Boyse Bollinger

Donald T. “Boysie” Bollinger
CEO, Bollinger Shipyard
8365 Highway 308 South
Lockport, LA 70374

Statement for the Record to the:
U.S. Senate Finance Committee
November 14, 2007 hearing
Federal Estate Tax: Uncertainty in Planning Under the Current Law  

Chairman Baucus, Ranking Member Grassley, and members of the Committee, I am honored to share with you today my outrage with the federal estate tax, or “death tax.”   

I am the CEO and a major owner of Bollinger Shipyards, a 2nd-generation shipbuilding and repair company which serves both military and commercial marine clients.  Bollinger Shipyards was started by my father, Donald G. Bollinger, a man who had no college education and no capital.  With the rudimentary knowledge of shipbuilding that he acquired from my grandfather, Donald G. Bollinger built his first shipyard and the beginnings of the company in 1946.   

My father was guided by old-fashioned notions of integrity, hard-work and honesty – virtues that continue to guide our company today.  He believed that the disciplined life is much more rewarding than profligate consumerism, and this guided his approach to business.  Under his leadership, Bollinger Shipyards became an immensely successful enterprise and remains one of the last privately-held large shipyards in America.  I have always had great confidence that the business would continue to remain strong and expand under the leadership of a third generation.  That is, until I dealt with my father’s death tax liability in the wake of his passing.   

Because we reinvest our profits back into the business and have very low cash reserves, paying my father’s death tax liability was no easy matter.  If we had not constantly reinvested our profits and instead given ourselves larger dividends, it is unlikely that this would have ever been a problem.  While we have plenty of capital invested in our operations, we cannot simply sell these assets without considerable damage to the business.  These assets include our shipyards, the machinery which enables us to perform high-quality construction and repairs, and of course, the 3,000 employees who make our company a success.   

We quickly came to realize that the only way to keep the business and pay the tax was to liquidate my father’s shares while he was still alive.  We had already redeemed my mother’s shares after her death. The effect on the company has been dramatic, as these redemptions were the first time that substantial shares have been liquidated at one time.  Capital which has historically been available for reinvestment has been removed, leaving the company substantially weaker and less able to engage in profitable expansion. Additionally, my wife died at an early age and my young children inherited her stock with considerable taxes having to be paid out of insurance funds. 

Having learned from my wife’s, my mother’s, and my father’s experience with the death tax, my family and I are making considerable preparations for my estate.  I have (placed) willed most of my company stock in a charitable trust, with the hope that it will keep my tax liability lower and reduce the need to sell assets.  Of course, nothing is guaranteed, and I am still concerned that my family will not be able to hold the company together after my death.  In the meantime, these complicated estate planning techniques have made it difficult to bequeath stock to my children and are tying up needed capital for the business.    

Dealing with the death tax is a miserable way to go about business.  I should be exploring new markets and expanding my business, not tooling with expensive accounting gimmicks to keep my business from becoming a liability when I die.  When my children take over the business, I want them to realize the nobility of building a business the way my father and I did.  The last thing I want them to have to deal with is the misery of preparing for and fighting the death tax.   

Members of the Senate Finance Committee, please act on principle and support legislation to permanently repeal the death tax.