There were a lot of subterranean rumors flying around the show in Annapolis last October about big trouble at Gunboat, so I wasn’t too surprised when the company announced the following month that they were filing for Chapter 11 bankruptcy (to reorganize rather than liquidate). Boatbuilding has always been a skin-of-the-teeth business and Gunboat had suffered a string of misfortunes, what with its messy legal dispute with its ex-build partner in China, the tragic abandonment of hull number one of the new Gunboat 55 series, and the dramatic capsizing while racing of the hot new foiling G4. I figured they’d cut a court-supervised deal with their creditors and get on with it. So I was a bit taken aback when I learned yesterday that the company will be sold at auction and that Peter Johnstone, its founder and sole owner, has stepped down as president.
The sailing industry is pretty small, more like a family than an industry really, so of course I’ve heard a lot of stuff about Johnstone over the years. Competitors and some people he’s done business with will tell you he’s a hard case, and I’m sure he can be, but in my dealings with him as a journalist he’s always been cordial, a perfect gentleman, and most importantly forthcoming when things go wrong. I’ve also watched him over the past 15 years, starting with one boat he built for himself and his family, build Gunboat into the premiere brand in sailing multihulls while also creating an important new market for very high-end high-performance cruising catamarans that didn’t really exist before.
So to me this seems like a sad moment, and the end of an era.
Talking to Johnstone today, he explained his departure from the business wasn’t simply a case of pissed-off creditors who didn’t want to deal with him anymore. Rather he himself is one of the company’s big creditors and owns the North Carolina property on which it operates, so now sits on both sides of the fence when it comes to reorganizing things.
“I have diverging interests in bankruptcy,” he said. “There’s a serious conflict of interest.”
It seems Johnstone’s priority right now is simply to see that the brand and all he has created somehow survives. He has invested more of his own funds to keep the company operating through its sale to a new owner, and under its new president, Barry Carroll (formerly of Carroll Marine, who joined Gunboat as chief operating officer seven months ago) Gunboat is in fact continuing to build boats. According to Johnstone, a Gunboat 55 and a Gunboat 78 are under construction in North Carolina and a second G4 is in the works at Holland Composites.
Does he hope to play a role in the company under its new ownership?
“I’d love to be involved,” he told me. “But most likely it would only be on a consulting or advisory basis.”
He noted also that at present, per agreement with the new management and the bankruptcy court, he is continuing to manage Gunboat’s brokerage business.
He declined to comment when I asked him what he thought he might focus on next, saying only he needed time to process all that has happened.
We did also discuss an incident I hadn’t really twigged on when Johnstone first mentioned it in passing when he announced Gunboat was filing for bankruptcy protection. This being a rather messy collision between the G4 foiling cat and a photo chase-boat being driven by Sailing World editor-in-chief Dave Reed during Sailing World’s Boat of the Year tests off Annapolis last fall.
According to Johnstone, who was aboard the G4 during the collision, Dave Reed drove the chase boat up under the cat as it was foiling in hopes of getting a hot “under the hull” shot. As he saw things, he said, Reed had turned away to talk to his photographer just prior to the collision. The impact was such that one of the G4’s rudder foils cut deep into the engine block of the chase boat’s outboard. The chase boat, a RIB, was totaled and the G4 suffered serious damage.
Johnstone estimated it cost between $50-100K to repair the G4. This being yet another arrow of misfortune suffered by Gunboat, as Sailing World was able to evade all liability, thanks to a very draconian release they require all BOTY participants to sign.
“They even came after us for the loss of the RIB,” exclaimed Johnstone. “I couldn’t believe it.”
“And then they didn’t even give you a prize!” I exclaimed in return.
“No, they didn’t,” laughed Johnstone. “I think that’s probably the last time I’ll be doing the Boat of the Year contest.”
(For the record: the G4 did win a 2016 Best Boats award from SAIL Magazine, a process in which I was personally involved.)
You can read a lot more about this collision in Sailing Anarchy’s very interesting forum thread on Gunboat’s woes. Needless to say, you’ll also find lots of heated opinions there, both about what an a-hole Peter Johnstone is and what a visionary he is. Ironically, the forum in which this thread appears is sponsored by Hudson Yacht & Marine (HH Catamarans), the Chinese builder that, according to Peter Johnstone and Gunboat, is largely responsible for Gunboat’s current plight.
Finally, at the risk of seeming callous, I can’t help but stick in an old joke here:
What did the boatbuilder who just won the lottery say when asked what he would do with the money???
He said: “I guess I’ll just keep on building boats until it’s all gone.”