Buyers Trapped in Feud with Sunseeker...

Time to change the boot stripe to "money seeker"....
Or just good old "S.O.L."

Yeah, but legally you cannot offset warranty work on 1 boat onto another boat. That is fraud. AND, each buyer I'm sure paid Obey a certain amount towards or for their boat, and that should have only gone to Sunseeker for THAT boat. It's fraud all of the way around and no matter how you look at it. And, I've heard somewhere that Obey only claimed Sunseeker owed him $1 million in warranty work. So how does that effect 6 or 7 yachts with a combined value of what, $20 mill +/-?

Turner had no contract with Sunseeker. He was buying a boat from Obey, to be built by Sunseeker International, delivered to Sunseeker US and delivered to Obey, but the only two parties to the contract were Turner and Obey. I doubt seriously that contract indicates what had to be done with the money and the trade in, just here's the trade, here's what is paid and what is due and when. The boat in question, Obey doesn't own and never owned as he, the purchaser from Sunseeker, never paid for it.

As to warranty work and offsets and what and when and how he was supposed to pay Sunseeker, we have seen glimpses of the agreement but not the specific orders. As to legal on applying warranty work, unless their agreement specifies, he could apply it like a payment. However, that only works if they honor his claim. Clearly he wasn't segregating funds and was applying what was received on one boat to another. It's something done by many builders and I think fits the broad definition of a Ponzi scheme. Now, he ended up with some large amount of what he owed Sunseeker tied up on used boats, also. Just applying the money received would never pay for the boats. Theoretically, he'd buy their boats and apply that money, but I doubt seriously that happened.

Ultimately, Turner didn't have protection against dishonesty or manipulation or anything other than everyone following through like they should have. Neither did others. Had everyone done as they were supposed to, he would have been fine, like many buyers all these years. He trusted who he was dealing with. I wouldn't be at all surprised if he signed a contract without an attorney reviewing it and paid the money.

I will say this too. Turner is actually better off if Sunseeker disposed of the boat which might mitigate some damages. Otherwise, even if he wins at some point, he has an old boat. Money is what he'll be seeking to recover. Let's assume he isn't successful recovering money from Obey. He might possibly be able to recover money he gave Obey, which Obey passed on to Sunseeker. Furthermore, if Obey sold his old boat, then he can try to follow it.

It's way too convoluted to know all the possibilities. I would be trying to pursue it as a conspiracy also, trying to pull Sunseeker into it. That requires finding out what they knew, which requires a lot of depositions.

Certainly that's the one the lawyers will try to pursue. I think the key is proving it was a conspiracy, that Sunseeker knew what Obey was doing and by allowing it they're part of it. I'm sure their argument will be that when they found out they terminated their agreement with him and even went to court to get him to desist.

Now, the problem is to even get them in court, to prove they have nexus. You do that through interrogatories and depositions. Interrogatories generally tell you very little but may tell you where to look or what to ask. However, I'd bet in a deposition, Obey will very much try to pull Sunseeker in. The themes will be "They did this to us. They knew what we were doing. They were here all the time."

I don't see this resolved for years. Even then I see judgements against a company left with no assets. I say no assets, but I believe they probably do have one and that is the amount they've advanced to Sunseeker. I do see a bankruptcy court recovering that and distributing that to the buyers. Potentially those buyers could get 50% or so of what they'd paid. I see this all taking another 3 years or so.

We talk about the Turner boat but that's not the only one.

Yes, I think Sunseeker looks bad.

I've seen companies try to step up when their customers or dealers did wrong, but most don't. I've tried to think of comparable situations to this but really can't. Car dealerships don't make you pay the full price to order, only a decent percentage. I've known dealerships to go out of business after taking deposits and the manufacturer would discount the orders to cover it. However, we're dealing with far less money.

I still contend Sunseeker doesn't have the money to make this right and Wanda isn't going to give it to them for that purpose.

I've seen no evidence anyone involved cares a thing about their reputation. Obey reopens in same location with another brand. Sunseeker sells to another dealer. Only ones hurt are the customers.

Assuming Obey and his customers are due some money back on amounts they paid for boats they didn't receive and assuming it's not near all they paid, only the courts can determine how it's split among debtors.

The other question is where are the other boats? There were 6 or 7 people effected that ordered yachts besides Turner. I know of a new Sunseeker that is coming over from the factory in the next two weeks but have no idea if it's involved in this. However, usually Sunseekers (and princesses) come over in batches.....a few at a time at least.

