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Buyers Trapped in Feud with Sunseeker...

Discussion in 'Sunseeker Yacht' started by YachtForums, Jul 29, 2019.

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  1. bayoubud

    bayoubud Senior Member

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    All legal trickery. From what I've read here on YF no way would I get involved with a foreign built boat deal, not worth the risk. Buyer beware!
  2. amgscrap

    amgscrap Member

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    I know when I bought my Sunseeker about 10 years ago, the contract provision said the dealer had no responsibility for the warranty, only Sunseeker UK and all disputes shall be litigated in the UK. No mention of Sunseeker USA
  3. RER

    RER Senior Member

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    If Obey applied their buyer's deposit to Sunseeker warranty charge backs that explains where some of the money went but it certainly does not legitimize that move.

    If Sunseeker agreed to that then Sunseeker received the buyer's funds and used it to pay Obey for warranty work. If Sunseeker did not agree then did Obey raid his trust account to pay himself?

    Most brokerage purchase agreements in CA and FL contain an arbitration clause. I have not seen a Sunseeker new boat purchase agreement. In this case that would probably be a formality, then on to court.

    The jurisdiction decision is made first. Then, I can see the attorney's fees in this case possibly exceeding the value of the loss. What a mess.
    Last edited: Feb 18, 2020
  4. bayoubud

    bayoubud Senior Member

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    Pretty much standard nowadays. The legal billing system is designed to generate real income, one email/communication can generate multiple charges, can out pace any loss you can generate.
  5. bliss

    bliss Senior Member

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    I buy used, usually. Once when I bought new I put the contract and other paperwork in my briefcase and said I would read it all at my leisure and return shortly; which I did. I returned with handwritten agreements with a local state venue, a death and disability clause, and no arbitration clause. and some other stuff I don't recall. Additionally, I brought a check that was smaller than suggested. The owner of the sales firm accepted which left me thinking I PAID TOO MUCH!
  6. olderboater

    olderboater Senior Member

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    Yes, and no. If they'd actually been dealing with Sunseeker International, in the UK, then would be easy enough to sue and recover from them if such a problem arose. Plenty of attorney's there. The problem is that the buyers bought from Obey. They were a stocking dealer ordering many boats, some already sold, some not. If you pay Lowe's $2000 for a Samsung washer and dryer and they fail to deliver, you don't seek to recover from Samsung. In fact, the set up would be similar. You'd have Samsung USA as a Distributor of Samsung, selling to Lowe's.

    Problems arise when dealer runs a form of a Ponzi scheme, just like when a builder does so, using your money to pay for the last guy's boat and the next buyer's money to pay for your boat and it all works, until the arrangement ends. That's when the proverbial s... hit's the fan as the shortfall is revealed. In this case you had comingling of funds with all the buyers and all the warrantee claims and no segregation of your funds.

    Many elements in this situation that were poor. The buyer had no control over what was becoming of their funds. On top of that they were paying well in advance. Then on top of that, they had no security interest in the boat itself, the one being built. It is common when dealing directly with a yard to do one of a number of things. One is that you have a security interest in the boat in production. You may not recover all you spend but you at least are left with something. Another is a performance bond.

    I wonder whether the buyers used attorney's to review what they were doing. I can't imagine a lawyer saying it's ok to give a dealer millions along the way and have no protection. See, the buyers were 100% depending on Obey delivering and Obey was depending on Sunseeker USA and Sunseeker USA was depending on Sunseeker International. You contract with any dealer for a new boat and you're in the same situation. You don't buy a Sea Ray from Sea Ray or Brunswick. You don't buy a Princess from Princess. Yet often people assume that there's this solid company behind it.

    There are a dozen more pitfalls in the whole scheme of building or buying a boat. Some simple, some major. You pay for percentage of completion so when the engines are put in a boat, you pay the builder. However, has the builder paid the engine manufacturer for them? Or do they still have a lien attached?

