Luhrs Marine Group Announces Commencement of Proceedings Under Chapter 11 of the Bankruptcy Code
ALACHUA, FLORIDA – APRIL 30 – Morgan Industries Corporation, the parent company of Hunter Marine Corporation and the Luhrs Marine Group family of boat manufacturing businesses, announced today that it and its U.S. subsidiaries (the “Company”) filed voluntary petitions for chapter 11 business reorganization in the United States Bankruptcy Court for the District of New Jersey. The Company is a global leader in the production of recreational powerboats and sailboats under the iconic brand names of Hunter Marine, Silverton, Ovation, Luhrs, and Mainship. The business reorganization is intended to bolster liquidity, fairly resolve legacy liabilities, and enable the company to focus on its most valuable business lines and assets.
In conjunction with the filing, the Company filed first day motions that will allow it to continue to manage operations in the ordinary course. The Company has obtained a fully-committed, post-petition debtor-in-possession credit facility from Bank of America to enhance liquidity and working capital.
“The business reorganization is intended to bolster liquidity, fairly resolve legacy liabilities and enable the company to focus on its most valuable business lines and assets,” according to a statement released by its advisers. “In conjunction with the filing, the company filed first day motions that will allow it to continue to manage operations in the ordinary course. The company has obtained a fully committed, post-petition debtor-in-possession credit facility from Bank of America to enhance liquidity and working capital.
“The company will evaluate options ranging from a standalone plan of reorganization or a capital infusion through a plan of reorganization or funding sponsor or acquirer,” the statement said.
The company is being advised by Robert Hirsh and George Angelich of Arent Fox LLP as bankruptcy general counsel; Capstone Advisory Group LLC as financial advisers; Katz, Kane & Co. as investment bankers; and Donlin Recano & Co. Inc. as claims agent.
Hunter Marine president and chief restructuring officer John Peterson told Soundings Trade Only on Monday that the powerboat operations — Silverton, Luhrs and Mainship — ceased operations in January. Florida-based Hunter Marine, the sailboat builder, has never shut down production, he said, and continues to be up and running.
As for Hunter, Peterson said, “Our orders are fairly strong right now. I think things are going fairly well [for Hunter]. We could certainly pay for ourselves on an ongoing basis, but we could not pay for the whole group on an ongoing basis.”
There are “numerous” entities interested in buying Hunter and other assets, Peterson added.
Allan Mestel at Hunter dealer, True North Yachts in Toronto, shared this information regarding the Hunter restructuring initiative, “True North Yachts has been aware for several weeks that Hunter Marine was in negotiation with several entities who expressed interest in purchasing the company. None of these bidders were willing to proceed with a purchase if Hunter were not separated from the underperforming powerboat divisions. This restructuring initiative makes sense to us in light of these negotiations. For many months Hunter has been overburdened by the responsibility of carrying the costs of the entire Luhrs Marine group, and freedom from this yoke is vital to the continued success of Hunter."
Mestel continued, "We hear that there are currently binding letters of intent on the table and that several more bidders have emerged since the filing. Fresh capital and a renewed focus are exciting prospects and we (True North Yachts) expect clarity of the purchase in the weeks ahead."
As of now for us, it’s business as usual between Hunter and True North.
Peterson addressed Hunter dealers by saying, “I have known many of you personally over my 18 years with Hunter and I pledge to you I have the best interest at heart for the stockholders of Hunter, the employees of Hunter and the dealerships of Hunter.”
