Fountain Powerboats Allowed to Reorganize

DJ · #1 10-15-2009, 02:15 PM

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A bankruptcy judge ruled Friday that Fountain Powerboats will be allowed to reorganize rather than be sold to a California investment group.

The ruling was a major victory for Reggie Fountain, founder and CEO of the boat company based in North Carolina. Fountain spent more than an hour testifying Friday in a U.S. District Bankruptcy Court in Wilson, N.C. Oxford Investment Group had acquired the note from Regions Bank for $6.75 million and opposed the reorganization, which the judge ultimately agreed to. Regions Bank was owed more than $19 million when Fountain Powerboats filed for bankruptcy in August.

Liberty Associates, which acquired Donzi Marine and Pro-Line brands earlier this year, stepped forward in late September and said it would provide funding for Fountain Powerboats to continue building boats and pay for the reorganization plan. “We’re going to reorganize and move ahead with our new partners Liberty Associates,” Fountain said in a brief phone interview on Friday. “We look forward to building boats for the next 30 years.”

The judge also ruled that Fountain Powerboats must pay $29,375 a month toward the note held by Oxford Investment Group. Fountain said the amount is “substantially” lower than what the company was previously paying.

Fountain, who will continue to serve as president and CEO of the company he founded in 1979, said the company plans to get back to building its cruisers, center-console and high-performance boats. That includes the Fountain and Baja brands. At its peak in 2006, the company had more than 450 employees. Fountain testified Friday that it’s down to less than 30 workers.

“We can’t wait to get back and start building,” he said.—Gregg Mansfield

Powerboat Magazine