An Unexpected Tennessee Company Now Files For Bankruptcy

May 23, 2024

An unexpected Tennessee company now files for bankruptcy after defaulting on debt it had owed to its creditors.

Canadian boat manufacturer Limestone Boat Co.’s subsidiary Ebbtide Holdings, doing business as Limestone US and TN Composites, on Feb. 22, 2023, filed for Chapter 7 liquidation in the U.S. Bankruptcy Court for the Middle District of Tennessee.

The filing triggered a default on debt owed to TSX Trust Co.

The industry has seen a chain reaction of bankruptcies worldwide.

In Europe, Swedish boat maker Ryds Boats in November 2023 filed for bankruptcy and was purchased by Norwegian manufacturer Cormate.

And In January 2024, German boat builder SAY Carbon Yachts filed for insolvency.

The most recent significant boat-related bankruptcy involved ski and wake boat dealer Tommy’s Fort Worth and 16 affiliates, which operate nationwide as Tommy’s Boats dealerships.

Debtors on March 20 filed for Chapter 11 bankruptcy to restructure their debts and obligations after defaulting on about $105 million of secured debt owed to M&T Bank.

The Fort Worth, Texas-based debtors listed $1 million to $10 million in assets and $100 million to $500 million in debts in its petition.

The debtor listed over $123 million in secured and unsecured debts in its petition.

Unfortunately, several customers nationwide have been unable to get Tommy’s to return their deposits, including a Colorado customer whose $7,350 deposit check was cashed by the company, but no boat was delivered and the deposit has not been returned, ABC television affiliate Denver7 reported.

Tommy Boats is also involved in other litigation as it filed a lawsuit on April 10 in the U.S. District Court for the Eastern District of Tennessee against one of its dealer partners, Loudon, Tenn.-based Malibu Boats.

“The company intends to vigorously defend itself against the claims made by Tommy’s,” Malibu Boats said in an April 11 statement.

“Tommy’s was formerly a longtime dealer partner of ours, and we ended our relationship due to concerns about Tommy’s own conduct and its financial soundness.

Indeed, Tommy’s lender is also suing it for violating the agreements Tommy’s used to finance the purchase of our boats.

We will always act to protect our business, our customers and our shareholders.”

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Also Read: Another Mall Clothing Retailer Now At High Risk of Bankruptcy

Other Economy News Today

Another unexpected fashion company now files for bankruptcy citing “extremely high costs due to inflation”, and other troubles.

Fashion brand Esprit has filed for insolvency in Europe citing “extremely high costs due to inflation, interest rates and energy prices, the after-effects of the coronavirus pandemic and the consequences of international conflicts.”

The insolvency filing, which was submitted to a court in Germany, applies only to the company’s European businesses.

All stores and online operations will continue as normal throughout the proceedings, during which the company said it will undergo a “transformation program” to reorganize its finances and business in Europe.

However, the company did note that high rents and an “overly bloated workforce” were some of factors contributing to its financial woes, foreshadowing potential cuts in both areas.

Founded in the U.S. in 1968, the company is now headquartered in Germany and Hong Kong and is listed on the Hong Kong stock exchange.

This is the second time Esprit has entered bankruptcy in the past four years.

Esprit currently has a presence in 40 countries around the globe, with the company’s Asia-Pacific and North and South America divisions unaffected by the European proceedings.

Each group within Esprit’s European business will be tasked with proposing and executing its own restructuring plan tailored to its region “allowing for more creative solutions and potentially better outcomes,” said the company in a statement.

The group also said it is exploring new funding opportunities and that a number of “potential investors have expressed their interest for a strategic partnership.”

“The self-administration proceedings have been initiated with the primary objective of not only restoring the economic stability of the company but also retaining the strength of the Esprit brand name,” said the statement.

“By taking proactive steps to address the disproportionate operating costs and streamline the business, the company demonstrates its commitment to maintaining a strong and competitive brand presence in the market.”

This second European bankruptcy comes as the Esprit works to reestablish its presence in North America, an effort that kicked off last year with a series of pop-ups across the U.S.

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Also Read: This Massive Mall Retailer Is Now Closing In California

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