Crate Marine Bankrupt

Ok, this is very very very ugly. Bankruptcy filed on November 14. Receiver appointed on December 8. That's just the tip of the iceberg, however.

Notice sent that all boat owners, even those stored on the premises need to file claims. Findings of "Competing Claims" regarding boats. Running a proof of property claim process.

So what does this mean? Apparently boats sold but previous owner never paid for them. If that is true, now we're beyond bankruptcy and into fraud.

I quote from the most recent report:

24. In its First Report, the Interim Receiver advised of information that had been provided to it by customers of the Companies regarding transactions involving the Companies in the sale of boats on behalf of customers without remitting the proceeds to the boat owner, or sales
of boats with financing encumbrances that have not been discharged and that now remain outstanding against the original boat owner (and possibly the boat). 25. The Interim Receiver has not been provided with any explanation by Steven Crate or management of the Companies regarding the information set out in the First Report, whether
by affidavit or otherwise, including the boat sales discussed in the preceding paragraph. The Interim Receiver was provided with a small stack of documents by the controller for the Companies that are said to relate to the boat sales, but without explanation or elaboration.
The Interim Receiver is reviewing those documents, but without an explanation of the underlying transactions the Interim Receiver has been unable to form a view as to what the documents mean as of the date of this Third Report. 26. Since the First Report, the Interim Receiver has been approached by two further customers of the Companies with further concerns, the details of which are as follows:

And:

The Interim Receiver has not been able to complete an independent review of the Companies’ records or with employees of the Companies regarding the advice it received as set out above. The Interim Receiver cannot accordingly verify the accuracy or lack thereof of
the information that it has been provided.

Marquis has also filed as to boat or boats on assignment and floor planned.

Just google Crate Marine Bankruptcy and all the documents are available. But it quickly turned from just bad to ugly. Can't say whether the end of Carver there but definitely the end of Crate.

The Crate family publicly stated that this only impacted the Keswick location and the other locations/marinas would not be affected. Even with a restructuring they projected continuing to lose over $1 million per year.

The father, Lloyd Crate, died in August shortly before all this broke loose.

The family quickly spoke at the time of filing to make it clear that the various locations were under separate ownership and not affected. That only the marine sales company was. That although the same last name there were no financial ties to Crate Marine Sales.

Oh, one boat was in the process of being shipped to Florida but Marquis got it held at the trucking company's yard.

Yeah, I'm sure I'd trust them. It's great that they were able to protect themselves with seperate corporations, but the smart boat owner will put as much distance as possible between their boat and any business this family is associated with,

They may not have done such a good job of protecting. One buyer alleged he wrote two checks per instructions, $103,000 to the business, $42,000 to an individual family member. I don't know Canadian law but with US law transactions like that can be used to pierce the Corporate Veil. Now I do believe the other businesses may actually be owned by different family members. The other thing is that transactions like alleged of selling boats and not paying the previous owner if tied to an individual can lead to legal ramifications for that person.

In the legal documents of another somewhat well known failed boat builder there were some key documents produced in court in which an employee testified as to the owner ordering her to falsify billing records.

I have tremendous sympathy with businesses that struggle and face bankruptcy. I also have my businesses in many separate corporations primarily to shield against any potential of a multi-million dollar liability suit of some sort (example and I knew this to happen to a retailer: Individual with Epilepsy has a seizure in the store, hits their head on a rack while falling to the floor. Dies and family sues the store for $20 million. Jury awards $15 million. Store files bankruptcy while appealing the verdict. Ultimately the verdict was overturned on appeal).

However, I do not have sympathy for dealers who sell things they don't own. There was a Florida dealer convicted of that in 2014. Not surprisingly his brother was convicted of the same in 2007. A Montana car and boat dealer was convicted in 2013. There have been others too I can't recall off the top of my head.

It reminds all to be careful who you're dealing with and their financial situation. However, in some cases that's nearly impossible. You have mayors and local people still praising this family. It would be bad enough if it was one boat involved, but several have been shown to be. It's very sad because some have paid for boats that they may now find they do not own.

Inventory located was $1.6 million less than shown on the books.

The last receiver's report I've seen was on December 8 and stated Mr. Crate had left the building (I don't know about Elvis) and wouldn't return his calls.

