Yacht maker Post Marine Co. Inc., which had been building yachts since 1957, recently filed for bankruptcy. Under this Chapter 7 bankruptcy filing the company will liquidate its assets to pay its creditors.
Currently, Post Marine has over $5.4 million in liabilities and only $1.4 million in assets, with $1.2 million of the assets represented by the company’s building, which includes sheds, barns and other buildings used for boat building. The company also lists in assets an additional $150,000 in boat building materials and equipment.
In general, boat and yacht sales have declined in recent years. According to the National Marine Manufacturers Association the recession led to a sharp decline in boat sales in 2009. Between 2008 and 2009, sales dropped by over 19%. For some companies, this decrease may have been just too much to be able to continue to profitably function. Many companies might have just been holding on hoping for things to financially get better ever since.
Post Marine is also not alone in its financial struggles. With the 2007 U.S. recession, many consumers stopped going out as much and spending on unnecessary items, like boats and yachts. This decrease in spending made it a lot harder for many businesses all over the country – both and large and small – to continuing operating.
For those businesses that are struggling, a Chapter 7 bankruptcy may give the debt relief that is needed. With a Chapter 7 bankruptcy the assets of a business are liquidated, and with it being the end of the business, creditors are no longer able to try and collect or even litigate against the business.
When looking at the decision to file for bankruptcy, some businesses may want to continue to stay open, which means that a Chapter 13 or Chapter 11 may be desirable. The best option to file under will depend on a business’ circumstances.
Source: pressofAtlanticCity.com, “Mays Landing’s Post Marine files for Chapter 7 bankruptcy,” Brian Ianieri, 31 March 2011