Legal issues cloud Fountain’s future

Published 12:43 am Saturday, October 15, 2011

A handful of cars remained in front of the nearly vacant Fountain facility Friday afternoon. Employees were reportedly sent home Oct. 7 amid legal action brought by First Capital of Florida. (WDN Photo/Jonathan Clayborne)

A Florida corporation has filed a complaint seeking approximately $61.04 million in damages from a cluster of entities including American Marine Holdings.

Until recently, AMH built the Fountain, Donzi and Pro-Line boat lines in Beaufort County.

In its complaint, FCC, Limited Liability Corp., doing business as First Capital, names 13 defendants — corporate entities, apparently, and an individual.

FCC, an equity investment group based in Boca Raton, Fla., says the “Borrower Defendants ceased operations” on Oct. 7, sending employees home with instructions not to return to work until further notice.

“Such actions will have an adverse effect on the value of the Collateral,” the complaint reads.

FCC also alleges the misappropriation of funds.

The complaint was filed Wednesday in Beaufort County.

A call seeking comment from First Capital wasn’t immediately returned Friday afternoon.

It wasn’t clear how many Fountain employees were affected by the legal issues at hand.

It was estimated the company employed around 150 people at its peak, said Tom Thompson, Beaufort County’s chief economic developer.

In May, John Walker, president of the combined outfits that made four boat lines on the Fountain campus, told the Washington Daily News the plant employed 165 people.

The complaint is now a matter for a court outside Beaufort County. The issue has been removed from Superior Court here to North Carolina Business Court, which has locations in Raleigh, Greensboro and Charlotte.

Sarah Parker, chief justice of the N.C. Supreme Court, ordered that the complex business case be assigned to John R. Jolly Jr., chief special Superior Court judge for complex business cases.

The case was the subject of a lengthy preliminary hearing on Thursday, said attorney Randolph James.

Based in Winston-Salem, James represents defendants Fountain Powerboats Inc., Joseph Wortley, Fountain Powerboats Industries, LLC, Fountain Dealers Factory Super Store Inc., Baja by Fountain and Liberty Acquisitions.

James said he made a general appearance in court on behalf of Fountain, the entity that owns the factory off Whichard’s Beach Road in Chocowinity.

“Obviously, there’s been a significant dispute between my client and a lender, and the dispute has disrupted the business,” he said.

James said he believed Fountain employees had been told to check back in with their employers in a couple of weeks. He referred further questions about the employees’ future to First Capital.

In 2009, after Fountain Powerboats filed for bankruptcy, Liberty Associates and Fountain jointly filed a reorganization plan, with Liberty obtaining the boat maker.

Reggie Fountain is the founder and former owner of Fountain Powerboats.

Early this year, Fountain sued his former company, contending he’s owed money, trophies and photographs from his career in racing.

In a counterclaim, Fountain Powerboats alleged that Fountain took company property and trade secrets when he left the company.

On Friday, Fountain said he attended this week’s Business Court proceeding in Greensboro.

Fountain said he ran his company for 30 years. He said his first concern is for the employees he said have been thrown out of work.

“I hope that the bank gets everything resolved,” he said. “I’m most sorry for the employees and the customers.”

Fountain said the plaintiff had asked the court to appoint a receiver to protect its assets in Beaufort County. He added he’s offered his free services to First Capital in the hope of keeping those assets here and getting employees back to work.

Walker, the Fountain executive who gave an interview in May, declined to make detailed comments on Friday.

“We certainly expect them to come back,” Walker said of the employees. “We still have employees here working.”

Several vehicles were in the parking on the Fountain campus Friday afternoon. It wasn’t known how many people were still working there.

In November 2010, the office of Gov. Beverly Perdue announced Fountain had been designated to receive a $150,000 grant from the state’s One North Carolina Fund, which helps fund economic development projects.

“The company plans to create 411 jobs and invest $5.1 million over the next five years in Washington,” reads a Nov. 22, 2010, news release from Perdue’s office.

The grant was contingent upon the creation of those jobs.

On Friday, the Daily News put in a call seeking information on the status of the grant from the N.C. Department of Commerce. The call wasn’t returned before 5 p.m.