By By GREG KATSKI
Community Editor
Fountain Powerboat Industries Inc.’s debtors-in-possession are not the only ones wanting to file a plan for Chapter 11 reorganization of the sportboat company.
FB Investments, LLC, filed a motion to terminate the exclusive right of Reggie Fountain, president and CEO of Fountain Powerboats, and the company’s majority shareholder, Liberty Investments, to file a plan for reorganization as debtors-in-possession. The motion was filed in the U.S. Bankruptcy Court in the Eastern District of North Carolina on Nov. 4, with a hearing set for Dec. 1 in Wilson.
FB Investments is a subsidiary of the Oxford Investment Group, which is Fountain Powerboats’ primary secured creditor. Oxford bought Fountain Powerboats’ bank note from it largest creditor, Regions Bank, for $6.5 million on Sept. 14.
Oxford’s purchase of the bank note, at some $19 million, came after Fountain Powerboats filed for Chapter 11 bankruptcy protection Aug. 24. Oxford was interested in obtaining the sportboat company’s assets through a bankruptcy auction in early October, but Fountain Powerboats shifted direction and filed for Chapter 11 reorganization.
A bankruptcy judge ruled in favor of that reorganization, and the sportboat company has until Dec. 22 to present a reorganization plan to the court.
Oxford filed its motion last week because the investment group believes it has a business plan superior to Fountain Powerboats’ plan.
If the motion is granted, it will let the sportboat company’s creditors decide which is the better plan, according to Selwyn Isakow, chairman and CEO of Oxford.
Isakow said Oxford already has a plan in place if the motion is granted.
“I think what (Fountain Powerboats) needs is a different focus and philosophy; a philosophy based on integrity and the pursuit of excellence,” Isakow said.
Isakow said that the individuals the investment group would use to execute the business plan have more expertise and experience in the marine industry than Fountain.
Fountain refuted Isakow’s claim, noting that he has been the company’s chief engineer, designer, developer and manufacturer since Fountain Powerboats was founded some 30 years ago.
“This group said they can run the operation better than I can. That’s like me saying I’m flying to the moon in my new rocketship today,” Fountain said.
Isakow did not explain what Fountain’s role would be with Fountain Powerboats if Oxford obtained the sportboat company’s assets.
“That would be between he and I,” Isakow said. “I’m confident that we could work out an attractive result for he and the company.”
Isakow said that there is no such thing as an indispensable individual in business.
“(We have a) succession plan for everyone within the company,” Isakow said.
Fountain believes the sportboat company he has run for more than 30 years will falter without him at the helm.
“If I’m not there, they’re not going to sell any boats,” he said. “To think that somebody else can come in and say they can sustain the company is highly improbable and almost nonexistent.”
Fountain added that if Oxford obtained Fountain Powerboats’ assets and retained him as president and CEO of the company, he would refuse to help build the sportboats.
Isakow said he wanted to put to rest any talk of Oxford moving the sportboat company if it took over its operations. He said his investment group’s reorganization plan calls for the addition of jobs at Fountain Powerboats’ factory on Whichard’s Beach Road and an increase in the infrastructure of the company.
Isakow said Oxford’s global expertise would bring business from across the world to Washington and Beaufort County.
“We understand how to be successful on a global scale,” he said. “We see Washington as the center of a global marine business.”
Isakow said North Carolina is idyllic for such a business because of the skill set of its work force, the commitment by the state to the marine industry and its location.
Isakow said he hired a consultant some 10 years ago to look into investment opportunities in the sportboat industry. The investment group took its time to find the right business, according to Isakow.
“People were paying outrageous prices to be in the industry,” he said.
That is until the market bottomed out and sportboat companies such as Fountain were obtainable for less, he said.
Isakow said his consultant told him that Fountain was for sale, and Oxford jumped at the investment opportunity. Isakow said he made a visit to Fountain Powerboat’s factory shortly after Fountain filed for Chapter 11 bankruptcy protection
“At the end of the day, I was feeling very good about Reggie,” Isakow said.
Isakow said that Fountain pushed him to buy the sportboat company’s bank note.
“Not only did he encourage me to get the bank note, but he told me to purchase it in a certain time frame,” Isakow said.
Fountain refuted Isakow’s claim, saying, “I didn’t encourage him to buy the bank note; he encouraged himself.”
Fountain said that Isakow sent his consultant to Fountain Powerboats after Oxford obtained the bank note to run the sportboat company.
“He came in and tried to take over the factory as a creditor,” Fountain said. “(He) was a total jerk.”
Isakow said that Fountain made an about face after recommending that Oxford buy the bank note and decided that he didn’t want to do business with the consultant.
For now, Isakow said, he just wants the court to hear Oxford’s business plan.
“We hope to get the opportunity to basically put forward a plan that others will perceive as the best plan for the company,” he said. “I want to develop a business intertwined with the community around it. If we’re successful, the community is successful.”