Boat dealership group Tommy’s Boats LLC has begun the process of liquidating its remaining inventory and assets following a filing for Chapter 11 bankruptcy protection in May 2024.
The Grand Rapids-based business has operated as a business for 43-years. It was founded in Denver, Colo. in 1981 by Tommy Phillips and later acquired by entrepreneur Matthew Borisch and members of his family.
The company had 15 dealerships in eight states when it filed for bankruptcy and was said to be one of the largest pontoon dealers in North America.
The U.S. Bankruptcy Court for the Northern District of Texas has approved a motion by the company’s trustee to hire Mark Wells, a former employee as a consultant to serve as the company’s wind-down consultant and sell the company’s remaining watercraft and its property, equipment and inventory to help pay its debts.
Mark Wells will “assist with all liquidations of the Debtors’ watercraft inventory, assignment of the Debtors’ unexpired leases of non-residential real property, the sale of the Debtors’ dealer operations and related property, including pro-shop merchandise, service center parts, equipment and inventory, and customer data data and boat purchase history, the sale of other valuable estates’ assets, and such other reasonable wind-down tasks as the Company and Consultant may mutually agree upon.”
Chapter 11 bankruptcy
Court documents relating to the Chapter 11 bankruptcy showed that Tommy’s Boats had between $1 million to $10 million in assets and $100 million to $500 million in liabilities.
Tommy’s listed the 30 largest unsecured claims totalling almost $123.6 million.
M&T Bank was the company’s largest creditor, with a total claim of more than $105 million, followed by Grand Rapids-based Mercantile Bank with a $4.7 million claim.
The filing also listed around $5 million in unpaid sales taxes in several states.
The wind-down agreement follows a settlement in a lawsuit between Tommy’s Boats and manufacturer Malibu Boats Inc. in which the manufacturer agreed to a $3.5 million payment to the dealership group’s estate while also withdrawing its $9.6 million unsecured claim against the company.
Tommy’s Boats had alleged that Malibu Boats had forced the dealer to take in nearly $100 million of its highest priced, highest margin, slow moving boat inventory to 15 dealerships as part of an ‘intentional and fraudulent scheme’.
