Fountain Files Chapter 11 Bankruptcy
08-24-2009, 10:37 PM
#51
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http://www.ibinews.com/ibinews/newsd...34ibinews.html
The court documents said Fountain's current operations would not be sufficient enough to support a traditional reorganization. Fountain's filings said "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."
Apears they are going to attempt to substantially reduce production. My heart goes out to the families involved. I like fountains, I hope they can substantially improve build quality as a result.
The court documents said Fountain's current operations would not be sufficient enough to support a traditional reorganization. Fountain's filings said "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."
Apears they are going to attempt to substantially reduce production. My heart goes out to the families involved. I like fountains, I hope they can substantially improve build quality as a result.
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.
If Fountain is selling the facilities and tooling, how do they intend to continue operations?
08-24-2009, 10:50 PM
#52
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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.
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.
If Fountain is selling the facilities and tooling, how do they intend to continue operations?
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.
If Fountain is selling the facilities and tooling, how do they intend to continue operations?
I would have thought Brunswick, but man, they have more problems than Fountain did. Kinda makes people wonder why CEO's sign off on what was pretty easy to dicern garbage.
08-24-2009, 10:53 PM
#53
And right there is where you got it wrong. When the govt forces you to make those loans, you arent doing it out of greed. You are doing it to stay in business. Its just too bad that those loans were packaged, resold, and connected to lots of good investments....but thats the way it works. Get the govt out of social engineering and wellfare. And yes, lending is hard right now.
Its all pretty sad
08-24-2009, 11:14 PM
#54
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As a large Dealer Like Shogren I agree with him they will pull out if we were worried we would be on the next flight to sit down with Reggie in person.
Legend Marine Group
Legend Marine Group
08-25-2009, 12:21 AM
#56
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Tblrklaknemo,
The government didn't "force" anyone to make or take those home loans. That's incorrect. Frank and Dodd, Democrats if it makes you feel better, were the geniuses behind the sub-prime loan market. But no one, lender or borrower, was forced into anything. A lot of lenders cashed in big on that junk. A lot of of homeowners were able to own (and now lose) property on that junk. In the end it was ... junk. But it was not mandated.
To the issue of Fountain (I also posted this on another board):
The notion that Baja struggled because Reggie tried to "Fountainize" the Baja line is rubbish. It cannot be backed by fact. Here's what can:
Baja dealers had huge new-boat inventory, moments before a huge recession. And the pre-owned stuff? Off the hook.
I am not pointing fingers in any way at anyone at Baja. But even in a robust economy, it would have been tough for Baja dealers to clear all their inventory in 2007 and 2008.
Because Reggie Fountain is something of a public figure, it's good sport to make fun of his personal style and all that. Fair enough ... you court the public, you take what you get from it. But regardless of what you think of Reggie or his product (Was it innovative or just good marketing?) the man has done as much, no, screw it, much more, than anyone, even Don Aronow to promote the high-performance boat industry.
Only an idiot would count him out.
The government didn't "force" anyone to make or take those home loans. That's incorrect. Frank and Dodd, Democrats if it makes you feel better, were the geniuses behind the sub-prime loan market. But no one, lender or borrower, was forced into anything. A lot of lenders cashed in big on that junk. A lot of of homeowners were able to own (and now lose) property on that junk. In the end it was ... junk. But it was not mandated.
To the issue of Fountain (I also posted this on another board):
The notion that Baja struggled because Reggie tried to "Fountainize" the Baja line is rubbish. It cannot be backed by fact. Here's what can:
Baja dealers had huge new-boat inventory, moments before a huge recession. And the pre-owned stuff? Off the hook.
I am not pointing fingers in any way at anyone at Baja. But even in a robust economy, it would have been tough for Baja dealers to clear all their inventory in 2007 and 2008.
Because Reggie Fountain is something of a public figure, it's good sport to make fun of his personal style and all that. Fair enough ... you court the public, you take what you get from it. But regardless of what you think of Reggie or his product (Was it innovative or just good marketing?) the man has done as much, no, screw it, much more, than anyone, even Don Aronow to promote the high-performance boat industry.
Only an idiot would count him out.
08-25-2009, 03:42 AM
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I realize that all you idiots who voted for Bush even though he is clearly the worst President in US history have somehow forgotten that this entire economic meltdown happened on his idiotic watch.
But come on, do you have to keep proving to everyone else how retarded you are? Just keep your past mistakes to yourselves, move on. Mistakes happen. You made a REALLY BIG one that all these boat companies are paying for, but you made it. Move on. Sure, the lives and fortunes of many people were destroyed by his idiotic policies (spend more, tax less). But in the long run, we will all get over that disaster. Might take awhile, and a lot more people losing everything they ever worked for, but we'll get over it.
But really, please stop embarassing yourselves. Bush did this. Obama might barely be able to get us out of this mess, he's doing the right stuff so far. But Bush broke this economy. Don't be an ass.
