Troubled Outboard Marine Corp. filed for Chapter 11 bankruptcy Friday,
seeking protection from creditors owed more than $768 million.
The filing in U.S. Bankruptcy Court in Chicago came one day after the
Waukegan-based company virtually halted operations, laying off employees from
Calhoun, Ga., to Traverse City, Mich. Its workforce, which numbered 7,200 at
the beginning of the month, has been slashed to 3,000 employees.
The privately held maker of boat motors, whose largest investor is
financier George Soros, said that it filed for reorganization under Chapter 11
in order to "sell some or all of its engine and boat operations."
The company said it has a commitment for $35 million in
debtor-in-possession financing from its bank group, which includes American
National Bank. The proposed financing will be submitted for court approval
OMC also said the loan is "expected to be sufficient to permit the company
to operate while it implements its restructuring plan."
The bankruptcy filing was approved during an emergency meeting of the
company's directors Friday morning during which the board also approved hiring
Skadden Arps Slate Meagher & Flom, a New York-based law firm, to handle the
In its petition, OMC listed assets of $877.1 million and debts of $768
million. Based on the company's second-quarter financial statement, OMC lost
$59.5 million on sales of $565.7 million during the first six months of the
year. Its third-quarter report will be late, the company has said.
Its 20 largest unsecured creditors are owed nearly $250 million, according
to the petition. The largest unsecured debt belongs to Connecticut-based State
Street Bank & Trust, which holds notes totaling $160 million.
Suppliers are owed at least $11.4 million. The company also listed more
than $7.4 million in economic development loans from three counties, none in
In addition to the parent company, eight subsidiary or affiliate firms also
filed for bankruptcy.
OMC is among the world's largest makers of boats and motors. Its engine
brands include Evinrude and Johnson; boat lines include Chris-Craft, Four
Winns and Javelin.
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