Skip to main content

Unsecured creditors want Genmar auction results thrown out

The Official Committee of Unsecured Creditors in the Genmar bankruptcy case is asking a judge to set aside the results of last week's auction or, alternatively, deny approval of Irwin Jacobs' bid for the Carver and Marquis lines.

The committee says it appears the aggregate amount of the prevailing bids will not satisfy the secured claims, the Chapter 11 administrative expense claims and will provide nothing for the prepetition unsecured creditors as a group.

There are an estimated 4,000 unsecured creditors that are owed more than $100 million, according to court documents.

On Friday it was announced that California-based Platinum Equity had purchased the majority of Genmar Holdings' assets for $70 million. Carver and Marquis were purchased for $6.05 million by J&D Acquisitions, and MCBC Hydra Boats, a subsidiary of Wayzata Investment Partners, purchased Hydra-Sports for $1 million.

A court hearing to approve the sale is set for Wednesday, with the closing set for Jan. 20.

The committee also objects to the decision to award J&D Acquisitions the winning bid for the yacht group brands and the facilities in Pulaski, Wis., over an identical bid made by Genmar Yacht Acquisition, which the committee said is an affiliate of Patriarch Partners LLC.

J&D Acquisitions is a company founded by Jacobs and billionaire businessman John Paul DeJoria.

If the J&D bid is approved, it would divert Jacobs' assets to the secured creditors, making those assets unavailable to satisfy the avoidance causes of action that will benefit the unsecured creditors, the committee said.

"The committee objects to Jacobs, an insider, or his non-debtor affiliates using any of their assets to reacquire portions of the debtor's businesses while leaving over 4,000 unsecured creditors, owed over $100 million, unpaid," the committee said in court documents.

"The debtors' selection of the J&D bid rather than the GYA bid, solely on the basis that the GYA bid matched, rather than exceeded, the J&D bid, is an insufficient reason to approve the J&D prevailing bid in the face of other considerations," the committee said. "Both the interest of the unsecured creditors and the goal of maximizing the value of the debtors' estate dictate that the J&D prevailing bid should not be approved."

The committee also said it appears GYA is likely to be better capitalized and a more reliable customer for the unsecured creditors to do business with than Jacobs or his affiliates.

On its Web site, the committee says a representative of GYA "will continue negotiations to present the winning bid" at Wednesday's court hearing.

Jacobs could not immediately be reached for comment.

- Beth Rosenberg

Related

1_LIMESTONE

Limestone Secures Financing for Expansion

The company said the $6 million in credit will be used to improve its Tennessee manufacturing facility and buy new equipment.

1_MCKENZIE

Mastry Marine Names Repower Center

St. Augustine, Fla.-based McKenzie Marine is the engine distributor’s latest designated Suzuki Repower Center.

1_VANDERBILT

Vanderbilt Ships First Pontoon

The company said the 700T Series was the first model shipped from its new Fort Wayne, Ind., factory and was delivered to The Marina in Angola, Ind.

1_CHIPS.ACT

NMMA Celebrates CHIPS Act

The legislation aims to return semiconductor manufacturing to the U.S. and allows businesses to deduct R&D costs in the same year they are incurred.

1_COX

Cox Marine Hires Sales and Support Staff

The diesel outboard builder this week brought aboard a new regional sales director, regional sales manager and an aftersales manager.

1_DEALEROUTLOOK

Boating Interests Lose Wind Farm Battle

The Ohio Supreme Court has ruled that a proposed wind farm off the Cleveland, Oh., waterfront meets planning requirements.

1_INFLATION.JULY

July Inflation Data Lags June

Consumer Price Index results may indicate that inflation has peaked, and Producer Price Index data was below market expectations.

1_YAMAHA

Yamaha Posts Higher Sales, Profit

The company’s first half 2022 net sales increased to $1.93 billion, and segment income rose to $330 million.