Hydropool Spa Bankruptcy

[michael22]

Interesting information on Hydropool Spas bankruptcy, particularly p. 20 of the Motion Record noted in the document link below.

http://www.richter.ca/Restructuring/Hydropool.aspx

Slightly different story than Hydropool corporate website http://www.hydropoolhottubs.com under the banner "Good News for Hydropool".

[JerimiahR]

So if I read that properly, Hydropool Spas owes $10.3million plus legal fees (page 25 of PDF, p23 of document, also labeled p12). They were forced to completely shut down their factory in December of 2009 because they have no cash, and all their supplier/vendors want money up front for any orders (COD). The last company director resigned on December 4th, 2009.

It appears the motion is speaking of buying them out for $3.2 to $4 million, even though the "Bank" is owed $10million by the company, and that doing so could save the jobs of "up to 172 people".

Hard economy for a smaller manufacturer to survive in. This is the kind of thing going on all over the country this last year or two.

[Poolman18]

Interesting information on Hydropool Spas bankruptcy, particularly p. 20 of the Motion Record noted in the document link below.

http://www.richter.ca/Restructuring/Hydropool.aspx

Slightly different story than Hydropool corporate website http://www.hydropoolhottubs.com under the banner "Good News for Hydropool".

Michael22 wondering how does this interest you being a new member just a few hours ago ?

[-20 h20 104]

no document on link, how do i get a copy.

[UK Arctic Dealer]

I heard about this the other day. Allegedly they have walked away from over $10million of debt and left suppliers, dealers and customers very angry and out of pocket. If this is true how can it be fair for a company to do this and then open it's doors the next day like nothing happened with new owners and no debt?

Obviously the fact that this has happened will never be told to new potential Hydropool customers who are looking to buy a new tub, just doesnt seem right to me.

[Pathfinder]

Havent read the documents but what thought I remembered was that Hydropool was bought buy a Private Equity firm, along the same kinda deal as Appollo did with Jcuzzi & Sundance.

[Poolman18]

Here is the news release from Hydropool......looks like all things are fine.

http://www.hydropoolhottubs.com/News/18/02...ancial-Partners!

http://eurospapoolnews.com/

[JerimiahR]

Found the PDF file in my Adobe Acrobat Cache. Here's the direct link:

http://www.richter.ca/downloads/pdf/insolv...015,%202010.pdf

I'm guessing they perhaps didn't intend for the documents to go public. That could be why they removed them from the listing on their site. However, they have not password protected the direct link. So it's still available for download by clicking above.

[Dano]

thats why you should buy A artctic spa,,,,,,,,

[UK Arctic Dealer]

Here is the news release from Hydropool......looks like all things are fine.

http://www.hydropoolhottubs.com/News/18/02...ancial-Partners!

http://eurospapoolnews.com/

While i hope Hydropool doesnt close down because...

it would be horrible for the employees to lose their jobs

i dont like seeing any decent tub maker go under

...things do not look fine at all and the news release from Hydropool clearly contradicts the court papers.

The court papers clearly state that the company was "insolvent" and was about to be served with a bankruptcy notice by the Bank of Nova Scotia.

The Hydropool news release says "The receiver never took possession of the company and operations were not suspended in any manner whatsoever.The plant shutdown before Christmas was a planned normal seasonal shutdown and had nothing to do with the ownership change".

However the official courts papers say "The respondent is without funds to continue to operate" and goes on to say "The only available alternative to the sale agreement is a liquidation of the respondant". Regarding the shutdown it goes on to say "In order to conserve liquidity the Company implemented a plant shutdown on December 10,2009".

The future doesnt look bright.

[SpaParty]

I would like to respond to these comments made about Hydropool. First, yes I am a Hydropool Dealer for many years. I have been on the phone with them the last few days and the facts are not 100 % correct as stated. First of all Hydropool has never been closed for business .This was a regular Christmas shutdown that was the same as every year. I have received several orders from them in the past month, actually received two tubs on Friday, all warranty claims have been accepted and paid in full. Not one dealer is out of pocket.

I talked to them in Atlantic City, where they had a booth and where displaying new products and launching the NEW Laz Boy line of Spas which also look great.