I believe Sunseeker just cancelled the orders for non payment and is holding the boats or shipping to new dealers. I heard one buyer was saying he'd pay what was still owed including any Obey shortfall, but I don't think Sunseeker felt they could legally do that. They can't give a buyer credit for what Obey paid them. That would be them diverting the funds.

But they can be sitting on the funds Obey paid them and not deliver anything for them?

Smells of having your cake and eating it too.... eventually the courts will, or should, have something to say about that one would think.

Although the complaint is shorter than Turner's, I find the arguments in Velvet Beach's suit to be much more compelling.

They claim that Sunseeker USA is simply an alter ego for Sunseeker International and, therefore, Sunseeker International is subject to suit in Florida. Same officers and represented by same people. Well presented.

They claim that Sunseeker regularly told Obey to apply warranty claims against boat purchases. I have no idea if that's true. They claim that Sunseeker was actively involved in the reallocation of funds.

Their contract provided for pre-inspection and delivery in the UK.

And here's a big one. It's a "Revenue Recognition" letter that Obey signed for Sunseeker claiming to be in possession of vessels so Sunseeker could recognize the revenues in a given year even though the revenues had not yet been earned. Also, customer deposits were allocated to spec vessels so those sales could "close."

On top of fraud, they add in fraud in the inducement. This includes neither party informing the buyer of the litigation and meanwhile the buyers $455k deposit and a total of $4 million US in deposits by customers just being ignored. (Note the suit by Sunseeker of Obey is 13.5 million GBP.

JPC Sea Holdings has an interesting case, much a reminder of Northern Marine. In this case they paid 20% down, $690k. They got an email saying the next 30% was due when the hull was laid up. However, for three months they attempted to discuss the status and requested evidence of the completed hull so they could then make payment. They never received any evidence and Obey declared they had breached the agreement and the purchase contract was no longer valid and they'd keep the $690k as liquidated damages.

Prior to the claim that JPC had breached the contract, Obey and his counsel had told them the delay was due to a disagreement between Obey and Sunseeker and that Sunseeker was threatening to discontinue production of the yacht and terminate their agreement with Obey. They claim that Obey kept the deposit and tried to get the additional 30% even though he knew the boat wasn't being built. This delivery was also to be in the UK. What is also interesting is that in 2016, the same buyer had purchased a 65' Manhattan through Obey and throughout the build gotten evidence from Obey of stage of completion and paid accordingly.

Ultimately they could be required by the courts to return any funds owed to Obey to Obey or the court could select other parties to receive some. In a bankruptcy, typically the trustee will collect all funds and then get court approval of distribution. Who knows what the funds ultimately are as they claim Obey owes them 13.5 million GBP. One case says deposits of around $4 million. I don't know about status payments. I think there's a chance of piercing through Sunseeker USA to Sunseeker International. However, I don't see strong hope for holding Sunseeker accountable for Obey's actions. No buyer gave money to Sunseeker, just to Obey and there's an argument in one case that Sunseeker didn't even require Obey to pay the same deposit he was collecting, but less, and sometimes none. So we don't really know how much money even went to Sunseeker. Now recognize these are all allocations and everyone is innocent until proven guilty in a court of law.

Not only can they, but they may be required to. What do they deliver and to whom? They can't take the money from Obey and deliver a boat to Smith or Jones or whomever. If Obey breached contracts then they'd have to return to him money owed less any liquidated damages, but figuring that out is way down the road.

After reading through most of the court filings, it wouldn't surprise me at all if federal and state tax and law enforcement authorities had already opened up investigations. These aren't small dollar amounts in question. There is ample evidence that points to potentially fraudulent behavior and most of that behavior, in addition to being itself criminal, also increases the likelihood of accounting irregularities. Those irregularities are also likely to have tax implications.

All this underscores how little in the way of consumer protections are in place for boat buyers. But, the boat lobby is strong in FL and other states and the consumer lobby, not so much. So, here we are. My advice to friends looking to purchase any boat, new or used is simply: If you're not willing to put those funds in a hole in the backyard, douse it with gas and set it ablaze, always secure the services of a qualified, experienced lawyer before signing anything, particularly a check. Handshakes are for dinner parties. Carefully considered and executed written contracts are for business.

I’m curious if they will be able to go after Obey himself or any holders of the new company. There are instances of being able to go after the owner/successor company of a failed business when the original LLC wasn’t sufficiently capitalized and therefore isn’t a distinct business from the owners themselves.