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Buyers Trapped in Feud with Sunseeker...

Discussion in 'General Yachting Discussion' started by YachtForums, Jul 29, 2019.

  1. YachtForums

    YachtForums Publisher/Admin

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    Saw this on the front page of the Sun-Sentinal. Six different buyers are caught up in this fiasco...

    https://www.sun-sentinel.com/business/fl-bz-yacht-buyers-caught-between-buyer-dealer-dispute-20190729-eiznpsdxdzfu7pmvvkjlqxp3mu-story.html

    Article posted below for reference...

  2. motoryachtlover

    motoryachtlover Senior Member

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    Buying used has it’s own issues but the more I read and learn buying used is less risky then buying new. I think when buying new legal representation is a must.
  3. RER

    RER Senior Member

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    It seems the broker is in a fight that they are probably going to lose. While I don't know all the details it's unacceptable for a broker to use client B's deposit money as leverage to apply pressure on the builder for the benefit of client A. Which among other things, appears to have happened in this case.
  4. olderboater

    olderboater Senior Member

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    Trade in's may play a big role in this too. Buyers using trade-ins as part of their down payments but Obey needing to send cash to Sunseeker.

    A reminding word of caution. I'm never going to contract with or make a down payment in the name of a third party on a large boat. Money only to the builder and only then after due diligence on the builder. It's scary enough even giving the money to the builder's US subsidiary or arm which has no assets to speak of and at least one builder tried to use that to their benefit to avoid paying.

    As RER pointed out, I also noticed Obey claiming Sunseeker had enough of their money to release the boat but not saying that they had been paid for the boat in question.

    Obey says they feel bad. Well, their responsibility is to pay Sunseeker for the boats. If they have other claims against Sunseeker, it is wrong for them to attempt to use what customers have paid to settle those claims. Entirely separate issues and funds should be segregated.

    If we were forced by a builder to use a dealer, then our check or transfer would still go to the builder. I'm not going to contract for a boat to be built with a broker. Broker should broker the deal but not be a party to it.
  5. motoryachtlover

    motoryachtlover Senior Member

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    Good information. Thanks
  6. German Yachting

    German Yachting Senior Member

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    This whole situation raises too many red flags from both parties even though most of the issue appears to be on Obey. I wonder the impact of this with their competitors. I could see some people going to Princess to avoid this.
  7. Scott W

    Scott W Member

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    Here's an example of US and state law being woefully under protective of consumer's interests. I bet the vast majority if buyers (notably those buying without the advice of competent maritime legal counsel) don't understand that FL law only requires boat brokers to be bonded for less than $30K. So, if you give a broker $300K in earnest money for a new build and they go tango uniform, you're going to have to get in line with all the other creditors for the other $270K. I personally would never buy a new boat with any kind of deposit going to a broker particularly when the value of the boat in comfortably in the seven figures.

    The line about Sunseeker's 'delayed responsibility (whatever that specifically is) could be troubling. Or, depending on the details, could be absolutely nothing. But, I'm not sure Sunseeker would want to let that allegation linger in a story from a mainstream newspaper like the Sun Sentinel without publicly commenting on it. A colleague purchased a new Sunseeker in the last couple of years through a US dealer. I'm not sure if he had the opportunity buy direct as it never came up in conversation. FWIW, he has been incredibly satisfied with the responsiveness of his dealer and the quality of the boat he received.
  8. olderboater

    olderboater Senior Member

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    Letters of credit can often help reduce risk too. In other cases one gets a security interest in the boat from the start of construction. Just get a good attorney when you're making such a sizable purchase.
  9. amgscrap

    amgscrap New Member

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  10. olderboater

    olderboater Senior Member

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    While there is not indication that this has an impact in this case, it should be noted that the Chinese governments pressure to reduce forward holdings may impact Sunseeker and Ferretti. IPO's have been rumored for both as has an attempt to sell Sunseeker. Both owners appear susceptible to exit strategies.