But come on, do you have to keep proving to everyone else how retarded you are? Just keep your past mistakes to yourselves, move on. Mistakes happen. You made a REALLY BIG one that all these boat companies are paying for, but you made it. Move on. Sure, the lives and fortunes of many people were destroyed by his idiotic policies (spend more, tax less). But in the long run, we will all get over that disaster. Might take awhile, and a lot more people losing everything they ever worked for, but we'll get over it.
But really, please stop embarassing yourselves. Bush did this. Obama might barely be able to get us out of this mess, he's doing the right stuff so far. But Bush broke this economy. Don't be an ass.
08-25-2009, 03:52 AM
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You are correct, however, after taking a quick look at their financials, they are bleeding cash and have maxed out debt. The companies "assets" are tied to making good on the loans to acquire their facilities/equipment, which they have now admitted they can't pay by filing ch 11. With a trustee appointed by the court, there will have to be either a viable change in business plans, an acquisition, liquidation, or combination of those 3. In todays economy, no business in its right mind would buy a company and its assets while it is unprofitable, especially when they already went into ch 11. Some larger brand will wait for it to fail to emerge from ch 11 and then will buy the name on the cheap when the debt and assets (inventory, as all cash will be gone) are gone to the lenders. I think it's terrible for the employees and dealers and all related to the situation, but i think Fountain as we now know it is done.
I think its amazing that a company that sold a quarter billion dollars in boats over the past 4 challenging years is on the block for a handful of millions -- and they for certain won't get that.
Its funny how bad political policy -- policies that clearly make no sense (e.g., tax less, spend more, and cut personal taxes of high earners so its less taxing to such all the capital out of a company than to leave it in the company) come back and destroy those that boost such idiocy. Sorry, Reggie, but being a Republican can't save you from the parties idiocy. Everyone pays for those self-delusions.
Responsibility is the only way. Funny how the party that claims that everyone needs to be responsible for themselves is the least responsible with political power. Yup, liars never prosper.
How did that bunch of obscene liars ever claim moral high ground?
08-25-2009, 03:59 AM
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"For the three and six months ended December 31, 2008, the Company’s other comprehensive losses were $412,678 and $421,322, respectively. These amounts, together with net income or loss during the three and six months ended December 31, 2008 result in total comprehensive losses of $3,591,263 and $3,518,138, respectively. For the three and six months ended December 31, 2007, the Company’s other comprehensive losses were $161,045 and $318,910, respectively. These amounts, together with net income or loss during the three and six months ended December 31, 2007 result in total comprehensive losses of $926,100 and $810,586, respectively."
That is straight from their SEC filing 10-Q.
In a nutshell...they're done unless someone buys the name (they will, but they'll let the bank eat the assets and debt first). They're bleeding cash (appx 3 mil) and have over 18 mil in long term debt ($ they took a long time ago) coming due. the most interesting thing in there is the "general and administative expenses" payout about 800-900k per quarter...a general indicator that would be an easy way to pay yourself without calling it salary or bonus (but thats just speculation on my part)
That is straight from their SEC filing 10-Q.
In a nutshell...they're done unless someone buys the name (they will, but they'll let the bank eat the assets and debt first). They're bleeding cash (appx 3 mil) and have over 18 mil in long term debt ($ they took a long time ago) coming due. the most interesting thing in there is the "general and administative expenses" payout about 800-900k per quarter...a general indicator that would be an easy way to pay yourself without calling it salary or bonus (but thats just speculation on my part)
The thing that has always struck me as being odd, very odd, about FPB financials is: Why are their cost of sales so high? Those numbers simply make no sense to me, never have. They seem about TWICE what a well run company should be. What is buried in "cost of goods sold?"
While the company has a lot of debt, their debt service is low (low interest): less than $1M against costs of goods sold of maybe $50M or $60M. And these very high COGS have been there forever (15 years of SEC filings). Way over industry standard costs. Its clearly not the debt load that killed Fountain Powerboats. So shedding the debt is not the issue.
Where does all the money go? Is it the much too large plant?
They always call out racing, fishing tournaments, and airplanes. So its certainly not the obvious stuff (adds up to maybe $3M per year, 5% of those COGS).
Bizarre...
08-25-2009, 04:10 AM
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I am in discussions with a few billionaires (members of my yacht club, and my best man) about if Fountain could be a good investment. The very rich were not hurt in this downturn: they knew the "tax less, spend more, send trillions to the middle east" Bush concept was a short term play, and they played it so: they pulled out 12 months or less before Bush was done. Its all the poor suckers (the common rich) like you and be who kept their money in 401Ks, commercial real estate, and/or private corporate holdings "for the long term" that took it in the net worth. We'll see who ends up with Fountain, I expect it will be one of my buddies.
