This is shocking!
Kadey-Krogen Yachts filed for Chapter 7 bankruptcy along with subsidiary American Tugs on July 6. This is not a Chapter 11 reorganization such as West Marine recently commenced, somewhat typical in the commercial and business world, but a much more severe and final occurrence. Chapter 7 is a complete liquidation of assets, with folks who placed unsecured deposits on yachts being at the back of the line behind all other creditors. This means that Kadey-Krogen and American Tugs will likely be totally gone and folks who were in line to receive boats will be completely without remedy. Only if there is money left over at the end of the process and all secured and business contractors providing KKY with its lifeblood (lessors, mortgage holders, banks and institutions lending money, suppliers providing goods and services and protected under the Uniform Commercial Code, etc.) have been paid in full, will regular customers who placed deposits on yachts be in a position to share the leftovers, if any exist. This is absolutely the worst position to be in for a yacht builder and its customers. Almost everyone loses.
With a boat now in build this is a bit spooky. However, Selene Yachts has a business record and performance and sales at the opposite end of the spectrum compared to KKY. While KKY has experienced a consistent drop off in business, with revenues decreasing yearly for years and orders falling off, Selene Yachts is growing beautifully and orders are increasing regularly. For now, I feel like the “Lucky Man” ELP sang about. Hoping to avoid the final outcome in the song.
Jack, a Lucky Man
Jack Burgess, Shangri-La 6047