    However, I don't think this plays a role in the Obey - Sunseeker situation. Rather I think it's the tail end of a long relationship where a lot of money went back and forth and now each party trying to protect themselves as they wrap things up. There are no longer "next boats to catch up on". Rather it's a situation of leave a debt outstanding and fear you'll never collect it.
  11. RER

    RER Senior Member

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    Agreed. Sunseeker is selling, building, and delivering boats worldwide. I think as you say this issue is probably limited to Obey.
    With their business relationship over, it's understandable that Sunseeker wouldn't want to be in the position of letting these last few boats go before balancing the books.
  12. amgscrap

    amgscrap New Member

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    Agreed Obey dispute is probably because of the ending of a relationship. However those ordering new construction need to heed the advice of getting a good attorney knowledgeable in boat building especially in foreign countries. One also needs to do their due diligence in the financial strength of the builder to complete the build and honor the warranty.
  13. Capt J

    Capt J Senior Member

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    The issue is the builder hasn't been paid for the boats, but speculation and rumors and this article say that the dealer has been paid. There are other rumors that boats were sold to people outside of their territory and in another dealers territory. Other rumors that warranty charges to Sunseeker on warranty repairs were inflated. Rumors that payments to the factory got further and further delayed which this article seems to confirm. Rumors are that there are 5-6 clients who have bought new boats through Obey that are effected, they paid, but the factory only received partial and that there were around 6 boats ordered on spec. I know someone that got a great deal on one of those spec boats, boat was 3/4 finished at the factory and they got to customize the options they wanted on it. Rumors are that Obey was Sunseekers largest dealer (not sure if in volume or total $ amount). Other rumors that this is just the tip of the iceberg.
  14. olderboater

    olderboater Senior Member

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    One thing to keep in mind. To terminate one of your largest distributors is a very rare occurrence in the business world. I've seen distributors provide poor service for years and continue simply because of their volume. It generally requires something pretty egregious. This situation is likely just highlighting issues that led to that termination.

    Now, my advice to Sunseeker. Right or wrong, regardless of how this has transpired, you chose your distributor and you let them operate however they operated. You need to give in and deliver the boats if the buyers can show you proof they paid Obey and then you need to go after Obey if there's a dispute. Yes, you likely will be eating several million in doing so initially and while we often dismiss those amounts on huge companies, it could be greater than the annual profit of Sunseeker. Understand Obey doesn't care about the reputation of Sunseeker at this point. In fact, they'd like to see it damaged. Better involve their successor, who you haven't yet announced, now.
  15. captholli

    captholli Senior Member

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    Article in todays Ft. Laud. Sun Sentinel about a Sunseeker /Obey client having the U.S. Marshall service arrest his 76 ft Sunseeker @ FLIBS on Sunday to keep it from being moved to an undisclosed location while Sunseeker and Obey hash this lawsuit out. Client stated that the vessel was paid for in full before delivery and is now caught up in ongoing litigation. Unique strategy to have your own vessel or hopefully, soon to be your own vessel arrested.
  16. olderboater

    olderboater Senior Member

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    It is sad he's having to do so, but I don't blame him. For them to put him in this situation is inexcusable and it is for both of them, regardless of who is right. The fight should be between Sunseeker and Obey and over money and they should give this guy clear title on the boat. In no way does it weaken either's position. Their fight is over money. Let the guy have his boat.
  17. captholli

    captholli Senior Member

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    Hard to believe that Sunseeker would have any of these disputed payment boats displayed at the show where the clients could actually visualize their millions of dollar purchases sitting in the water all dolled up for the show just inches away from stepping aboard and taking delivery, That certainly would push me over the edge to just throw in the towel on yachting and reinforce why I bought the 2nd home in Telluride in lieu of the yacht, the real-estate has less headaches and will appreciate in value.
  18. Beau

    Beau Senior Member

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    Purchaser is probably already fortunate enough to have multiple residences. Purchaser had the boat arrested to put it in protective custody, IMO. I suspect purchaser hasn't completed what
    might become a very aggressive claim back against the principals in the LS - new owner of Sunseeker after punitive damages are awarded?
  19. bayoubud

    bayoubud Senior Member

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    Good for the owner, arrested the boat, haha! So, who maintains the boat that has not been delivered? Complicated deal, shame on Obey and Sunseeker for no delivery!
  20. Scott W

    Scott W Member

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    All indications are that 'Rick Obey & Associates' is no longer in business, which of course is an additional complication for the buyer. It's just fascinating - and sad - that the buyer didn't use a letter of credit.

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