First Marine chief leaves trail of angry creditors Shipyard afloat in controversy

October 14, 1990|By John H. Gormley Jr.

From New York to Norfolk, people are angry at Dannie B. Hudson, president of First Marine Manufacturing Inc.

In the nine months that First Marine has operated a Fort McHenry-area shipyard in Baltimore, the company has accumulated $2 million in debts to suppliers along the East Coast, according to court records. In July, the company filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code.

Mr. Hudson says he is as much a victim as the employees and suppliers First Marine has had trouble paying. He blames his difficulties in Baltimore on the failure of the U.S. Maritime Administration to pay him for work done on government-owned ships and on mismanagement by an associate who handled the company's financial affairs.

Interviews with people who have done business with Mr. Hudson reveal him to be a highly skilled man who knows how to fix ships, but a poor manager.

Mr. Hudson's critics -- including some former close business associates and former employees, as well as creditors -- go much further, describing a man with a history of business difficulties that they say made what happened at First Marine in Baltimore predictable.

"He did the same thing in New Jersey. He keeps folding up and changing his name," said William Fairing, a former vice president of First Marine who now operates his own ship-repair business in Hampton Roads, Va.

According to suppliers and associates, Mr. Hudson operated two companies in New Jersey until he moved his ship-repair operations to the Norfolk, Va., area in 1985 and founded First Marine Inc.

Mr. Fairing, who was then in his mid-20s, said he originally was listed as president of the new company to enable First Marine to establish credit from suppliers.

"He was using my name," said Mr. Fairing, who was First Marine's vice president when he left in January.

"He hung everybody out to dry," Mr. Fairing said of Mr. Hudson's suppliers in New Jersey. Mr. Hudson continued the same kinds of practices in Virginia, he said. "He's got everybody by the short hairs," Mr. Fairing said.

Mr. Fairing's account was supported by another former First Marine employee familiar with the company's payment practices in Norfolk before Mr. Hudson opened the Baltimore shipyard.

Mr. Hudson sometimes refused to pay suppliers who wouldn't extend his credit, said the former employee, who quoted Mr. Hudson as saying, "If you can't get it from them on terms, don't pay them anymore."

An electronic search of court records in New Jersey at the request of The Sun turned up five court judgments won by creditors for debts owed them by two companies Mr. Hudson owned and operated there -- Turbine Enterprises Inc. in Elizabeth and Steamship Research and Development Inc. in Perth Amboy.

The largest of the judgments, for $850,000 to be shared by three companies, has been settled, although for less than the full amount, Mr. Hudson said.

At least two court judgments have not been paid in full. The state of New Jersey won a judgment in 1988 against Turbine Enterprises for unpaid taxes. Mr. Hudson said that judgment also has been settled.

A spokeswoman for the New Jersey Treasury Department said recently that though Mr. Hudson has paid $4,000 to cover the sales and income tax debts, he still owes almost $24,000 in corporate income and property taxes.

Mr. Hudson was notified in September of the taxes still due. "We're giving him one last chance to pay. Otherwise, we will pursue it in the Virginia courts," the spokeswoman said.

In April 1987, the Superior Court of New Jersey awarded Schlecter Industrial Supply Inc. a $8,124.40 judgment against Turbine Enterprises and Steamship Research and Development. The judgment has never been paid to Schlecter, however, said Alan Schlecter, the company's president.

"He just folded up and left" without paying, Mr. Schlecter said. "He left town and stuck a lot of people."

"This Dannie Hudson has no concern for mankind. He talks down to people, he yells at people, he swears at people. The man is bad. He really hates people," Mr. Schlecter declared. "If he's not stopped, he's going to hurt a lot of people."

But Martin Katzenstein, the head of L. Katzenstein & Co., a New York supplier of parts for steam turbines, remembers Mr. Hudson as "a damn good mechanic."

"We need him up here," he said. "He was very good at what he did, good at telling people how to fix things. There's not many of these people left anymore."

A former business associate of Mr. Hudson's in New Jersey who asked not to be identified said the First Marine turmoil in Baltimore could have been avoided if anyone had investigated Mr. Hudson's business history. "As far as I'm concerned, knowing his background, this never would have happened," the ex-colleague said.

He added that though he is not sure whether Mr. Hudson meant to do any harm, "I just wish he'd go away and not hurt anybody anymore."

Mr. Hudson is much more likely to be found in the work areas of the Fort McHenry-area shipyard than in the office.

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