opportunities for creditors lies in (i) continued operation of the business, (ii) modification and restructuring of the existing secured debt, and (iii) satisfaction of the unsecured claims by means of one cash payment from a capital advance funded by the party acquiring the new equity interests in the reorganized debtors," the disclosure statement reads.

The reorganized Fountain would continue to operate as a boatbuilder, with funding from Liberty Associates used as the primary means to put the plan in place and provide payment to the holders of allowed claims.

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