Two things are clear about Christensen Shipyards, the builder of yachts in Vancouver that once appeared to be irreversibly sliding into liquidation: The company now has a viable future, and it’s fully in the hands of former part-owner Henry Luken, a deep-pocketed Tennessee businessman.
A Clark County Superior Court judge has approved the sale of all of the company’s assets — $5.5 million worth of tangible and intangible valuables — to Luken, who already held 50 percent of the equity and voting stock in the company.
“We intend to operate the yard here as always,” Luken said in a phone interview early Tuesday afternoon after closing the purchase and sale agreement at the company’s offices. As of today, Luken said, the company employs 90 people. The company will have to increase its workforce to “about 140 or 150,” he said, but that will occur over time.
Under the deal, a court-appointed receiver sold everything from machinery and computer software to trademarks and contracts for the construction of several hulls to WIT Washington, a limited liability company overseen by Luken.
The receiver — Miles Stover, founder and president of Turnaround Inc., based in Gig Harbor — will use proceeds from the sale to settle the company’s unpaid rent, pay certain creditors and to resolve employee wage and benefit claims.
Although those and other sticky details remain to be sorted out, the ownership and operation of Christensen Shipyards, as of today, belong to Luken.
Previously, the company was controlled by a board of directors: Luken, Joe Foggia, the company’s former president, and David Christensen, the company’s founder. Foggia is now principal adviser of Global Yacht Advisors, according to his LinkedIn page. The company is listed as having a Fort Lauderdale, Fla., address, according to the company’s website. David Christensen has been “unable to participate or vote in board and shareholder meetings due to the effects of Alzheimer’s disease,” according to court documents.
Luken’s business ventures over the years have included broadcast television and real estate. Luken said he’s been closely involved in the design of yachts and knows how to pilot them. “And now I get to make the decisions and pay for them,” he said during a visit to Vancouver to close the deal.
The purchase and sale agreement, approved by Judge Gregory Gonzales on June 19 and finalized Tuesday, grew out of a court-ordered receivership process. That process ensued more than two months after signs of the company’s financial crisis first emerged in December 2014.
Not long afterward, creditors were circling the longtime ship manufacturer in Clark County that once sold a yacht to Tiger Woods and that once boasted of a turnaround after the Great Recession.
‘Without collusion’
In his written ruling that approved the sale of the company to Luken, Gonzales said Stover and Luken negotiated “in good faith, for fair value, at arms’ length and without collusion.”
Although the company now has a new owner and operator, other unresolved matters linger.
The ongoing receivership process is expected to sort out the validity of certain claims involving Christensen Shipyards and to turn up answers as to why the company plunged into financial troubles.
After Stover took responsibility for the company, court documents show, he found a financial mess, including “books of records that indicate a history of very weak internal controls.”
Now, Christensen Shipyards, at 4400 S.E. Columbia Way, looks to move forward under Luken.
In purchasing the company’s assets, Luken is receiving $4.5 million in intangible assets and $1 million in tangible assets. The deal also assigns several contracts to Luken. They include: contracts for the construction and completion of hulls 36, 38 and 40; a lease and a sublease between Christensen Shipyards and Christensen Group Inc., owner of shipyard real estate; and a business center lease between Christensen Shipyards and Hayden Corporation.
Luken said Tuesday he envisions operating two shipyards — Christensen and one in Vonore, Tenn., that’s 95 percent completed. Eventually, Luken said, he’d like to see the Vancouver site build “slightly smaller” yachts than the 164-foot vessels it has produced.
At the same time, he said, he envisions the 440,000-square-foot facility in Vonore producing 170-foot to 220-foot vessels. “It’s a monster,” Luken said of that facility. “You can land a small airplane inside the building.”
As to his ownership and operation of Christensen Shipyards, Luken said, “I think we can make money here.” He added, “I think we can make as good a product that ever came out of here. If anything, we’ll make boats better than they were ever (made) before.”
‘No other party’
Gonzales set the receivership process in motion on March 20, when he appointed Stover to assume control of the assets of Christensen Shipyards. The judge’s decision was favorable to two parties, including Luken, who filed a lawsuit against the company asking the court to appoint a receiver.
Eventually, Stover reported to the court that he had restored operations at the company and re-hired more than 70 employees. In May, Stover proposed selling Christensen’s assets to Luken. Stover told the court that while he’d been in discussions with various potential purchasers, not just Luken, “no other party has submitted an offer or letter of intent acceptable to the Receiver for the purchase of Christensen’s assets.”
The first sign of Christensen’s financial problems emerged in December 2014, when the company announced it was “currently working on a multipart ownership restructure.” In February, one employee told The Columbian that Christensen’s workforce had steadily declined through furloughs and layoffs, from a range of 400 to 450 down to a range of 100 to 110. Other employees, who wished to remain anonymous, cited similar numbers to the newspaper.
