An update on the Genmar bankruptcy proceedings:
Last week, Genmar filed a motion requesting that Ranger Boats be allowed to pay about $1 million in certain pre-petition costs related to the marketing and promotion of Ranger boats. Specifically, Genmar sought permission to pay accumulated costs related to sportswear for Ranger buyers, sponsorship monies for pro-angler staff, plus award boats for tournament sponsorship.
Textron, a Genmar creditor, filed a limited objection to the motion last Friday, which means the motion and the limited objection will be heard in court today.
In its objection, Textron stated it could be owed as much as $24 million by Genmar, and "In Textron's judgment, consideration of the Prepetition Promotional Claims should be delayed until the Debtors can demonstrate the likelihood of a successful reorganization, including the payment of a meaningful dividend to unsecured creditors."
Textron also stated in the limited objection: "In principle, Textron does not quarrel with the Debtors' assessment as to the importance of preserving the value of the Ranger Boat franchise. Laudable as the Debtors' stated goal may be, Textron is growing increasingly concerned about the mounting level of pre-petition claims that have received preferential treatment by the Debtors, now approaching $9 million in the aggregate."
In simpler language, Textron previously extended credit to Genmar (and thus Ranger) to finance its dealer floorplans. And although it's in Textron's interest to see a strong Genmar emerge from bankruptcy, Textron feels Genmar has "demonstrated little, if any, discernable progress toward development of a business plan that offers promise for a successful reorganization," and thus wants payment before allowing Ranger to pay the $1 million in existing promotional claims.
The limited objection, and the original motion, signify the bankruptcy's most immediate effect on professional and amateur bass fishing, as the embattled monies are those tied directly to the sport.
More will be published on the proceedings after today's hearing.
