Genmar files Chapter 11 bankruptcy in the US
by Media Services on 3 Jun 2009
Genmar CEO Irwin Jacobs. MIAA
As US and global headlines announce the 100-year old General Motors’ collapse under US$172.8bn debt, and plans for shutting down more than 14 plants and 2600 dealerships in the US, Genmar Holdings Inc has also filed a bankruptcy petition under Chapter 11.
The Minneapolis-based boat builder, the second largest in the US, founded and headed by Irwin Jacobs, filed for protection from its creditors under federal bankruptcy laws on Monday 1 June.
Jacobs said the credit collapse and weak economy have decimated sales of everything in Genmar's product line, which includes 12-foot fishing boats, runabouts for water skiing and tubing and luxury yachts for millionaires in the United States and 40 other countries.
The sales decline began in 2008 but has worsened in recent months, which are typically a peak sales period for Genmar and others in the boat business. Jacobs, who made his name buying bankrupt businesses, was quoted as saying he never thought this day would come for Genmar.
“Even up until the last few weeks, this is something I never even dreamt was a remote possibility,” he said.
The company's Chapter 11 petition filed in US Bankruptcy Court listed assets of $237.5m and liabilities of $216.5m.
In court filings, Genmar also said tighter requirements from its banks propelled it into bankruptcy. “Despite restructuring steps and infusion of significant equity, the bank reduced [credit] availability. The bank rejected all ... proposals for making adequate capital available and continued to reduce the borrowing base.”
Genmar is the umbrella brand for 13 brands, among them Wellcraft, FourWinns, Champion, Marquis, Fincraft, Larson and Carver.
More at www.genmar.com
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