-Hayley Kaplan

Boat manufacturer Fountain Powerboat Industries Inc. has steered its way back into Chapter 11 to sell its assets.

Receiver Ronald Glass of GlassRatner Advisory & Capital Group LLC on Jan. 18 filed a bankruptcy petition for FPI and nine affiliates in the U.S. Bankruptcy Court for the Southern District of Florida in West Palm Beach.

Judge Paul G. Hyman on Jan. 19 approved joint administration of the cases, with American Marine Holdings LLC as the lead debtor. He was set on Monday to preside over an evidentiary hearing for FPI's motion to use the cash collateral of lender FCC LLC, owed $53.61 million.

FPI requested the cash to fund necessary business expenses. Without use of the funds, the Washington, N.C., company said, it would be forced to cease operations.

FPI said Glass determined the debtors' estates would be better administered in bankruptcy court than in state court, where he had been working to sell their assets. In addition, FPI asserted Joseph Wortley had filed a Chapter 11 petition for one of FPI's debtor affiliates, Palmetto Park Financial LLC, on Jan. 16, which interfered with the sale.

Judge James L. Gale of the Superior Court of North Carolina on Oct. 20 had named Glass receiver for the debtors, court papers show. On Oct. 12, FCC, which does business as First Capital, had filed a complaint against them, as well as Wortley and two other entities, after the debtors allegedly defaulted on loans from FCC.

The defendants agreed that two boatmakers owned by AMH — fellow debtors Donzi Marine LLC and Pro-Line Boats LLC — had defaulted along with AMH and two affiliates, and they consented to hand interests in the related group of borrowers to FCC. The defendants, however, disputed FCC's ability to seek the appointment of a receiver for FPI and three affiliates that recently passed through Chapter 11. The defendants also argued FCC could not declare a cross-default on FPI's debt because of the default by AMH.

Gale, however, in his order appointing Glass as receiver ruled that FCC was likely to prevail on its claims of a cross-default and default on FPI's debt. He also said appointment of a receiver was justified solely by FPI's recent shuttering of its operations.

FPI, the order shows, maintained the shutdown was a short-term event triggered by FCC cutting off funding.

FPI, which produces recreational offshore sport boats, sport fishing boats and sport cruisers, previously filed for bankruptcy on Aug. 24, 2009. During the case, the company sold its assets to Liberty Associates LC, which already owned AMH, news reports show. — Hayley Kaplan