Documents detail Fountain's assets

[jeffbare]

Documents detail Fountain's assets
Posted on August 25, 2009
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While court documents show Fountain Powerboat Industries has $3 in assets, Fountain Powerboats, Baja by Fountain and Fountain Dealers' Factory Superstore, list substantially more assets than their parent company.

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North Carolina-based Fountain Powerboat Industries filed for Chapter 11 bankruptcy protection Monday in U.S. Bankruptcy Court in the Eastern District of North Carolina.

Fountain Powerboats lists nearly $18.4 million in assets, Baja by Fountain lists $3.7 million in assets and Fountain Dealers' Factory Superstore lists $3.2 million in assets.

Fountain Powerboat Industries' liabilities are listed as more than $19.6 million, which it owes to Regions Bank. The amounts are broken down as $13.2 million as a term loan to Fountain Powerboats; $4.3 million as floorplan to Fountain Dealer's Factory Superstore and $2 million as revolver to Fountain Powerboats.

Fountain Powerboats lists $50 million in liabilities. Creditors holding the 20 largest unsecured claims include GE Commercial Distribution Finance Corp., Key Bank and Textron.

Baja by Fountain lists $4 million in liabilities. Baja Marine Corp. is the only listed creditor holding a secured claim. Fountain Powerboats, under its Fountain by Baja subsidiary, borrowed $4 million from Baja Marine Corp., a former Brunswick subsidiary, to buy assets of the boat company.

No payment is due on the note until June 2020, and at that time the note will be cancelled by Brunswick, provided Fountain has not "defaulted on its obligations to the Brunswick Corp. on either of the two engine supply agreements."

Fountain Dealers' Factory Superstore lists nearly $5 million in liabilities, with Regions Bank listed as the only creditor holding a secured claim.

The company, in its filings, also is asking the court for permission to sell "substantially all" of its tangible and intangible assets, including the land and buildings it owns in North Carolina, all manufacturing equipment, all inventory, all contracts with customers and all records relating to the business.

The sale of these assets could bring in $6 million to $8 million or more, Fountain said.

"The debtors seek to consummate an asset sale promptly in order to maximize the value of sale assets for the benefit of creditors," Fountain said in court documents. "Although debtors intend to continue operations at a reduced level post-petition as a debtor-in-possession, such operations are not currently sufficient to support a traditional reorganization absent additional capital infusions and a corresponding increase in net revenues would be expected, but cannot be guaranteed."

Fountain added that a forced liquidation of the assets by a Chapter 7 trustee would result in no payments to unsecured creditors.

Past financial troubles

Fountain had been struggling financially, with a drop in earnings as boat sales fell.

In February, Fountain started trading on Pink Sheets under the symbol FPWB, after being notified its stock would be suspended from trading on NYSE Alternext US, the successor to the American Stock Exchange.

"In light of current economic conditions in general and, in particular, conditions within the marine industry, the company does not believe it can regain compliance with the Exchange's continued listing standards in the near term," Fountain stated at the time of the announcement.

In suspending Fountain, the exchange noted that the company had "sustained losses that were so substantial in relation to its overall operations or its existing financial resources, or its financial condition had become so impaired" that it was questionable whether the company would be able to continue operations.

According to data on Pink Sheets, Fountain's 52-week high and low are $1.72 and 4 cents respectively.

— Beth Rosenberg

[Ratickle]

Now that makes the story a lot different.......

[Ted]

Somebody could come out with a real nice boat company and very few"obligations" when this is all over.....

[Dude! Sweet!]

Somebody could come out with a real nice boat company and very few"obligations" when this is all over.....

Yah, like their creditors...