By By GREG KATSKI
Community Editor
At the beginning of the year, Reggie Fountain told the Daily News he was cautiously optimistic about the future financial success of Fountain Powerboat Industries Inc. Nearly 12 months later, Fountain is fighting to maintain control of the company he helped found 30-plus years ago.
That struggle is the No. 3 story on the Washington Daily News’ list of Top 10 local stories for 2009.
The fight for Fountain Powerboats’ assets began in earnest when the company filed for Chapter 11 bankruptcy protection on Aug. 24.
The company owed $19.6 million to Regions Bank, its largest creditor. It planned to sell its assets, including its Washington plant and tooling operations, its brand names and unsold Fountain and Baja inventories, according to court documents.
A few weeks later, Oxford Investment Group purchased the company’s bank note from Regions Bank for some $6.5 million, becoming Fountain Powerboats’ largest creditor.
With Oxford’s purchase, Fountain made an about face and filed a motion to restructure his company’s bankruptcy protection with the U.S. Bankruptcy Court in the Eastern District of North Carolina. Chief Judge Randy Doub ruled in favor of Fountain at a hearing held Oct. 9, allowing the company to reorganize and retain its assets, as opposed to sell its assets at an auction set by the court.
The company is currently working on a reorganization plan with potential lead investor Liberty Investments. Earlier in the year, Liberty became majority shareholders in two fledgling powerboat companies — Donzi and Pro-Line Boats.
Oxford, as Fountain’s largest creditor has continued to pursue Fountain Powerboats’ assets through legal means.
On Nov. 4, Oxford filed a motion with the bankruptcy court to terminate the exclusive right of Fountain and Liberty to file a plan for reorganization as debtors-in-possession. Doub ruled in favor of Fountain and Liberty at the Dec. 1 hearing, denying Oxford’s request to terminate exclusivity.
Earlier in the year, murmurs of Fountain Powerboats’ demise began when the company was delisted from the New York Stock Exchange Alternext US stock exchange in February. According to the exchange, one violation was that the company didn’t have enough money, and the second was that the shares of its stock being traded — added together — were not valuable enough.
One business day after the company was delisted, Fountain Powerboats reported a comprehensive loss of more than $3.5 million in its December 2008 report filed with the Securities and Exchange Commission.
“We’re doing our best to deal with these challenging times and work our way through it,” Fountain said at the time.