    There's an ugly additional case involving a Sunseeker and Obey and this one involves MTU and Rolls Royce. Marine Consulting (Obey) sued MTU USA, MTU Germany, and Rolls Royce Power Systems. Obey sues for loss of value over extended time MTU took to make warranty repairs. Let's just glance at some of the defenses. 1-Obey has no standing as they were not holder of the warranty (only Sunseeker was and the ultimate end consumer will be under an agreement) and Florida is the wrong jurisdiction as MTU America isn't a Florida company (Delaware corporation with principle place of business in Michigan), and MTU America also isn't a party to the warranty. 2-The warranty agreement specifically bars damages for loss of value.

    That brings us back to an essential part of any deal, know who you're dealing with. Difficult to do but can be critical to know their history. Look for their court cases. Listen to their competitors at least a little. Yet, today, there are people buying boats from Obey and today there are people buying Sunseekers through other dealers in the US and they're oblivious to all this and don't seem to care. Probably won't care, until next time.
  7. olderboater

    olderboater Senior Member

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    Or any other states? Or any other businesses? In Florida, Auto Dealers must be bonded. That's right. They must have a $25,000 Car Dealer Bond. Dealer with sales of $20 million has a $25,000 bond. What protects you? Reputation of dealer and that manufacturer can pull their agreement but that's about it. Let's note that Sunseeker had pulled Obey's agreement, or attempted to.

    I think ultimately we're shocked to find out as consumers how little protection we really have.
  8. amgscrap

    amgscrap Member

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    Agree with you 100 percent Oldboater. An Attorney can at help to protect I was more referring to warranties. Almost all dealers transfer the responsibility to the boat builder and almost all boatbuilders have a venue provision that requires all lawsuits be brought in the country of the boat builder. Thus very difficult to recover. In reality our consumer protection laws should prevent this. If they know it is coming to USA, they should be responsible in the USA
  9. olderboater

    olderboater Senior Member

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    As an aside, two weeks ago we ordered a boat to be built by an Italian Builder. All the contracts are governed by Italian law and we engaged an Italian attorney through our US attorney. We will take delivery in Italy. Everything Italian. At least no question of jurisdiction.
  10. Gratitude

    Gratitude Member

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    OldBoater, are you an attorney? You touch on some very valid points. When I was looking to purchase at the 2019 FLIBS, I was warned by a fellow dealer regarding Sunseeker. At first I thought it was the competitor bad-mouthing the competition. In hindsight, that dealer was telling the truth. And when I go back to how it was said (tone of voice) they were sincere in their words.

    At the end of the day, what happened to Turner's original trade? Did he trade that in AS WELL AS hand over all that money? Doesn't seem logical. Why hand over a trade before receiving the other boat, especially with such a large deposit. OldBoater is correct. Do your due diligence before any such deal.
  11. bayoubud

    bayoubud Senior Member

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    Everything I'm reading here along with a few other threads such as this, says buy any new or used brand boat you like as long as it is in the USA with a clear title without the expectation the builder, dealer, or broker will make any warranty repairs or manufacturing discrepancies right unless money is deducted or escrowed to cover any discrepancies and recommendation's after surveys and seatrial, like any typical boat deal. Just my 2 cents, murky waters out there.
  12. olderboater

    olderboater Senior Member

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    Somewhat. Only problem is those boats aren't always available in the US. Plus there are US builders whose warranty service you can completely depend on. Hatteras, Viking, Westport are three who come quickly to mind.

    As to new builds, I'd far rather the builder use brokers than dealers. That way you are buying from the builder and the other party is just a paid sales organization, no intermediary owner of the boat.

    There's just something terribly upside down when you pay someone more money than is their total net worth.

