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The world-wide recession is trying to claim another victim in the boating industry, but Reggie Fountain is tenaciously hanging on in the face of hardship. On Monday Fountain Powerboat Industries filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in the Eastern District of North Carolina. According to court documents, it has as many as 49 estimated creditors. Regions Bank of Birmingham, AL has claims totalling more than $19 million, according to an accounting of the creditors holding the 20 largest unsecured claims, it was reported. But while things seem grim for Fountain's prospects he has a plan for recovery.

If you will recall, in the spring and summer of 2008 fuel prices soared to $5 per gallon or higher in the U.S. and the American public decided it would take a holiday from new boat buying. Boat sales dropped by half nearly overnight. But guess what happened to the boats that are perceived to be the biggest gas-guzzlers of all? That's right, sales of high-performance boats became even fewer and farther between -- never mind that over the course of a season these boats usually consume no more fuel than most other boats their size (because they are run far less).

Fountain Hit the Hardest

As one of the largest builders in the U.S. of high-performance boats, with annual production in a decent year of around 350 units, Fountain was vulnerable. (Fountain sold 450 boats its best year.) Not surprisingly, it was the hardest hit last summer by the slowdown in boat sales. Making it doubly difficult for Fountain was the fact that in the spring he had taken on the Baja performance boat line from Brunswick and was in the process of re-tooling many of its models which was an added and unforeseen financial drain.

Imagine being the president of a publicly traded company which relied on 350 sales a year normally, but now saw sales drop off over 80%, was investing in new tooling for the Baja line, and had monthly debt service of well over $100k. Welcome to Reggie Fountain's world - but it gets worse.

Perfect Storm on the Pamlico

Then in September 2008 Lehman Brothers collapsed and nearly took the rest of the world with it. American boat builders across the board no matter what the brand largely shut down production, laid off both hourly and white collar workers and started building to order rather than building for stock. Not surprisingly Fountain Powerboats had trouble meeting the financial reporting hurdles laid down by the American Stock Exchange and last winter Fountain Powerboats was de-listed. Now raising operating capital and even selling boats was made even more difficult because of the specter of total insolvency hanging over the company's head.

On the "Pink Sheets" Fountain stock bounced between $1.72 and $.04.

Plan on the Pamlico

Chapter 11 may well be a god-send for Reggie Fountain. Now with the protection of the court he can re-organize. He says that he is talking with a couple of serious investors. Currently, Fountain owns 52% of the companies stock. Yesterday he was reported in Soundings Trade Only as saying that the company could emerge from Chapter 11 as early as by the end of September. "I'll probably own very little, if any, of the stock in the new company, but I'm hoping I'll continue to work for them," Fountain added. "That seems to be what they all want me to do, since I started this up, engineered it up and sold it for the last 30 years - over $1 billion worth of boats."

Reggie is not without plans for the future. In the accompanying video interview made Monday by a local North Carolina TV station Fountain sketched out some of his come-back strategy. In a nutshell, as related to us early last spring, the Fountain waterfront facility on the Pamlico River will become the focal point of Fountain's sales operation. Reggie envisions dealers bringing customers to his facility for a first class high-performance experience. He describes it as being a three-ring circus of boating fun, buyer education, and customer involvement in boats made to order.

Special Treatment

Reggie, of course, says he will be the star of the show and plans to take perspective buyers out in the boat that they plan to buy and personally show them how to not only drive the boat safely, but also how to get maximum speed out of it. That experience will be followed up with an in-depth plant tour, showing how Fountain boats are built.

Customers will be invited to customize their boats so that they feel that they have a unique vessel, one tailor-made to their requirements. As outlined in the news video Fountain plans to promote selling factory-direct in addition to having a dealer network. All of his boats will be on display and in the water ready for a sea trial in what Reggie calls his year-around boat show.

Reggie says that he will become a dealer for Mercury products and in addition will also rehab and customize old Fountain powerboats. Chances are that he will end up expanding that business into rehabbing nearly any boat, as he has the floor space to do it.

Reggie's Customer Care Program

At day's end, Reggie says that he will then invite prospects to stay at his newly-built mansion - which he personally owns and is not part of the company's assets -- on the Pamlico River. Having seen it, all we can say is that it must be the closest thing to Hugh Hefner's Playboy Mansion in the state of North Carolina. You get there by entering a high wrought-iron gate complete with Fountain's distinctive thunderbolt logos. Then climb the steps up to the Tara-like antebellum columns to the expansive front door, and marble foyer inside, complete with - you guessed it - a large marble Fountain logo on the floor.

Reggie has designed this 15,000-sq. ft. mansion strictly for entertaining his customers and it has four large guest bedrooms, each with en suite bathroom and complete media facilities. On the third floor is a huge workout gym and in-home theater to watch Reggie's latest videos.

On the main floor is a cozy oak-paneled bar where guests can unwind before dinner. The dining room is adjacent and it is there that Reggie plans to host his customers to some of the best down-home cooking that North Carolina has to offer. After dinner you can stroll down to the dock out back and take a moonlight cruise on the Pamlico.

