American Tug Doom Spiral Was Even Worse Than It Looked

From Healthy and Debt-Free to Broke in Three Years

Peter Swanson Jul 27

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American Tug weathered the Great Recession and Covid 19 Pandemic without ever stopping operations or missing a rent payment, according to news articles. When the La Conner company was acquired by Kadey-Krogen in May 2023, it was building boats and reportedly had no debt.

No one characterized the acquistion as a rescue, described instead as a synergistic union that would help both trawler brands grow.

As recently as February 2024, President and co-founder Kurt Dilworth was still bullish, as he spoke to marine writer Norris Comer:

Our shared resources both from engineering to interior design work and then hopefully, at some point, assembly and building expertise will start to mesh. Who knows what that’ll bring?

From the American Tug standpoint, no one dreamed it would bring doom. The AT bankruptcy would not be the reorganize-and-keep-working Chapter 11 type, but straight to liquidation. In Chapter 7 bankruptcy assets are sold and creditors repaid, usually for pennies on the dollar all around.

When the Krogen executives filed bankrupcy papers earlier this month, American Tug had four boats in various stages of production.

According to the bankruptcy filing, progress payments for these boats totaled $1.5 million during the first six months of this year. Based on the price and reported stages of completion for the four vessels—two 435s and two 365s—American Tug could have collected another estimated $1.7 million if they were completed by the end of 2026.

That’s an estimated $3.2 million in revenue, even if no new boat were ordered.

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This would have been down from the roughly five-and-a-half-million totals for 2024 and 2025, but why would 2026 have been less survivable than the Covid years, during which only one boat was being built?

This is undoubtedly one of the questions that Joe and Tana Ganete of Gig Harbor, Washington, were asking when they convinced the Skagit County Sheriff’s Department to investigate the American Tug insolvency for potential fraud.

American Tug Buyers Go to Police with Fraud Claims after Kadey-Krogen Bankruptcy Peter Swanson   ·   Jul 12 Read full story

The Ganetes have put $700,000 down so far on one of the 365s under construction. They like the other three buyers are considered “unsecured creditors” under the bankruptcy—pennies-on-the-dollar people.

In the nine months since the acquistion, three boats were sold, according to Kadey-Krogen President Tucker West, as quoted in a magazine article. Based on a stated 25 percent completion, the fourth boat being built was likely since that January 2024 article in Soundings Online.

Other questions suggested by the AT bankruptcy filing include:

• If the company had no debt in mid-2023 and earned revenues of more than $5.5 million in 2024 and 2025 and $1.5 million so far in 2026, why does the company now owe $1.1 million in unsecured claims—a figure that does not even include the four boat buyers?
• Why does American Tug owe about $588,000 in unpaid state and county taxes, going back to fiscal year 2024-25?
• What was the purpose of 20 payments, totaling $499,000, from AT to Kadey-Krogen in the 90 days before the bankruptcy filings? The required look-back under bankuptcy regs is 90 days; what were the amounts and the pace of inter-company before that?
• What is the story with $177,000 in loan payments to third parties in those final days and thousands of dollars in credit-card reimbursements to Tucker West?

$499,000 Transfered to Kadey-Krogen Yachts

American Tug declared bankruptcy at the same time as Kadey-Krogen, as part of the Krogen group. Krogen President Tucker West described the financial structure of his company up to and after the AT acquistion. He said Krogen had just created a third brand, Summit Motor Yachts.

West describes Krogen’s move to private equity funding ahead of the American Tug deal in an interview published by Soundings Online in January 2024:

Soundings Online: Soon after Summit was created, in 2021, the Kadey-Krogen Group had more changes. Tom Button retired and Larry Polster moved into a sales role. That’s when you moved up to president and CEO, with growth-equity capital to help the transition, right?

Tucker West: That’s correct. I ended up finding the first guy I ever met when I moved to Rhode Island in 1978, one of my best friends. He’s in private equity. He put together a group to buy out Tom and Larry. The group owns 67 percent and I own the rest. They’re silent partners. He doesn’t know the difference between port and starboard or bow and stern, but he loves coming on the boat if somebody who knows what they’re doing is running it. It’s great because he’s got strengths with financials, which is not my strong suit. It’s been a really, really good setup.

Tucker West signed the bankruptcy filings, but Gavin M. Gray is listed as having served as sole manager of Kadey-Krogen and American Tugs through KKY Holdings, whose voting members included three investors 2820 Partners LP, Yellow Leaf Investments LLC and Summit-KKY LP.

Any police investigation into the surprise bankruptcies of these two quintessential trawler brands is going to run into the challenge of gathering evidence to show criminal behavior and/or criminal intent. And, even then, what may look like nefarious conspiracy at first glance can often be later explained as simple incompetence.