Yesterday Genmar Holdings Inc. announced that it acquired the debt of Champion Boats Inc. Yamaha Motor Corp. USA also is involved in the deal.

By now all BassFans who own Champions, and many of those who don't, are aware that Champion has had financial difficulties. Its manufacturing facilities in Mountain Home, Ark. have been closed for months, and its pro staff -- including California's Skeet Reese and New Jersey's Pete Gluszek -- were released last year.

Most BassFans also are aware that Genmar is owned by Irwin Jacobs. Through Genmar, the world's largest recreational boat company, Jacobs now owns the Ranger, Stratos and Javelin bass boat brands. He is also the owner of FLW Outdoors, which runs the FLW, EverStart and BFL bass fishing tours.

The Deal

Genmar stated that it reached an agreement with St. Louis, Mo.'s Deutsche Financial Services Corp. (DFS) -- Champion's main creditor -- "to acquire complete ownership in all senior secured loans" made by DFS to Champion. Terms of the agreement were not disclosed.

In essence, the action shows Genmar's intent to acquire Champion.

Jacobs stated: "Champion has historically had a strong product offering. At this time, it is premature to predict the length of time the bankruptcy process will take. However, it is Genmar's intention to take control and ownership of all of Champion's and Back Country's (another Champion brand) assets through the bankruptcy courts, and to preserve the Champion boat brands.

"As always, once we are in a position, Genmar will be as timely and straightforward as possible in communicating with Champion's dealers, suppliers and customers," he added. "We appreciate the fact that everyone associated directly or indirectly with Champion is very interested as to the future of Champion."

Phil Dyskow, group president of Yamaha Marine, stated: "We are very much in full support of Genmar's efforts to preserve Champion. We believe that Genmar will bring the best possible solution to the Champion business, and that Genmar clearly has the best experience and capability to deal with all the issues facing Champion and its various constituencies."

Champion's Problems

On Nov. 7, 2001, DFS and various other creditors filed what's called an "involuntary petition for Chapter 11 bankruptcy." According to the Baxter Bulletin, a Mountain Home newspaper, the other creditors included Composites One LLC of Arlington Heights, Ill. and 10 Champion employees.

DFS claims Champion owes it nearly $5.6 million in loans, which presumably is in the neighborhood of what Genmar paid.

Champion's financial problems came to light in September, when employees discovered that Champion had not forwarded money withheld from paychecks for health insurance to the health insurance carrier, the Baxter Bulletin stated.

The Arkansas Department of Insurance Fraud subsequently investigated, as did the federal Department of Labor when Champion failed to issue paychecks to employees over two consecutive pay periods.

2nd Bankruptcy Buy for Genmar

If or when Genmar's acquisition of Champion is successful, it will mark Genmar's second recent bankruptcy acquisition of a bass boat brand.

In March 2001, Genmar acquired the boat assets of Outboard Marine Corp. -- better known as OMC -- though a process approved by an Illinois bankruptcy court. Seven boat brands were included in the deal, among them Stratos and Javelin.

Bombardier Motor Corp. acquired OMC's outboard motor assets, meaning the Evinrude and Johnson brands. The total value of the joint bid was $95 million.

With that action, Genmar became the world's largest recreational boat builder.

What do you think about Irwin Jacobs adding Champion to his stable of bass boat brands? Click here to let us know.