The judge overseeing the Fountain bankruptcy case last week ordered that the case be dismissed. But Judge Erik Kimball also left open the possibility of re-filing a Chapter 11 petition at a later date.

Ronald Glass, who was appointed receiver for Fountain last autumn, filed for Chapter 11 bankruptcy protection on January 18 with the US Bankruptcy Court in the Southern District of Florida.

The bankruptcy petition listed more than US$53m in liabilities, mainly to First Capital, and US$500,000 in assets. The parties in the case also included American Marine Holdings, Donzi Marine, Baja Marine, Fountain Dealers’ Factory Super Store, Fountain Powerboats Industries Inc., and Pro-Line Boats. Joseph G. Wortley, former chairman of Liberty Associates, which had previously owned the four Fountain and American Marine Holding boat brands, was also named as a party.

Kimball last week granted Worley’s motion to dismiss the case, saying that Glass was “not duly authorized” to sign the petitions that commenced the bankruptcy process. In signing the order, Kimball dismissed 10 cases associated with the Chapter 11 petition.

But Kimball also left open the possibility of re-filing a Chapter 11 petition, saying the cases were “dismissed without prejudice.” The judge said that if the Superior Court of Beaufort County, North Carolina, which initially appointed Glass receiver, authorized Glass to file the bankruptcy petition in future, that would constitute “prima facie evidence of authority for such purpose.”

Fountain Powerboats also filed for bankruptcy protection in 2009. In early 2010, Liberty Associates and then-chairman Reggie Fountain filed a joint reorganization plan that allowed Liberty Associates to acquire the company. Reggie Fountain left Fountain Powerboats in late 2010, and is now involved in a lawsuit against Liberty Associates over unpaid money and the retrieval of racing trophies. Liberty has filed a countersuit against Fountain, alleging that he stole "trade secrets" from the company.

Last autumn, Liberty Associates transferred its ownership interest in Fountain to First Capital. The bank quickly filed a lawsuit against Fountain, seeking US$61.04m in damages, alleging a breach in loan agreements and misappropriation of funds. Shortly after, the Beaufort court appointed Glass as temporary receiver for the four boat brands.

Company officials and Glass did not respond to requests for comment by press time.

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