Minneapolis-based boat manufacturer Genmar Holdings has filed for Chapter 11 bankruptcy protection. The company founder Irwin Jacobs says Genmar has suffered from a rapid decrease in sales due to the credit crisis and weak economy. In court filings, Genmar also says banks have reduced available credit.The company’s Chapter 11 petition filed Monday lists assets of $237.5 million and liabilities of $216.5 million. Jacobs says the bankruptcy petition does not include over $400 million in intangible assets.Jacobs says Genmar’s revenues for the year ending June 30 should drop by more than half to about $460 million.The rest of the boating industry has also suffered from higher gasoline prices and the recession. The National Marine Manufacturers Association has said sales of new boats fell 30 percent in 2008 and are expected to drop another 20 percent this year.
Below is the press release issued yesterday regarding this news:
GENMAR HOLDINGS, INC. FILES FOR CHAPTER 11 REORGANIZATION IN THE U.S. BANKRUPTCY COURT
June 1, 2009. Minneapolis, Minnesota.Genmar Holdings, Inc. (Genmar) announced today that it has filed for Chapter 11 reorganization protection in the U.S. Bankruptcy Court. Irwin L. Jacobs, Chairman and CEO of Genmar, stated, “I have been in the boating industry for over 30 years, and throughout those many years, I have personally experienced several of what I thought were the worst and most difficult business conditions our industry had ever gone through.However, those conditions do not even remotely resemble anything close to what has taken place in the retail and wholesale recreational boating industry over the past approximately 12 months. 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. 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. Unfortunately, I didn’t have the necessary time to complete any alternative financing acceptable to the banks. I am sure none of that is necessarily comforting to those individuals and/or companies who are being affected by Genmar’s filing for Chapter 11.
Although it’s impossible for me to try to anticipate and/or answer in this press release all of the questions that I am sure are being asked by our Genmar dealers, vendors, and employees, it is important that every interested party affected by
Genmar’s situation knows that we plan on successfully reorganizing and ultimately coming out of Chapter 11 as a stronger and better company with a bright and stable future ahead in the recreational boating industry. Surely it’s going to be very difficult for most people to understand and/or anticipate the stressful days, weeks, and months ahead. I know I can speak for everyone within Genmar, including myself, that we are fully committed not only to getting through the very difficult and stressful times that are ahead of us, but we’re committed to attempting to do everything humanly possible throughout the Chapter 11 proceedings in trying to help each Genmar dealer, vendor, and employee as best we can. I have every reason to believe that GE Finance will continue their Genmar dealer floor plan financing program subject to the Court’s approval, which will take place over the next few days.”
Jacobs further stated, “We believe that Genmar will have access to sufficient cash and has current assets available to support our ongoing businesses to service and build dealer boat orders and pay our vendor suppliers on future purchases promptly. Genmar has received a commitment for Debtor-in-Possession (DIP) financing proposal from the Wells Fargo and Fifth Third banks that will be submitted for approval to the bankruptcy court in the first bankruptcy hearing scheduled to take place within the next few days. 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. Genmar currently has over $100 million of current assets as well as substantial additional fixed assets and intangible assets that we believe will allow Genmar to come through and exit the Chapter 11 proceedings as a financially stable and strong company with a great future ahead of it in the boating industry. Further, Genmar will be submitting an overall reorganization plan for approval to the bankruptcy court as soon as possible, which will include the necessary details for all interested parties to better understand Genmar’s short and long-term plans and objectives in ultimately successfully exiting the Chapter 11 proceedings.
It’s our intention to do everything we can to protect and support our valuable Genmar brands which will ultimately allow Genmar to exit Chapter 11 and continue to be a leader in the recreational boating industry.”
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