Genmar Holdings seeks court OK to amend DIP facility to aid wind-down

By Caroline Salls

Pittsburgh, Feb. 16 - Genmar Holdings, Inc. requested court approval to amend its debtor-in-possession facility to allow it to wind down its businesses, realize the greatest value for assets and pay up to $850,000 of employee health care claims, according to a Friday filing with the U.S. Bankruptcy Court for the District of Minnesota.

Genmar said the amendment will allow it to make a decision on how to conclude its Chapter 11 cases. The company said it plans to file a plan of liquidation or convert its case to Chapter 7 bankruptcy by April 30.

Under the DIP loan amendment:

• The borrowing base will be eliminated;

• There will be a revolving facility, under which the lenders will make advances to the company at the discretion of the administrative agent;

• The termination date will be changed to the earliest of April 30, the date of termination of the revolving facility and the occurrence of an event of default;

• Funds will be made available under an itemized budget to pay up to $850,000 of former employees' health claims;

• Covenants related to Genmar's wind down will require the company to realize proceeds from its remaining assets in accordance with the budget and under a specified timeline;

• The lenders will provide for payment of professional fees as permitted by satisfying an existing $350,000 carve out; and

• Some defaults and covenants will be waived.

A hearing is scheduled for Feb. 18.

Genmar is a Minneapolis-based boat manufacturer that filed for bankruptcy on June 1, 2009. The Chapter 11 case number is 09-43537.

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