Business History Books » Business Plans » OMC Files Chapter 11 (long!)
OMC Files Chapter 11 (long!)
Question:
Nurse! We could use a little help here, please…..
Response:
Hey fella, why the fearmongering? Just because they are shutting down, dumping their employees and selling their equipment and property doesn’t mean they ain’t doing great! — Bob Rickard SECRET WEAPON — World’s absolute finest spinnerbaits! All others are now obsolete . . . See for yourself at http://inetsa.com/user/secretweapon
– Hide quoted text — Show quoted text -> December 22, 2000 > Outboard Marine Corp Files For Chapter 11 > Dow Jones Newswires, By Richard Gibson > DES MOINES, Iowa — Outboard Marine Corp. (X.OMC) filed a Chapter 11 > bankruptcy petition in Chicago Friday afternoon, one day after > suspending most of its operations. > The privately held company said it sought court protection to expedite > the sale of "some or all of its engine and boat operations." > OMC, of Waukegan, Ill., said it is reducing its North American work > force by about 4,000 immediately. That cut affects both hourly and > salaried employees at all operations, a company news release said. > Among the world’s largest makers of outboard marine engines and > boats, OMC held an estimated 32% share of the U.S. outboard engine > market as of last Dec. 31. > In addition to its Johnson and Evinrude engines, OMC makes a variety > of boats. Brands include Chris-Craft, Four Winns, Seaswirl, Stratos, > Javelin, Hydra-Sports, Princecraft and Lowe. > The company said it has a commitment from its bank group to provide > $35 million in debtor-in-possession financing, which Outboard said is > "expected to be sufficient to permit the company to operate while it > implements its restructuring plan." > Major investors, who include George Soros, were said to have approved > of the decision to file the Chapter 11 petition. Outboard said it > filed for voluntary reorganization so as to expedite the sale of its > businesses under court supervision. It hopes to "consummate a > beneficial transaction as quickly as possible," the company said. > Industry sources told Dow Jones Newswires that OMC has been seeking > buyers for many of its assets for weeks. The company was said to have > knocked on doors in Japan and elsewhere abroad as it scrambled to stay > afloat. > In its petition, OMC asked that the bankruptcy court allow it to > continue compensation and benefit plans for its remaining employees – > the precise number wasn’t disclosed – as well as to maintain customer > sales, support and services activities. > A source close to the situation said that a skeleton staff of perhaps > 700 employees may stay on until the fate of the company is determined. > The company also sought court permission to make post-petition > payments due suppliers in the ordinary course of business, it said. > Only Thursday Outboard notified employees of its intention to "shut > down our operations indefinitely." But manufacturing plants across > the U.S. already were largely shuttered because of an extended > year-end shutdown brought about by OMC’s financial problems, > exacerbated by weakness in the consumer boat-and-motor market. > Outboard has been in straits for months. In an effort to right itself > it brought in new top management while its investors pumped in more > financing. > For the six months ended June 30 OMC reported a loss of $59.5 million, > or $2.92 a diluted share, on sales of $565.7 million. > OMC went private in 1997 when New York investor Greenway Partners, > backed by Soros funds, outbid Roger Penske’s Detroit Diesel Corp. and > bought the company for $325 million. Greenway Partners principal > Alfred Kingsley couldn’t be reached Friday for comment on the Chapter > 11 filing.
Response:
December 22, 2000 Outboard Marine Corp Files For Chapter 11 Dow Jones Newswires, By Richard Gibson DES MOINES, Iowa — Outboard Marine Corp. (X.OMC) filed a Chapter 11 bankruptcy petition in Chicago Friday afternoon, one day after suspending most of its operations. The privately held company said it sought court protection to expedite the sale of "some or all of its engine and boat operations." OMC, of Waukegan, Ill., said it is reducing its North American work force by about 4,000 immediately. That cut affects both hourly and salaried employees at all operations, a company news release said. Among the world’s largest makers of outboard marine engines and boats, OMC held an estimated 32% share of the U.S. outboard engine market as of last Dec. 31. In addition to its Johnson and Evinrude engines, OMC makes a variety of boats. Brands include Chris-Craft, Four Winns, Seaswirl, Stratos, Javelin, Hydra-Sports, Princecraft and Lowe. The company said it has a commitment from its bank group to provide $35 million in debtor-in-possession financing, which Outboard said is "expected to be sufficient to permit the company to operate while it implements its restructuring plan." Major investors, who include George Soros, were said to have approved of the decision to file the Chapter 11 petition. Outboard said it filed for voluntary reorganization so as to expedite the sale of its businesses under court supervision. It hopes to "consummate a beneficial transaction as quickly as possible," the company said. Industry sources told Dow Jones Newswires that OMC has been seeking buyers for many of its assets for weeks. The company was said to have knocked on doors in Japan and elsewhere abroad as it scrambled to stay afloat. In its petition, OMC asked that the bankruptcy court allow it to continue compensation and benefit plans for its remaining employees – the precise number wasn’t disclosed – as well as to maintain customer sales, support and services activities. A source close to the situation said that a skeleton staff of perhaps 700 employees may stay on until the fate of the company is determined. The company also sought court permission to make post-petition payments due suppliers in the ordinary course of business, it said. Only Thursday Outboard notified employees of its intention to "shut down our operations indefinitely." But manufacturing plants across the U.S. already were largely shuttered because of an extended year-end shutdown brought about by OMC’s financial problems, exacerbated by weakness in the consumer boat-and-motor market. Outboard has been in straits for months. In an effort to right itself it brought in new top management while its investors pumped in more financing. For the six months ended June 30 OMC reported a loss of $59.5 million, or $2.92 a diluted share, on sales of $565.7 million. OMC went private in 1997 when New York investor Greenway Partners, backed by Soros funds, outbid Roger Penske’s Detroit Diesel Corp. and bought the company for $325 million. Greenway Partners principal Alfred Kingsley couldn’t be reached Friday for comment on the Chapter 11 filing.