With a new owner, Fountain exits Chapter 11
Posted on February 04, 2010 ShareThis Fountain Powerboat Industries has emerged from Chapter 11 bankruptcy protection, company founder Reggie Fountain told Soundings Trade Only this morning.
The privately-held company is now owned by Liberty Associates, which also is the majority shareholder of Donzi Marine and Pro-Line Boats.
Fountain, who filed Aug. 24, 2009 for bankruptcy, said he's happy with the outcome of the case.
"We've been pretty fortunate all along," he said. "I think the judge noted that we had one of the lowest groups of payables to our vendors that he'd seen in a bankruptcy."
Fountain will stay on as president and CEO of the company and says he will buy back into the company, though not at the 51 percent of shares he once owned.
California-based FB Investments had attempted to buy the company, after it purchased the note from Regions Bank. After a court fight, however, the company recently approved Fountain's reorganization plan.
Fountain said Liberty Associates will pay FB Investments the money it is owed by mid-March, if not sooner.
There are currently about 120 employees at Fountain. That number had fallen as low as 20 last fall, Fountain said, adding he hopes to bring more employees back as the economy allows.
Several years ago, Fountain employed 350 people in its North Carolina facility.
"The economy is going to determine [when we can bring more employees back]," he said. "We can't force that, wouldn't want to force that after getting out of Chapter 11."
Fountain also noted the company is much leaner and running with less overhead than it once had - as much as $1 million a month less.
Back in 2006, he noted, Baja and Fountain combined did $160 million in business. He hopes to be back to at least half of that amount in three to five years.
"I'll be tickled if that happens," Fountain said.
For more on this story, see the March issue of Soundings Trade Only.
— Beth Rosenberg
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