KENT COUNTY
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LAINFIELD TOWNSHIP, Mich. (WOOD) — Tommy’s Boats has been placed under a court-appointed receivership, according to Crain’s Grand Rapids Business.
News 8 partner Crain’s reports a Delaware-based crisis management consulting firm has been appointed as the receiver for Tommy’s Boats, which has three locations in Michigan including one on Morrissey Drive off of West River Drive in Plainfield Township.
The firm has taken control of the boat dealership’s assets and income and will work to pay off its debts and fees, Crain’s reports.
The move comes after M&T Bank sued Tommy’s over breaching a lending agreement. Crain’s reports M&T bank claims Tommy’s defaulted on close to $118 million in debt.
Tommy’s Boats told Crain’s that it is cooperating.
“By consenting to the receivership, we believe we will be in the best position to manage our financial situation, and ultimately emerge with a revitalized and stronger Tommy’s business, while our lawsuit against Malibu is ongoing,” the statement to Crain’s said. “This decision provides us with the best path to move forward, and one that we believe will create the best available opportunities for our employees, customers, other stakeholders and company.”
Tommy’s Boats in a lawsuit accused boatmaker Malibu of a “fraudulent scheme.” It claims Malibu pressured the dealership to take on more boats, and that the boatmaker owes it millions of dollars in incentives.
Malibu is also accused of sending more high-priced, high-margin Malibu brand vessels than the 65/35 mix of Malibu and Axis boats Tommy’s had requested.
Malibu has defended itself, and says all the boats it sent to Tommy’s were ordered by the dealership.
“Tommy’s was formerly a longtime dealer partner of ours, and we ended our relationship due to concerns about Tommy’s own conduct and its financial soundness,” it said in a statement in April. “We will always act to protect our business, our customers and our shareholders.”