(Allegedly they have walked away from over $10million of debt and left suppliers, dealers and customers very angry and out of pocket. )……… RESPONSE: it is funny how this forum is used to bash other dealers and suppliers especially by new registered posts.

Hydropool did not walk away from $10 million in debt. It is just the opposite. Their long time bank decided to go in another direction and demanded payment at the low point of the year. This is what is happening out there with the leisure industry. Several Spa manufactures have gone under for good (Pacific & Tatum to name a few) Latham in the pool industry Chapter 11, Glendale RV in Ontario receivership. Some of these management teams decided to bail.

The management team at Hydropool and a supporting dealer DID NOT. The debt was bought out and new money put in. Remember this is what the bank accepted. How many management teams can raise this type of funds ($3-$4 M) in this type of environment? This tells me something about the quality of management and their dealers. This is a far cry from leaving dealers, customers angry and out of pocket!! As others have. And by the way saving over 160 jobs!! I would say that Hydropool is in better shape know than most others.

I have talked to suppliers over the last few days because some of our interests overlap , and they all understand and are continuing to do business with Hydropool and extending them terms and credit.

Yes the Hot Tub business is going through some changes and is challenging to say the most. I believe that there will still be a few others who will not make it. I have heard at the Atlantic City show that there are a few Western manufactures that are also having problems due to declining sales/warranty issues. There has to be as Northern American sales have gone from 500,000 units to around 180,000 . The best comments about the Spa business in general where listed by John Cioffi from Vita Spa’s

http://www.poolspaforum.com/forum/index.ph...amp;hl=vita+spa

I also am in the position that I can sell whatever Hot Tubs that I want. I have had numerous suppliers ask me to switch. Some of the deals have been incredible, but as another retailer told me “I have danced with a few suppliers, but I am happy with this company - no doubt about it.”

Just wish that people would get some of the facts correct before posting. If anybody would like to email me go ahead.

[UK Arctic Dealer]

Hi Spa Party,

You need to remember this is a forum about hot tubs and a spa maker with 25 yrs behind them going into receivership is worthy of a mention.

I just want to make clear i have read the court papers in full and i am only quoting from them word for word.

The facts are Hydropool has lost $9 million dollars over the last 3 years, defaulted on their bank loans and where threatened with bankruptcy proceedings by the bank at the back end of 2009. They also owed suppliers including Balboa and Waterway hundreds of thousands of dollars each. The bank accepted that they could close down Hydropool and get no money back or let this buy out go ahead and save jobs. I noticed the $3.2million sale price was paid for by "a note". Does this mean no money was actually paid and its an I owe you?

Anyway I wish both you and Hydropool all the very best for the future, as i said in my previous post its not nice to see the nice guys close down i just wish more of the bads ones would go bankrupt.

[spatech (the unreal one)]

Just wish that people would get some of the facts correct before posting. If anybody would like to email me go ahead.

The people posting here aren't making things up out of thin air. The responses are relative to the court posting about Hydropool, not some rumor one person is whispering to another.

I understand that you don't like how that reads but don't take the people here to task for what is in that report, none of us had any doing with what it says.

[Pathfinder]

There's nothing of real excitement about this. Its simply a total numbers game to eliminate debt. Corporations do it all the time. Kilmer Capital is a very prosperous Equity firm which could have easily funded hydropool. Hydropool was never in danger of closing. In these economic times everyone is looking to erase their debt anyway possible. What has transpired in these papers is something that is done everyday in the corporate world. I find it interesting that it was randomly posted by someone who has just joined and has posted nothing further as this document is not available unless you search hard for it.

[spatech (the unreal one)]

I find it interesting that it was randomly posted by someone who has just joined and has posted nothing further as this document is not available unless you search hard for it.

That is very true. Hydropool isn't everywhere in N.A. by any means so whoever posted it is probably in direct competition with Hydropool locally/regionally and joined this forum just to get it out there.

[SpaParty]

Exactly what I was trying to say !!!

[JerimiahR]

I have no personal knowledge of the Hydropool situation. But there is a stark difference between the Court Motion document in question, and the statement on Hydropool's website. I think it'd be interesting to hear what is/has really happened, just to clear the air.

