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Genmar buoyed by secretive buyer
by Ben Fidler
Updated 03:10 PM, Nov-04-2009 ET
With its hopes for a reorganization no longer feasible, bankrupt boat maker Genmar Holdings Inc. is now looking to find a buyer to salvage its business.
The company, owned by Minnesota businessman Irwin Jacobs, is preparing for a Nov. 16 hearing during which it will ask Judge Dennis O'Brien of the U.S. Bankruptcy Court for the District of Minnesota in Minneapolis to reimburse an unnamed potential buyer for its due diligence expenses.
The process itself is somewhat secretive. In its Oct. 30 bidding procedures motion, Genmar said it has identified a "potential stalking horse" that, to date, has posted the best offer "from the standpoint of cash consideration and possibility of consummation."
Genmar explained that it was hiding the identity of the stalking-horse bidder "to preserve the integrity of the process," and expects to file a sale motion revealing the name of the bidder within 20 days of winning bidding procedures approval.
Jacobs, meanwhile, has said in a published report that he plans to bid on the company. It is unclear, however, whether or not he is the potential stalking-horse bidder.
Genmar had originally planned to reorganize while in Chapter 11. Jacobs himself sent out a letter to the company's dealers on Aug. 11 claiming that Genmar aimed to file its plan ahead of a Sept. 29 deadline. At the time, Genmar was selling certain noncore assets to reduce its loan balances so it could have a chance to refinance its senior debt and finalize a plan. In the meantime, however, Genmar had already hired Houlihan, Lokey, Howard & Zukin Inc. as its investment bank. Beginning in August, Houlihan contacted about 200 potential buyers, even as the company had been hoping to piece together a restructuring proposal.
Though Genmar didn't explain why it moved from reorganization to sale in court papers, Jacobs said in a published report that he couldn't get the cooperation of everybody necessary to do it.
Minneapolis-based Genmar filed for Chapter 11 on June 1, asserting the economic downturn and its significant impact on consumer spending had crippled the boat industry. The frozen credit markets left Genmar unable to find new financing sources for itself and its dealers. The debtor felt the only financing it could obtain would be through a debtor-in-possession loan.
Founded in 1978 when Jacobs bought Lund Boat Co., Genmar has expanded into a company selling 13 brands of boats, from small powerboats to luxury yachts, and touts itself as the "world's premier builder of recreational boats." Its brands include Carver, Champion, Four Winns, Glastron, Ranger, Seaswirl and Wellcraft.
Genmar, which has more than 1,000 independent dealers in all 50 states, is the second-largest manufacturer and distributor of fiberglass powerboats in the world, having sold more than 24,000 of its products during the fiscal year ended June 30, 2008.
The company listed $237.5 million in assets and $216.5 million in debts in its petition.
James Baillie, Clinton Cutler, Douglas Kassebaum and Ryan Murphy are debtor counsel at Fredrickson & Byron PA in Minneapolis.
by Ben Fidler
Updated 03:10 PM, Nov-04-2009 ET
With its hopes for a reorganization no longer feasible, bankrupt boat maker Genmar Holdings Inc. is now looking to find a buyer to salvage its business.
The company, owned by Minnesota businessman Irwin Jacobs, is preparing for a Nov. 16 hearing during which it will ask Judge Dennis O'Brien of the U.S. Bankruptcy Court for the District of Minnesota in Minneapolis to reimburse an unnamed potential buyer for its due diligence expenses.
The process itself is somewhat secretive. In its Oct. 30 bidding procedures motion, Genmar said it has identified a "potential stalking horse" that, to date, has posted the best offer "from the standpoint of cash consideration and possibility of consummation."
Genmar explained that it was hiding the identity of the stalking-horse bidder "to preserve the integrity of the process," and expects to file a sale motion revealing the name of the bidder within 20 days of winning bidding procedures approval.
Jacobs, meanwhile, has said in a published report that he plans to bid on the company. It is unclear, however, whether or not he is the potential stalking-horse bidder.
Genmar had originally planned to reorganize while in Chapter 11. Jacobs himself sent out a letter to the company's dealers on Aug. 11 claiming that Genmar aimed to file its plan ahead of a Sept. 29 deadline. At the time, Genmar was selling certain noncore assets to reduce its loan balances so it could have a chance to refinance its senior debt and finalize a plan. In the meantime, however, Genmar had already hired Houlihan, Lokey, Howard & Zukin Inc. as its investment bank. Beginning in August, Houlihan contacted about 200 potential buyers, even as the company had been hoping to piece together a restructuring proposal.
Though Genmar didn't explain why it moved from reorganization to sale in court papers, Jacobs said in a published report that he couldn't get the cooperation of everybody necessary to do it.
Minneapolis-based Genmar filed for Chapter 11 on June 1, asserting the economic downturn and its significant impact on consumer spending had crippled the boat industry. The frozen credit markets left Genmar unable to find new financing sources for itself and its dealers. The debtor felt the only financing it could obtain would be through a debtor-in-possession loan.
Founded in 1978 when Jacobs bought Lund Boat Co., Genmar has expanded into a company selling 13 brands of boats, from small powerboats to luxury yachts, and touts itself as the "world's premier builder of recreational boats." Its brands include Carver, Champion, Four Winns, Glastron, Ranger, Seaswirl and Wellcraft.
Genmar, which has more than 1,000 independent dealers in all 50 states, is the second-largest manufacturer and distributor of fiberglass powerboats in the world, having sold more than 24,000 of its products during the fiscal year ended June 30, 2008.
The company listed $237.5 million in assets and $216.5 million in debts in its petition.
James Baillie, Clinton Cutler, Douglas Kassebaum and Ryan Murphy are debtor counsel at Fredrickson & Byron PA in Minneapolis.