Another group of people possibly impacted is those who have already paid their 2015 slip rental. As normal, lots of innocent people impacted.

You were lucky as that's just the type situation others were caught in. One bought a boat but they had him pay full price and were going to pay him for his trade in after it sold. For one they actually somehow had him loan them money.

The problem with situations like yours is the time just keeps extending and you want to trust them for a long time. You wake up and realize finally that they're not paying. Two things can ultimately happen now that the courts are involved. The best situation is that they reach back into personal money to avoid any prosecution and pay off the involved boats. The worst is they'll refuse to cooperate and things will run through bankruptcy court with those involved getting pennies on the dollar.

The Marquis story on the boat that was being shipped got very involved and a bit humorous. There was basically a standoff so the boat still sits. Marquis was willing to provide an unsecured guarantee that the proceeds of the sale of the boat would be provided to the trustee once the boat crossed the border. That wasn't adequate for the trustee. Apparently, Marquis did have a sale for the boat in Florida. But it's almost like a territorial dispute. I don't know if the boat ever made it out of Pickering.

Often a smooth talker can talk buyers and sellers into agreeing to something they know deep down isn't right. But they're so desperate to buy or sell. Present yourself as an honest trustworthy local man trying to help them. All the factors (those who finance inventory) have seen this many times. That's why the good ones check HIN's regularly and when suspicious follow registrations. Sleazy used car dealers have long done it. Put the car on my lot, just sign the title and I'll hold it until the car sells and then send you the money. You can trust me. Some very smart people tend to lose their good sense when it comes to boats though and then are easily taken advantage of.

Hi Everyone, I just joined the forum site. I can provide some new information as a follow up to the Crates situation. Firstly, I have been a slip customer for 10 years. I am one of those customers who paid their fees in full, past November to the now bankrupt company. I did file a claim, but the reality is that I will never see anything from the estate payout, due to the debt being ridiculously high.

Some good news, is that marina has in fact been purchased by the original two creditors (previous/current boaters there as well as the main lenders to the Crate Family Business). This purchase was approved by the courts and on March 18, all bidding was closed. As such, there offer to purchase from the receiver was accepted and closes March 31, with official re-opening on April 1.

The marina has been renamed "Krates Keswick Marina). Original! Many of familiar faces are returning, which is great for the boaters, as these individuals truly were compassionate, professional and only wanted to serve us well. Unfortunately, some are not returning, who will be missed as they too were assests in making our time enjoyable.

However, we should have a great team operating the "new" marina and I believe they will do a great job.

As for some Crate news, I can say I heard from someone at the 1st creditor meeting, that when the matter of slip fees were mentioned, Mr, Steven Crate stood up without hesitation and stated " just call your credit card company and they will reverse the charges". That was the solution offered. We'll, for those who did not pay by c.c, that's no solution. Furthermore, there is guaruntee that cc companies would reverse such, although receiver reports states numerous reversals have transpired. For those not as fortunate, hopefully new owners will be understanding and compassionate about the matter if proper proof is provided.

It's a very sad situation, in that some family members, who honestly performed their duties and cared, we're caught in the middle of something that have destroyed their lives.

A family tradition, built by Lloyd's hard work and dedication, now lost in shame is really tragic. No need to re state what is in the receiver reports as its black/white the various actions of the previous owners. The amount of people affected by the entire situation is truly terrible. It's is baffling how deep the debt goes and the actions in general.

However, we as boaters stick together and support one another. Hopefully, those affected will find the best solution to their needs. For me, it's slip fees, and simply don't want funds back, rather not have to pay again.

The new owners, should be aware the numerous marinas on Georgian Bay are offering free slips for one year, to anyone who paid Crates in full and able to provide proof. With that said, I would hope the new owners honor it themselves to avoid loosing more customers to the Bay area.

We must now look forward to a great boating season and simply try our best to find resolution to each specific issue encountered. The matters before the courts will be handled accordingly and through such, those in situations noted in the forum will be rectified in due course to the best of our legal system. Hopefully, all positive outcomes for those individuals affected. I understand the frustrations and I am as well, with each situation different. Keep some faith in the legal system.

I look forward to seeing the new Krates Keswick Marina in action and confident that we will have a great operational team to look after our boating needs.