RM YACHTS, BANKRUPTCY AND A SHAMEFUL RECOVERY

I like RM sailboats. The design, the conception and building quality are good and they are (or were) a good option for many in what regards the best boat to buy for a specific sailing and cruising program and several have been bought taking into account posts that I made about several models, generally with a very positive appreciation.

But unexpectedly they went bankrupt and I say unexpectedly because they had at the time a long waiting list, one of way more than a year, with many clients with orders and down payments. 

The bankruptcy reason had as origin the bankruptcy of another (smaller) shipyard, the one that made the Ofcet 32 and also bad decisions on the RM management regarding building processes.

It had all to to with the new RM model, the 11.80, that surprisingly instead of being, as all the others, a saturated in epoxy plywood  boat with an optional kevlar outside layer, had the hull sides in composite material, laminated to a plywood bottom. On the post about RM 11.80 I questioned the rationality of this option but I would never expect it to lead to its quick bankruptcy. You can read the review here:

https://interestingsailboats.blogspot.com/2019/11/beautiful-rm-1180.html

The Ofcet shipyard, the one that provided the composite parts that integrated the RM 11.80 hull, went bankrupt and they had to stop the production of the 11.80, a boat that constituted the biggest part of the orders, while they were looking for another provider.

But they could not find any that was able to produce the parts at a price that would not turn the ordered boats into a financial loss and the several months they took searching for a suitable partner, with the production stopped, increased the losses, leading to bankruptcy.

With so many orders, being a boat with a very good image on the market and with many loyal costumers, everybody thought that it would only be a question of time for the shipyard to find a new owner that would invest heavily, supporting the losses, in exchange for future revenues.

And in fact there was interest from investors and two were accepted by the court: one that represented the company continuity with a new investor, another a takeover from another company linked with yacht production. It was this latter proposal that the court chose as representing the best interest for the recovery and future of RM yachts.

Surprisingly RM (Fora Marine) was bought by Grand Large a company that has already several brands one of them producing boats that compete with the RM on the same market (voyage boats). The Grand Large owns Allures, Garcia, Outremer and Gunboat.

I thought that being bought by a large company and with plenty orders RM was on the way to become successful again but then I was astonished with the knowledge that the new company was neither responsible for the debts of the previous one, nor would they respect its commitments with clients that had ordered boats and had made large down payments.

I could not believe it but it is true, the new company will not respect the previous contracts with clients neither regarding the accorded price nor in what regards the money that was given to the company as down payment. The price to be used as reference will be the last price  of the boat(s) before the bankruptcy (not the one at the time of the contract) any special offers made over the price will be void and only 50% of delivered money will be considered.

This will represent a loss that in some cases can be way over 100 000 euros or about one third of the contracted cost of the boat. On several new contracts the clients will be paying 50% more than the initially contracted price. And they think that this is acceptable? 

Not many of the boats had already a 60 or 70% down payment but many have down payments of over 30%. Just to give you an idea of the dimension of this, the value that the company has on down payments is of about 2 million euros and what they intend to give back is a million and only if you make a new contract. Otherwise, no matter if they had already paid 75% of the boat, they will lose everything.

The number of clients with boats partially paid or with down payments is 25 and of course, they have associated themselves and moved lawsuits for damages against the company. But because by court ruling the new company has no debts and the old one has no assets (that passed to the new one) they will have very little chance of receiving anything.

In fact the one that should be sued is the French state for having a law that allows this situation, a law that protects workers at the cost of capital, as if capital had no individuals behind and in this case from the 3 million of debts the company had, 2 millions were due to the clients that had ordered boats.

For the state it is in fact a very convenient law that enables a court to allow a take over by a new company that will continue the existence of the shipyard, maintaining the brand, a shipyard that will continue to pay taxes to the state, maintaining 80% of the workers ( that will continue to pay taxes and will not have to be supported by the state through an unemployment allowance) and the "capitalists" that had debts from the company will lose it all since the new company has the assets of the old one, but not the debts.

The court limited itself to choose between the two proposals of take over, the one that would give more chances to recover the company (without paying the debts) maintaining the biggest number of workers and Grand Large proposed to inject 1,5 million €, not to pay the debts (that they don't have) but to give the company conditions to go on. And regarding that the Grand Large groupe has certainly a lot of experience on the management of successful shipyards.

One thing is for sure, this will not do any good to the company reputation, or should I say brand reputation? and because it is not possible to know what the court decision on the lawsuits will be, or even if the court ruling will be considered invalid by the European Court of Justice, the future of the new company may be at risk depending on several factors. So you know as much as I do and if you want to buy a new RM you know what to expect and the risks involved.

https://voilesetvoiliers.ouest-france.fr/bateau/rm-fora-marine/l-avenir-de-rm-stephan-constance-le-patron-de-grand-large-yachting-repond-a-nos-questions-d9a2becc-5a5c-11ea-8e21-392b725afa24
https://www.bateaux.com/article/33179/reprise-de-fora-marine-la-difficile-question-des-acomptes-sur-les-voiliers-en-commande?fbclid=IwAR2IOHHLSXsL_stlZDkchMLouUIKydC_t18o1BVJCwTy1GdfIoN_pzzIVKk