Steering the Ship to Calm Waters

The US RV, boat and motorsport vehicle industries fell on hard times in 2023 to 2025 as high inflation and escalating interest rates to finance the purchase of such items hurt sales for many operators throughout the US and abroad. This dynamic was in stark contrast to the lift in sales immediately following the 2020 COVID-19 lockdowns as ‘stay at home’ orders from virtually every state. From 2021 to 2022, these discretionary spend luxuries, began to sell at record levels throughout the US as consumers bought such products in abundance to escape their homes and enjoy outdoor activities without the feeling of compromising their health. Many dealers in these categories accelerated their sales during COVID which ultimately adversely impacted sales from 2023 to 2025. This led to the cash flow challenges for many participants in this industry.

Our client, a large boat and power sports dealer, was facing financial distress with a shortage of sales to fund their operations and keep current with high interest payments on over $33 million in debt as well as the curtailment payments required by the Floor Plan Lenders to offset the aging inventory. Inventory was also at record levels following the 2021 to 2022 tsunami of sales to replenish their yards with units to get ahead of the COVID related supply chain disruption. But the economy began to heat up and the Federal Reserve began notching up interest rates at a level that had not been seen in many years, and the impacts of inflation all had a devastating impact on the future of the business.

We went to work, preparing cash flow forecasts and developing the net asset position for the organization. The information helped to educate over 10 secured lenders on the situation, who overwhelmingly were willing to cooperate with reduced payments going forward as the business was entering into the seasonally slow (winter) period including deferral of interest and curtailment payments with the floor plan lenders. In addition, all spend going forward was focused on critical/’stay alive’ expenses only to keep solvent while a more in-depth restructuring plan was created. Of the approximately 100 employees on staff, furloughs were announced resulting in about 50% of the previous staffing levels. These swift actions led to cash solvency during the seasonally slow winter months while a sale strategy was crafted.

A significant portion of the success was attributed to effective and transparent communication between the owner operators, the restructuring team and lender representatives. Rather than a creditor/debtor-us/them relationship, we struck a collaborative approach with regular cash flow reporting, views into the bank accounts and updates regarding operations. Like all-restructuring matters there were hiccups along the way, but given the transparency, the lenders continued to work with us through the process and at times waiving or deferring interest and eliminating curtailments. We attribute much of the success to a unique approach to communication while advocating for a feasible payment restructure for our client.

In the spring of 2025 a buyer was secured, and a letter of intent was signed. As a result of positive cash flow through the seasonally slow winter months, the sale price was enough to pay off 100% of all secured lender obligations including unpaid interest and legal/professional fees, payroll, sales taxes, payroll taxes, and the other critical obligations of the Client. In addition, all employees were hired by the purchasing company, and most of the other staff was re-hired following the furlough. Personal guarantees by the ownership were also avoided after achieving a total payoff.