Genmar gets interim approval for debtor-in-possession financing

MINNEAPOLIS – Genmar's plan to obtain a debtor-in-possession loan and reorganize through bankruptcy moved forward Thursday, when the judge in Genmar's bankruptcy trial approved DIP financing on an interim basis, pending a final hearing on June 25.

The judge also granted motions that will allow Genmar to pay past and future employee compensation and benefit expenses as well as to honor past and ongoing warranty and rebate claims.

Genmar CEO Irwin Jacobs said in a statement released last night that the ruling was evidence of Genmar's "intention to move successfully through the Chapter 11 proceedings and exit as a stable and strong company."

Genmar Holdings and more than 20 related companies — many, but not all, of Genmar's subsidiaries — filed for bankruptcy on Monday, and Thursday represented the first hearing in the case.

In court documents filed prior to the hearing, the company listed assets of $237.5 million and liabilities of $216.5 million, plus intangible assets including "trade names associated with (Genmar's) brands as well as the established distribution networks that have been developed over many years."

Court documents also showed Genmar is expecting revenues of about $460 million by the end of its fiscal year June 30 — about half what it made a year ago.

Genmar's two main creditors are Wells Fargo and Fifth Third banks, and as of June 1, the outstanding amount of the company's obligations to the lenders stood at about $70.8 million, according to court documents.

In addition, Genmar filed a list of unsecured creditors that includes many of the big names in the marine industry, including Mercury Marine, Volvo Penta and Bombardier Motor Corp.

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