If all that SpaParty has stated is completely true, it would indicate perhaps that there's some serious libel/slander type stuff in that Motion document. However, if the details in that Motion document are correct, it would indicate that perhaps Hydropool wasn't wearing the white hat with their statements. All that will eventually be sorted out in court in some fashion or another I'm sure.

I think we can all agree however, that it is sort of sniper-like of a person to register on the forums, post a link to bad business, and then never come back. However, as UK Arctic Dealer stated, it's decently sizable news when you hear this kind of thing about any player in the industry. So it's bound to get attention, be that attention desired or not.

[samboni]

There's nothing of real excitement about this. Its simply a total numbers game to eliminate debt. Corporations do it all the time. Kilmer Capital is a very prosperous Equity firm which could have easily funded hydropool. Hydropool was never in danger of closing. In these economic times everyone is looking to erase their debt anyway possible. What has transpired in these papers is something that is done everyday in the corporate world. I find it interesting that it was randomly posted by someone who has just joined and has posted nothing further as this document is not available unless you search hard for it.

I know relatively very little about Hot Tubs. I am on my second tub. I can maintain the tub and that's basically the extent of my knowledge.

I know a little more about balance sheets as I have been in the banking/investment field for 30 years. Even a quick skim of the Richter bankruptcy document listed earlier in the thread would lead one to the conclusion that Hydropool was in eminent danger of closing.

page 20- Balance Sheet- "The balance sheet reflects that: (1). the company has negative retained earnings of approximately $9 million reflecting a history of losses: (2). the company is highly leveraged, having approximately $18.8 million in debt and only $9.1 million of tangible assets; and (3). the Company has a working capital deficiency totalling approximately $7.9 million - it's current liabilities are approximately two times greater than it's current assets, resulting in a liquidity crisis."

Page 24- Urgency- "The company has a massive working capital deficiency - it is insolvent"

A business model that has generated the above financial situation is not sustainable. Name and ownership changes are cosmetic at best. Unless fundamental changes are made to the business model........sooner or later the large lady is going to sing!

[-20 h20 104]

Who has been hurt because of this and how much$$$

[Pathfinder]

Nobody

[spatech (the unreal one)]

Nobody

...other than maybe the people they owe money to.

[Pathfinder]

I guess I should have said no dealers or customers were hurt with this movement. Suppliers werent left out in the cold either since Aristech & Waterways signed new agreements. Basically Scotiabank lost out.

[-20 h20 104]

you mean every supplier is being paid???

[JerimiahR]

I guess I should have said no dealers or customers were hurt with this movement. Suppliers werent left out in the cold either since Aristech & Waterways signed new agreements. Basically Scotiabank lost out.

Let's keep in mind, if the "only victim" was Scotiabank, then we're all losing out. It's the same thing that happens to Credit Card Companies on a daily basis. Everytime someone fraudulently uses your credit card, good 'ole "XYZ Bank Inc" cancels the charges on your card, and pays them for you, writing it off as a business loss.

However, they don't do this out of the goodness of their own hearts. Have you seen credit card interest rates? The last several years credit card interest rates have been ridiculous. Granted the idea is to pay off your credit card monthly to avoid interest charges in the first place. But let's face it, many folks can't or don't do this. Therefore, the high interest rates they get charged are where these credit card companies pay for losses.

In the same way, Scotiabank is going to get that money somewhere eventually. Be it through higher fees to customers, higher interest rates on loans, lower interest rates on CDs & savings accounts, etc. Also keep in mind, much of the community charitable support comes from those with money. When these banks take large losses, they aren't able to give as much to their communities, and therefore their communities may suffer.

In the end, here's my point. Bankruptcy is bad. There's no nice way to put it. Someone is losing, even if suppliers get paid. Folks lose their jobs, communities can suffer, credit ratings are destroyed, on and on. Let's just keep in mind, we're not just talking about "numbers" here. There's a real effect on outside entities.

[Ralloi]

So this topic was fast and furious in 2010. What has been happening for the last 3 years? They are still in business....are they growing strong??