A Clark County Superior Court judge has appointed a receiver to assume control of the assets of Christensen Shipyards, a move that ultimately could lead to liquidation of the financially troubled yacht-building company.
Judge Gregory Gonzales has chosen Miles Stover to take responsibility for the Vancouver company’s property, including the authority to “market, sell, operate, protect, deliver and liquidate the property, the business of Christensen and/or any portion of such property or business,” according to Gonzales’ March 20 ruling.
Stover is founder and president of Turnaround Inc., a Gig Harbor-based firm specializing in crisis and bankruptcy management, and investigative and financial advisory services. He’s held “significant senior-level positions in industry as well as having been the senior executive in many turnaround situations,” according to the company’s website.
Reached by phone Tuesday afternoon, a representative of Turnaround said Stover was at Christensen’s office, at 4400 S.E. Columbia Way, and suggested calling him there. A phone message left with the company went unreturned.
Under Gonzales’ ruling, Stover has 30 days to provide all parties with a stake in Christensen’s business with a 90-day budget to relaunch the company’s shipbuilding operations.
The judge’s order is the latest step in addressing Christensen’s large legal troubles and financial turmoil, the first sign of which emerged in December when the company announced it was “currently working on a multipart ownership restructure” as it put some workers on temporary furlough.
Creditors were circling in December and January. In February, workers arrived one morning to start their day at the company only to find the gates locked. Later that month, employees arrived to pick up paychecks, days after learning the company had again halted production.
Gonzales’ ruling is favorable to two parties who filed a lawsuit against the company asking the court to appoint a receiver: Henry Luken, the Tennessee businessman who owns 50 percent of Christensen, and Christensen Financing LLC, an apparent affiliate of Luken’s.
Luken and Christensen Financing argued that a receiver should be appointed, in part, because the company’s leaders, including Luken and President Joe Foggia, are deadlocked over its direction.
They contended a receiver would ensure that work on partially completed boats, including two boats separately purchased by Luken and Christensen Financing, will be finished. Christensen Shipyards also is “currently insolvent, or it is not generally paying its debts as they become due, or it is in imminent danger of insolvency,” Luken and Christensen Financing argued in documents filed by the Portland law firm Ball Janik.
In answering the suit, Christensen Shipyards admits to this description of its finances. However, the company opposed appointing a receiver.
Its arguments included that Luken and Christensen Financing failed to notify the company and to give it time to remedy any default. Luken and Christensen Financing also failed to fulfill their contractual obligation to take their dispute to arbitration, the company argued.
In court documents, Foggia said he was working to sell the company to a competitor, Westport Yachts, a Florida shipbuilder. Westport, a “well-funded shipyard,” would purchase Christensen “for a price sufficient to pay all creditors in full,” according to Christensen Shipyards in documents filed by the Portland law firm Field Jerger. “This deal includes rehiring all employees, finishing work on the hulls and paying all creditors.”
But Gonzales ruled otherwise, saying the appointment of a receiver is “reasonably necessary under the circumstances to preserve and protect Christensen’s assets and the value of the business.”
Under Gonzales’ ruling, the company and its shareholders, owners, managers, trustees and attorneys must cooperate with Stover in carrying out the receiver’s responsibilities.
The judge’s order also prohibits the company, and its officers and representatives, from interfering with Stover’s management of Christensen’s assets and operations.
For his work, Stover will be paid $375 per hour, according to Gonzales’ order. He may seek approval from the court to employ attorneys, accountants or other professionals to carry out his duties. He has authority to pay all of the company’s operating expenses, including payroll, payroll taxes, employee benefits, and insurance and taxes. If the company lacks funds to restart ship-building activities, then Stover may also borrow money. The debt would be assigned to Christensen Shipyards.
The court has jurisdiction over any disputes that may arise during the receivership process.
