When the economy struggles, it’s usually the most vulnerable who suffer first. People already struggling to get by can lose their jobs, their homes, and everything they have faster than someone who has savings, assets, and money in the bank.
Still, when upper-income consumers cut back on spending, that has a real effect on companies that make products sold to wealthier people. Or, to put it more bluntly, while nobody has any sympathy for the wealthy person who cuts back on lobster consumption, those cuts impact fishermen, grocery store chains, and lots of people who may not be shelling out for lobster themselves.
“The top 10% of earners in the U.S. accounted for nearly 50% of spending in the second quarter, the highest level it’s been since this data first started being collected in 1989, according to Moody’s Analytics.
Rich people drive the economy, and when they cut back, less wealthy people lose their jobs.
That’s what’s happening as Kadey-Krogen Yachts has filed for Chapter 7 bankruptcy and plans to liquidate its assets, according to filings on PacerMonitor.
Kadey-Krogen Yachts files Chapter 7 bankruptcy
Unless you’re traveling in yachting circles, you may not know the Kadey-Krogen brand.
“Kadey-Krogen Yachts began in 1976, when the idea of bluewater cruising was just taking hold in the wider recreational market. It was the idea of an efficient, safe, and comfortable cruising trawler yacht that set the company apart,” the company shared on its website.
Essentially, the brand built yachts for individual buyers that used commercial shipbuilder standards.
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The company built yachts designed to be able to stay at sea for long periods while weathering nearly any conditions.
“The Kadey-Krogen 54 is a long-range trawler with a cultlike following of cruising fans,” according to Passagemaker, a yacht cruising industry trade publication.
“The 54 was also a bit of a pioneer…Her design could take her anywhere. Patty (Hull No. 7) was delivered to the French Riviera after a 24-day, 4,800-mile journey across the Indian and Atlantic oceans. Overall, eight hulls were built,” according to the magazine.
The company, as you might imagine, served a very specific audience, and the struggling economy led to its filing.
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Kadey-Krogen Chapter 7 basic facts:
Kadey-Krogen’s fortunes have been in decline for the past few years.
“The company’s own filing sets out the scale of the downturn. Gross revenue was approximately $14.9 million in 2024. That fell to around $10.1 million in 2025. For 2026, at the point of filing, revenue stood at just $403,962,” PowerBoat.News reported.
No official statement had been issued by the company as of publication, and its website remained live without any notice to customers or owners.
- Founded in 1976 by naval architect James Krogen and partner Art Kadey, Kadey-Krogen built a reputation for long-range, ocean-capable trawler yachts designed for passagemaking rather than speed, according to its website.
- The company was based in Portsmouth, Rhode Island, and over nearly five decades built almost 700 yachts, becoming one of the best-known names in the passagemaking community.
- Kadey-Krogen Yachts LLC filed for Chapter 7 liquidation on July 6, 2026, in the U.S. Bankruptcy Court for the District of Delaware (Case No. 26-11065), according to PacerMonitor court filings.
- Parent company KKY Holdings LLC also filed for Chapter 7 on the same day (Case No. 26-11064), indicating the bankruptcy involved the broader ownership group, according to a separate PacerMonitor filing.
- Court records also show American Tugs LLC, which Kadey-Krogen acquired in 2023, filed a separate Chapter 7 petition on July 6, according to documents also filed on PacerMonitor.
- Chapter 7 is a liquidation proceeding in which a court-appointed trustee takes control of the company’s assets and sells them to repay creditors.
- According to bankruptcy filings, KKY Holdings listed $1 million to $10 million in assets, $1 million to $10 million in liabilities, and 1 to 49 creditors.
What does this mean for Kadey-Krogen customers?
The Chapter 7 filing broadly means that anyone who placed a deposit on a boat will be at the back of the line when it comes to creditors.
“When a business takes a customer deposit, it usually means the business will provide goods or services later. In bankruptcy, these deposits can become a point of contention,” according to the Thames Markey law firm.
That’s not good news for people waiting on a boat from any of the KKY companies.
“Courts often consider these deposits as unsecured debt. This means customers join other general creditors in line to get paid. They do not have special priority over other creditors,” the law firm added.
BDO USA echoed that explanation.
“Consumers who are owed refunds of their deposits have to get in line and compete with the retailer’s other creditors for any cash that is available. In many cases, however, there is nothing the consumer can do but accept the fact that they have lost all or most of their deposit paid to the bankrupt business,” it shared on its website.
