See the Fountain Powerboats Docsheet Report for subsequent developments in the Fountain Powerboats bankruptcy proceedings.

Following five and a half hours of testimony and final argument, Judge Randy D. Doub of the Bankruptcy Court for the Eastern District of North Carolina ruled on October 9, 2009 that the proposed Section 363 sale credit bid of Oxford Financial Group (“Oxford”) for the operating assets of Fountain Powerboat Industries, Inc. (“Fountain Powerboats”) was not in the best interest of the Debtor’s estate.  The court instead approved a motion for Fountain Powerboats to obtain debtor in possession  financing from Liberty Associates for an amount up to and including $1.5 million.

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Fountain Powerboat Industries, Inc. and its 3 co-debtor affiliates (collectively the ^–Debtors ) have moved Bankruptcy Court for the Eastern District of North Carolina (the “Court”) to authorize the Debtors to postpone the pre-ordained section 363 sale.  This is a U-turn for the Debtors who had pushed for a rapid 363 sale citing fears that a delay could result in the Debtors running out of money to fund operations.  The two fold reason for the turnaround – a probable credit bid by a recent acquirer of the pre-petition secured lender’s position and a potential white knight offer to provide debtor in possession (“DIP”) and exit financing.  This may be good news for the suppliers and vendors who have nearly $1.8 million in pre-petition trade claims.

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