Ch 11 and what it really means

[Smitty]

From the article on Bass Fan it appears that Genmar filed in order to prevent the banks from forcing dealers/ manufacturer's to liquidate inventory to repay flooring loans. (educated guess on my part). I use to trade distressed debt (bankrupt or close to bankrupt companys) and often times CH 11 results in a stronger company after the restructuring. Without having access to the actual senior and subordinated debt levels it is difficult to guess what the likely outcomes from the filing are but if the stock is tightly held (Jacobs and a few others probably own the vast majority of stock) the filing was probably done in order to protect some of that value. The reason I think this is the 40 million recently infused by Jacobs and " a few others". This filing will likely result in the senior lenders taking a "hair cut" on the principle amount of money owed them as well as a restructured term as far as rates an even bigger "hair cut" for subordinated lenders probably including a debt for equity swap as long as the judge determines that the ongoing value of the entity is worth more than a liquidation. Knowing Jacobs past record as an investor, I seriously doubt Genmar is worth more liquidated than on going. That being said, some brands could be sold/ liquidated or just discontinued in order to maximize operating capital and profitability.
The bottom line, I really doubt that you have anything to worry about when it comes to warranty work.
Smitty

[DL]

We can now put this one to bed. Thanks Rich.

PS I'll be headin your way in two weeks, get those clear lake fish ready, ill be driving all night and putting in as soon as I get into town...

[Robert F]

The million dollar question is do they sell the strong assets (Ranger) or the weak ones. I left Champion and moved to Ranger because the volatility lowered the resale value of Champion. I pay cash so I am 100 percent invested in my boat. I hope that if they do sell Ranger it is back to the Wood family. I think they will take care of Genmar Rangers unlike Genmar did with preGenmar Champions

[FISH2WIN55]

Genmar is going to keep the companies that make money for them (Ranger). There is no worries about Ranger going under or warranties not being upheld. Everyone who is thonking about buying a Ranger jump in. I would buy a Ranger right now without hesitation if I was in the market for a new boat.

[Robert F]

Genmar may not have a choice. The Court may decide it is the best asset to liquidate to pay the creditors. I was a creditor once in a bankruptcy. One thing I learned is secured credit, as mine was, is a very strong position and the court will not put up with companies trying to circumvent a security instrument. I might consider buying a Genmar product that is financed to the hilt but I would be very careful in putting a bunch of my money in the bucket.

[JamesH]

Now this is an intelligent thread.... it's about time.... I agree with most of what has already been said, Genmar will be allowed to cut the fat and sell or liquidate unprofitable sections of the business and a stronger company will emerge.

Smitty, thanks for you knowledgable input on the subject, it's great to hear from people who have actual insight to go with their opinions!

Everybody take a deep breath, it's going to be ok.....

James

[Guy Kelley]

And I should really care, becauseeee!!??

If i had a newer Ranger I might but mine is over 10 years old.

But on the other hand if mine was new or I was considering buying a new one should I be nervous ?

[Robert F]

But on the other hand if mine was new or I was considering buying a new one should I be nervous ?

IMO yes. When Champion BKed a few years back there was a time when you could not get any warranty work done. I do not think that was an 11 but if things do not go Genmars way with the reorganization they could go liquidation. Some or all brands will be sold if they are forced to go that route. The new company owners will not have any duty to honor Genmar's warranty issues.

[JamesH]

IMO NO..... Why worry about things that don't effect you?

James

[D]

I hear the Chinese are looking to invest in the boating market to promote their recent purchase of Hummer.... maybe ranger is in the future can you imagine, think about it, take a look around and see whats happening!

[Robert F]

On a serious side that is exactly what somebody needs to worry about. If something like that happens a new company will have no responsibility to a Genmar built boat owner. Genmar bought Ranger, Champion, Stratos, etc. they may sell them just as easy as they bought them. Companies do not file BK because everything is OK. They made a financial commitment and can not make their payments. Simple fact.