Fountain Powerboats files for Chapter 11 bankruptcy protection

[Freeballin]

Fountain Powerboats yesterday filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court in the Eastern District of North Carolina. According to court documents, Fountain will attempt to sell its assets, including the facilities and tooling in North Carolina, as well as brand names and unsold inventory for the Fountain and Baja brands. It expects the assets to sell for between US$6m and US$8m.

Fountain said it owes its largest creditor, Regions Bank, US$19.6m. About US$4.3m of the total is for floor-plan loans, while the other US$15.3m was for term loans and a revolver loan. The company reported a loss of US$2.2m in fiscal 2008, and US$8.1m in fiscal 2009.

The company's two biggest shareholders are Cede and Company which owns about 2.2m common shares, and Chairman and CEO Reggie Fountain, who owns about 2.1m common shares.

The company intends to continue operations, according to the court documents. Reggie Fountain told local news sources that only about 10 to 12 workers will remain on the site in the coming weeks. He also expects the backing of new private investors to be in place by the end of the month.

The court documents said Fountain's current operations would not be sufficient enough to support a traditional reorganization. Fountain's filings sai d "creditors would benefit from the sale of the Sale Assets to a third party, who would then be in a position to infuse working capital, make the necessary capital expenditures and maintain operations for existing and prospective customers, vendors and employees. The Debtors also believe that a forced liquidation of the Sale Assets by a Chapter 7 trustee or by Regions Bank exercising its state law remedies would result in no payment to unsecured creditors."



NJ Performance Powerboat Club
www.njppc.com

[hubris 1]

Give it another year.........You need to see blood in the street, when it makes it to the inlet, make an offer. Im 6 months to a year away. This year, Im gonna put an addition on my shore home. Always looking. Oh yea, and listening to Dino.

[Hatterized]

Reggie.....thank ya for the fast times....the "Cafe Racer" aged my dad at least 20 years when we would take it out without him....and sure enough both Reggie Fountain (Fountain) and Don Aranow (Cigarette) both deserve plaques in Annapolis' Ego Alley.....dem where the days..gas was cheap.....dump in some octane boost.....HAMMER DOWN

[LuckyLady]

Judge sets hearing on sale of Fountain assets
Posted on August 26, 2009

A bankruptcy court judge Tuesday approved an expedited hearing on several motions filed by Fountain Powerboat Industries, including one approving the sale of substantially all of the company's assets.

Fountain, in its filings, said the sale motion was necessary for its reorganization plan. The company filed Monday for Chapter 11.

"If the sale motion is not approved or a sale is not confirmed and consummated, the debtors may pursue a more traditional plan of reorganization or a plan of orderly liquidation," Fountain said.

The company 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.

In other news, a meeting of creditors in the case is set for Sept. 28 in Wilson, N.C. The deadline to file a proof of claim for all creditors, except a government unit, is Dec. 28.

Government units have until Feb. 20, 2010, to file claims.