Genmar Holdings files Chapter 11 bankruptcy amid economic downturn

By Caroline Salls

Pittsburgh, June 2 - Genmar Holdings, Inc. filed for Chapter 11 bankruptcy Monday in the U.S. Bankruptcy Court for the District of Minnesota.

Genmar Holdings was formed in 1994 to combine the operations of IJ Holdings Corp. and Miramar Marine Corp., each of which was under the control of investor groups led by Irwin L. Jacobs.

According to court documents, the marine industry began to be negatively impacted by a number of macro-economic factors and other factors unique to the industry beginning in the fall of 2007.

Although the company immediately made operational changes and infused additional equity, Genmar said conditions continued to erode as overall economic concerns lead to falling customer confidence and declines in retail sales.

In addition, the company said previously available financing sources became more restrictive and, in some cases, unavailable.

In connection with the bankruptcy filing, Genmar has obtained a commitment for $15 million in debtor-in-possession financing from Wells Fargo Bank, NA and Fifth Third Bank, NA.

The DIP facility will mature on the earliest of Sept. 1, July 10 if the company has not filed a restructuring plan by then and the effective date of a plan of reorganization.

Interest will be Prime rate plus 800 basis points.

Genmar said it is still negotiating the terms of the DIP facility, and the terms could improve.

The company's bankruptcy petition said it has $10 million to $50 million in assets and $100 million to $500 million in debt.

Genmar is a Minneapolis-based boat manufacturer. The Chapter 11 case number is 09-43537.

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