Reggie Fountain is probably the most colorful boat builder currently in the business and he has a fierce pride that won't let him give up easily. We'll keep you posted on the latest developments at Fountain.

Source Boattest
 

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And to think, if Reggie would hock the gold chain collection all this could have been avoided...


Sad news, but not unexpected - and I don't think we've seen the end of this sort of thing by a long shot.
 

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QUOTE(Fast~Eddie @ Aug 26 2009, 05:03 PM) <{POST_SNAPBACK}>SAD.
Just think of all the fuel being saved for the tiny cars we are gonna buy

You buyin' a small car? Good for you, way to save the planet and help reverse this global warming. You are a true American.

Matt
 

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QUOTE(tcg @ Aug 26 2009, 05:09 PM) <{POST_SNAPBACK}>QUOTE(Fast~Eddie @ Aug 26 2009, 05:03 PM) <{POST_SNAPBACK}>SAD.
Just think of all the fuel being saved for the tiny cars we are gonna buy

You buyin' a small car? Good for you, way to save the planet and help reverse this global warming. You are a true American.

Matt


Global warming?
 

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QUOTE(Jazzy405 @ Aug 26 2009, 06:02 PM) <{POST_SNAPBACK}>It is a shame. I hope they can turn it around, because when (yes I said when, not if) I win the lottery, I see a 48 Express Cruiser in my future.


Only one? Geez with $325,000,000.00 I might have to get a couple. Think I can get one in camoflage? Umm...for duck hunting.

Its a dang shame. Hope they all come out good. We don't need another company to fold.
 

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You do realize they are not going out of business, right??
 

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QUOTE(Away Point @ Aug 27 2009, 08:13 AM) <{POST_SNAPBACK}>QUOTE(Pornodave @ Aug 27 2009, 08:06 AM) <{POST_SNAPBACK}>You do realize they are not going out of business, right??
Time will tell. Chapter 11 certainly isn't a good sign.


You are right, time will tell. But this could be the best thing ever for them....
 

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QUOTE(Pornodave @ Aug 27 2009, 08:17 AM) <{POST_SNAPBACK}>QUOTE(Away Point @ Aug 27 2009, 08:13 AM) <{POST_SNAPBACK}>QUOTE(Pornodave @ Aug 27 2009, 08:06 AM) <{POST_SNAPBACK}>You do realize they are not going out of business, right??
Time will tell. Chapter 11 certainly isn't a good sign.


You are right, time will tell. But this could be the best thing ever for them....

But not so good for the others who ended up providing goods and services without (or partial) pay.

Not saying this can't be a good thing for Fountain, just that it's not what we want to see, and that what lead here doesn't seem to be going away.
 

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QUOTE(Away Point @ Aug 27 2009, 08:47 AM) <{POST_SNAPBACK}>QUOTE(Pornodave @ Aug 27 2009, 08:17 AM) <{POST_SNAPBACK}>QUOTE(Away Point @ Aug 27 2009, 08:13 AM) <{POST_SNAPBACK}>QUOTE(Pornodave @ Aug 27 2009, 08:06 AM) <{POST_SNAPBACK}>You do realize they are not going out of business, right??
Time will tell. Chapter 11 certainly isn't a good sign.


You are right, time will tell. But this could be the best thing ever for them....

But not so good for the others who ended up providing goods and services without (or partial) pay.

Not saying this can't be a good thing for Fountain, just that it's not what we want to see, and that what lead here doesn't seem to be going away.


Def not what you want to see, but the alternative is worse.
 

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QUOTE(Pornodave @ Aug 27 2009, 08:49 AM) <{POST_SNAPBACK}>QUOTE(Away Point @ Aug 27 2009, 08:47 AM) <{POST_SNAPBACK}>QUOTE(Pornodave @ Aug 27 2009, 08:17 AM) <{POST_SNAPBACK}>QUOTE(Away Point @ Aug 27 2009, 08:13 AM) <{POST_SNAPBACK}>QUOTE(Pornodave @ Aug 27 2009, 08:06 AM) <{POST_SNAPBACK}>You do realize they are not going out of business, right??
Time will tell. Chapter 11 certainly isn't a good sign.


You are right, time will tell. But this could be the best thing ever for them....

But not so good for the others who ended up providing goods and services without (or partial) pay.

Not saying this can't be a good thing for Fountain, just that it's not what we want to see, and that what lead here doesn't seem to be going away.


Def not what you want to see, but the alternative is worse.

For sure!

At least we're not ALL impoverished by this bankruptcy (unlike certain other recent examples).
 

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QUOTE(Suck My Wake @ Aug 27 2009, 08:13 AM) <{POST_SNAPBACK}>Should've never bought Baja. Stick with what you know.

Reggie never "bought" Baja, Brunswick signed it over to Fountain just to get it off the books. This has been a foregone conclusion for a number of years and expect more to fallow.

QUOTEAccording to court documents, Fountain has estimated assets up to $50,000 and estimated liabilities between $10 million and $50 million. It has between one and 49 estimated creditors.

50K, One of the boats in his lot is worth 4 times that! Then you have all the shop equipment, company vehicles, office equipment, motors, drives etc.
Only Reggie will come out of this Bankruptcy clean.
 
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