The Limestone Boat Company Limited Provides Market Update with Respect to Chapter 7 Bankruptcy Filings by US- Subsidiaries
The Limestone Boat Company announced the Chapter 7 bankruptcy filings for its subsidiaries, TN Composites and Limestone US, on February 22, 2023. The company expects timely progress in asset liquidation under the supervision of a trustee. This filing constitutes an 'Event of Default' under their existing debenture indenture, making all outstanding amounts due. Limestone is simultaneously pursuing financial restructuring and plans to relocate manufacturing operations to New Brunswick, Canada, with a new facility expected to open in Q1 2024. The company aims to produce several models, including electric boats, to enhance its market position.
- The planned relocation of manufacturing operations to New Brunswick is expected to strengthen the company's operational capabilities.
- Expected launch of new boat models, including an electric model, may attract new customers and improve sales.
- The Chapter 7 bankruptcy filings indicate significant financial distress for Limestone's subsidiaries.
- The Event of Default under the debenture indenture could lead to increased scrutiny from creditors and affect future financing options.
COLLINGWOOD, Ontario, March 10, 2023 (GLOBE NEWSWIRE) -- The Limestone Boat Company Limited ("Limestone" or the "Company") (TSXV: BOAT) – confirms that its wholly-owned subsidiaries Ebbtide Holdings, LLC, doing business as "TN Composites" ("TN Composites") and Limestone US Inc. ("Limestone US" and collectively with TN Composites, the "Limestone US Subsidiaries") held its virtual creditor meetings for both companies on Wednesday, February 22, 2023 in relation to the previously announced voluntary petitions for relief under Chapter 7 of the Bankruptcy Code in the United States Bankruptcy Court in the Middle District of Tennessee, Nashville Division (the "Chapter 7 Proceedings"). Mr. Michael Gigandet, who has been appointed by the Office of the Unites States Trustee to act as trustee for the Limestone US Subsidiaries (the "Trustee"), attended the virtual creditor meeting along with representatives of the Limestone US Subsidiaries. No formal issues were raised by creditors of the Limestone US Subsidiaries and the Trustee has advised that the Chapter 7 Proceedings are expected to move forward in a timely and efficient manner. The Company expects than an asset sale with respect to the remaining assets owned by the Limestone US Subsidiaries is expected to take place in the coming weeks. The Trustee is expected to liquidate the assets of the Limestone US Subsidiaries and to distribute the proceeds of such sale proceedings in accordance with the order of priority established under Title 11 of the United States Bankruptcy Code and under the supervision and approval of the Bankruptcy Court.
The Limestone Boat Company’s decision to file voluntary petitions for relief under Chapter 7 of the Bankruptcy Code in the United States Bankruptcy Court for the Middle District of Tennessee for both TN Composites and Limestone US is believed to be the best strategy to maximize value for the stakeholders. Additional details relating to the bankruptcy proceeding by the Limestone US Subsidiaries:
- The Limestone US Subsidiaries have appointed Lefkovitz and Lefkovitz, PLLC in Nashville, Tennessee as legal counsel to assist them in connection with the Chapter 7 Proceedings.
- Court filings and other documents related to the proceedings are available on the Pacer website that can be found at www.tnmb.uscourts.gov.
The Company also confirmed that notice of the Chapter 7 Proceedings has been provided to TSX Trust Company acting in their capacity as trustee (the "Debenture Trustee"), under the debenture indenture dated May 14, 2021, between the Debenture Trustee and the Company (the "Debenture Indenture"). The Chapter 7 Proceedings constitute an "Event of Default" under the Debenture Indenture as a result of TN Composites being a "Material Subsidiary" as such term is defined in the Debenture Indenture (the "Event of Default"). As a result of the Event of Default, all amounts outstanding under the Debenture Indenture became due and payable by Limestone.
As previously disclosed by the Company, Limestone is actively working to pursue financial restructuring initiatives, including the debentures issued under the Debenture Indenture, which it expects to be completed in early 2023 subject to receiving all required approvals.
In addition to the financial restructuring, the Company has also actively been working on the relocation of the Limestone Boat manufacturing operations to New Brunswick, Canada. The Company is pursuing a new, purpose-built, state of the art plant focused on the Limestone brand and to re-commence manufacturing operations in Q1 of 2024. Limestone expects that the new facility will be used to produce the Limestone L200 Centre Console and Runabout models, and new fully-electric EV model later in the same year. The Company has also completed tooling for its new L290 Dual Console which is expected to commence in Q1 of 2024. Its L270 Dual Console, presently in development, is expected to follow within the first year.
The Company continues to have strong dealer support throughout New England, the Great Lakes and beyond. These are markets that can be effectively serviced from Atlantic Canada. More detailed announcements are expected in May of this year.
About The Limestone Boat Company Limited
The Limestone Boat Company Limited– owner and builder of Limestone® Boats - is publicly traded on the TSX Venture Exchange under the ticker symbol "BOAT". They are headquartered in Collingwood, Ontario.
For more information, please contact:
Bill Mitoulas | Investor Relations
800-720-2395
bill@limestoneboats.com
www.limestoneboatcompany.com
Scott Hanson | CEO of The Limestone Boat Company Limited
800-720-2395
info@limestoneboatcompany.com
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this news release.
Cautionary Note Regarding Forward-Looking Statements
Certain statements contained in this press release, and other publicly available documents including the documents referenced herein, constitute forward-looking information or forward-looking statements (collectively, "forward-looking information)". These statements relate to future events or future performance. The use of any of the words “anticipate”, “believe”, “could” “should”, “would”, “estimate”, “expect”, “forecast”, “indicate”, “intend”, “likely, “may”, “plan”, “potential”, “project”, “outlook”, “seek”, “target”, “trend” or “will” and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the parties’ current belief or assumptions as to the outcome and timing of such future events. Examples of such forward-looking information include, without limitation, the projected impact of the Chapter 7 Proceedings involving the Limestone US Subsidiaries on Limestone, the intention to restructure the Company's assets and liabilities, any future manufacturing opportunities for the Company and the Limestone brand in Canada, and further expected changes to the Company's operations and long-term viability. Actual future results may differ materially. The Company is subject to a number of risks relating to integration and go-forward operations, certain of which are more particularly described in the Company's public filings available on SEDAR including, without limitation, the filing statement filed by the Company on February 23, 2021, and the Management's Discussion and Analysis for the year ended December 31, 2021 and the three months ended September 31, 2022. The forward-looking information contained in this release is made as of the date hereof and the parties are not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward-looking information. The foregoing statements expressly qualify any forward-looking information contained herein.
Many factors could cause actual results, level of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking information. All the forward-looking information made in this press release is qualified by these cautionary statements and other cautionary statements or factors in this press release. There can be no assurance that the actual results or developments will be realized or, even if substantially realized, will have the expected consequences to, or effects on, the Company. Unless required by applicable securities law, the Company does not intend and does not assume any obligation to update this forward-looking information.
FAQ
What does the Chapter 7 bankruptcy filing mean for Limestone's subsidiaries?
How does the bankruptcy affect Limestone's financial restructuring efforts?
When is Limestone expected to resume manufacturing operations?
What new products can be expected from Limestone in the near future?
