Genmar Holdings, Inc. announced that it has filed for Chapter 11 reorganization protection in the U.S. Bankruptcy Court, according to a press release issued on June 2, 2009.
“I have been in the boating industry for more than 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,” said Irwin Jacobs, chairman and CEO of Genmar. “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.”
“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,” added Jacobs. “Unfortunately, I didn't have the necessary time to complete any alternative financing acceptable to the banks.”
According to Genmar, Jacobs explained the company has received a commitment for Debtor-in-Possession (DIP) financing proposal from the Wells Fargo and Fifth Third banks, which will be submitted for approval to the bankruptcy court in the first bankruptcy hearing scheduled within the next few days.
Jacob explained in the news release that Genmar believes it will have access to sufficient cash and has current assets available to support its ongoing businesses to service and build dealer boat orders and pay its vendor suppliers on future purchases promptly. Genmar currently has more than $100 million in current assets, substantial additional fixed assets and intangible assets that the company believes will allow it “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.”
Genmar will also be requesting the bankruptcy court for approval to allow the company to pay appropriate dealer warranty and rebate claims.
“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.”
The release also stated that the company will be submitting an overall reorganization plan for approval to the bankruptcy court as soon as possible. The plan will include the necessary details for all interested parties to better understand Genmar's short and long-term plans, as well as objectives in ultimately successfully exiting the Chapter 11 proceedings.