Buyers Trapped in Feud with Sunseeker...

There's a 219 page document out there that would change your view on that statement.

That's easy to say and I've said people should do different than they do. However, as a practical matter, it's hard to protect against all risks in buying boats. We do use an attorney on all large contracts. On one like this you need an attorney who knows commercial importing and who knows contracts with progress payments. How does one really protect themselves? Commercial letter of credit perhaps to the builder. Insurance on the build and delivery. Regardless of who you pay you can't really be sure what they'll do. I do recommend payment only to the builder but some builders aren't very stable. Even with Sunseeker, the owners had to see other major assets when the Chinese government forbid China banks from making private companies loans.

The industry does have issues with so many defaults over the years.

One other thing that can be done is to write contracts so that at every payment the buyer has a security interest in the boat up to his payments made amount. That makes it a secured asset in the event of bankruptcy or anyone else.

I've also expressed major concerns in the past over brokers who take trades. They need cash to make the payments to the builder. Taking trades is fine if they've got tremendous capital or lots of quick movement. However, when the boats you take in trade don't sell quickly, you can be in deep trouble. I would caution all on that as you're trading the boat to someone other than the builder. A better avenue would be to make the broker buy the boat from you as part of the deal. Most won't do that though. That tells you they are dependent on a quick sale.

Actually that document only indicates they believe Sunseeker knew how Obey was shuffling funds. However, it does not indicate that other than as told by Obey, Sunseeker had any way of knowing what the buyer had paid Obey or what their deal was.

I'd like to know where Kevin's trade is now? If sold, does that buyer have clear ownership?

New Boat Sales in Florida are not governed under the Florida Yacht Broker agreements. Obey was more than a broker however - He was a new boat dealer as well. Remember, in a brokerage transaction, the X% is the commission to the brokers, split however they choose. In a new boat sale Roby was collecting his cost to the builder - everything up and above that is his profit. The numbers in that document are not defined as Retail vs. Cost so it's hard to tell how Sunseeker is actually calculating the amount of money owed/squandered on his multiple real estate transactions and the boat in Stockholm.

This sale is very much covered under the Florida Yacht and Ship Brokers' Act.

http://www.myfloridalicense.com/dbpr/lsc/documents/statutes/Ch326Printed.pdf

This. I believe the audit request was due to Obey suing them for lack of payment for warranty repairs on all of the boats.

It was for multiple reasons. A major one was him continuing to do warranty service and sales after they terminated him. While he is claiming the warranty amounts due, right now the major gist of his suit of them has been attempting to get it to court rather than arbitration. We're still in the first year of litigation with many years still to go.

LOL ! Got to remember that Buffett quote. A shame the buyer was not protected from that squabble, assuming he was paid up as claimed.

I was actually pointing my criticism at the unnecessary lawyer bashing as my principal point. As an aside, some of your legal strategy is filled with pitfalls, IMO. That's why I reference competent attorneys. Also the purchaser much have had a lien to "arrest" the boat? Your comments seem to assume otherwise? Priority of liens disputes are resolved in court not on the dock when handing over the keys.

This thread shouldn't be about attorney's as gratuitously evoked. Lets return to the thread's subject.

Well, I didn't lawyer bash. All the legal strategy has pitfalls. My commercial letter of credit worked last time, done directly with the builder.

As to how the buyer had the boat arrested, I have no idea. I think all that has accomplished is putting it in limbo for the time being. It does prevent Sunseeker from reselling it. The Admiralty Court can have a boat arrested when it is the subject matter of a lawsuit as this one is. By doing so, the boat is now under the control of the court until the court is satisfied in releasing it.

The article does not state that the buyer had it arrested, only the fact that it was arrested.

I find it strange that this buyer is the only one whose name is publicly known.

Back to the thread.


We all only have an incomplete collection of facts here, but IMO, paying the broker directly, which may be the industry standard, even thru a draw account, escrow, or LC is asking for trouble, and may be a big part of the problem. Most transactions I am familiar with, the "broker" gets their commission at the close of the transaction. Additionally IMO progress payments should always be behind what the builder has invested plus another 10% subject to a delivery inspection and transfer. It may cost a bit more, but a builder who can't finance incremental build costs is in a suspect financial position, IMO. Everybody has to have "skin" in the game. Part of the negotiating weakness, I suspect may come from the luxury item, "I have to have it" mentality of the purchaser. Maybe the yacht industry has let it evolve otherwise, but have you ever paid a dealer for your car while it was on the assembly line?

Also, construction transaction often use "clean" letters of credit or bond as a guarantee of performance, not only as a purchase instrument. Again that adds a little cost, but effective. For instance, when a municipality's bridge contractor goes bust in the middle of construction, it calls the clean LC or bond that was part of the contract and finishes the job with another contractor (which generally cost more}. Since the builder has pledged some asset or paid some money, they are often loath to not deliver because they have real "skin" in the game and not just name recognition.

Whatever happened to the standard clause in the simplest of chattel contracts "Final payment to be paid upon satisfactory in place inspection and delivery....

My amateur 2 pennies....

The point here is that it's not a broker, it's a dealer. He buys the boat and sells it at a profit, or at least that's the idea. The actual process is obviously not that simple and can go South as it did in this case. So profit, not commission.

Obey says the buyer is his friend. His friend claims that Sunseeker did not credit him with payments. Apparently there was enough money paid to Sunseeker to finish the boat and have it displayed in the FLIBS. Not hard to verify the money to see who is playing right. Stand by, while they sort out who is doing what to who.

So answer me this - Paragraph 326.004, Line D states that a license is not needed to sell a new yacht. Without diving further into the document, if the license is not required to sell new yachts, how can there be rules governing the practices? Aren't the rules about New Yacht Sales governed in the Manufacturer's Dealer Agreement?

Yes, the rules are in the MDA but the law applies the same as do all the fraud laws. Your point is an argument a license isn't required. However, Rick Obey is licensed as a Yacht Broker and does practice under that license so is governed by the applicable laws.

Armed with some minimal proof, Like a boat trade, payments already made I would hire a lawyer to ask a judge for a temporary injunction. That freezes everything and not hard to get. and keeps the boat US jurisdiction until this mess gets unraveled in a court of law. That's why we probably know "the owner to BE's name". In my mind this doesn't hurt sunseeker that much, but hurts dealers and brokers...….the honest ones.