    Toss into this that we still do not know what impact Brexit will have on the UK boating industry. Depending on who you ask, the answer may be no impact or it may be devastation.
  13. HTMO9

    HTMO9 Senior Member

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    The Brexit will have some if not a lot of impact on the British yachting industry. The negotiations between the Boris Johnson administration and the EU are not very promising. The biggest problem are not the tariffs on future deliveries to Europe. The biggest problem will be the supply of materials and equipment produced in the EU. They will not come on time and they will be more expensive. And last but not least the EU certicifation. The British notifying body has already opened an office in Ireland to provide British boat builders with CE certifications in the future. I do not believe the EU commission will swallow this bitter pill. I am in talks with a British yard about a newbuild (a CE certified tender) at the moment, which will be delivered after the 31. of December 2020. The Yard is working pretty hard on the regulatory part of that project, especially under the aspect, that nobody knows, wheather we will have any rules after 31 dec 2020 at all. The yard did not sell a single boat during the Düsseldorf Boot 2020 because of these problems and my contract is under the reservation of the CE certificate also.

    "Yesterday we stood at the precipice, today we made a step forward". The financial world in GB is dreaming of the return of the British Empire, they are singing already "Britannia rules the waves" again. They mind find out, that in the future, GB will only be a little Island in the North Sea. I hope the reason will win. GB may have left the EU but they will hopefully be still a part of Europe.

    Just my two (Euro) cents
  14. wdrzal

    wdrzal Senior Member

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    This is a couple questions; lets just say your new boat is either Italian, German,Chinese or French built ? Would language difference's in law be a real concern ? Is there insurance available to protect you 100 % on top of a performance bond ?
  15. bayoubud

    bayoubud Senior Member

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    Totally agree on buying USA built boats with the dependable warranty service, my point exactly plus better if building new to avoid the risk of using foreign builders. Dealing direct with the US builder would be preferred. Not sure what role a broker plays in new builds.
  16. olderboater

    olderboater Senior Member

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    One is never protected 100%. If they went out of business and it cost us more to get it finished than it would have cost them, then there's a loss. Language isn't an issue as we got a professional translation and a local attorney. We built in good protections and by doing everything there, dealing only with the builder, taking delivery there, we've significantly reduced the variables.
  17. olderboater

    olderboater Senior Member

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    Many of the type boats we and others want are not built in the US. It's just not an option.

    Broker's do play roles in many new builds, but I'm just not willing to go that way. I'm happy for them to get their commission, but they are not a principle in the deal. Ultimately, the fewer parties involved, the happier I am. I'm ok with others helping with the deal but not being parties to it.
  18. Capt J

    Capt J Senior Member

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    According to what I read, his old boat was traded in, long ago.

    I’ve had owners trade in their old boat with the proceeds to be used for the down payment of the new boat. 2 owners in the past year actually and both boats worth between $1-2 million, and delivery dates of 6-12 months out on the new one. One was really happy to see the one go and saved $30k a month in expenses while the new one is being built. The other was sad to see the current boat go because his June delivery date suddenly became September!!!!
  19. German Yachting

    German Yachting Senior Member

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    Since Sunseeker’s reputation is becoming somewhat tarnished here, what’s the alternative? Seems that many do not like Princess build but then they use Viking for service in the US which is probably the best Euro maintenance you can get. Ferretti doesn’t seem to have a large presence with their fly bridge range but the Pershing line does well. You have Absolute which has made headway but then you are tied with IPS. Fairline is making a comeback and the new Squadron 68 looks nice but a smaller builder so more risk from that side. Lastly (and purposefully leaving out Azimut), I would see Monte Carlo Yachts that have a large parent owner but they have only been around 10 years and not many hulls in the US. As Olderboater said, there are not many US builders that meet the design/price characteristics as these Euro builds and nothing really comparable coming from Taiwan.
  20. olderboater

    olderboater Senior Member

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    You may have to deal with someone with a less than stellar reputation but do so on your own terms. Or you may have to compromise on the boat you get in order to feel safer.

    There are a lot of builders throughout Europe and don't dismiss the Chinese builders too quickly as some of them have really evolved nicely.

    Then there's the custom US build that could go a couple of different routes. I can't imagine anything Burger wouldn't take an order on. It's a matter of how comfortable you are with them doing something different. Then, for a long time, a friend has harassed us about getting one of the custom SF builders to build a motoryacht. I don't find that a very appealing choice either, but it's a possible route.