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part 2: Northern Marine 90' Yacht Capsizes Upon Launch...!

Discussion in 'Northern Marine Yacht' started by jaycee, May 29, 2014.

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  1. Delfin

    Delfin Member

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    Nope. Zero activity of any kind. Local paper quoted NM saying the port side wheel of the dolly fell into a hole, then the stabilizer fell into the same hole and that caused the boat to roll over. No, I'm not kidding. That is what they said.

    Northern Marine idling after failed launch - All Access - Skagit Valley Herald
  2. olderboater

    olderboater Senior Member

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    Sitting. Can't speak as to rotting.

    Posturing. Let's see...Bud making sure we know it wasn't his Northern Marine but New World acting as Northern Marine under an agreement with him, and that New World owns nothing. Andy making sure we know that there is nothing wrong with the boat, that this was just a horrible accident, as if launching wasn't their responsibility. Lawyers lawyering. Oh and work on all other boats halted since owners won't pay them more money. Of course they overlook the fact they'd already halted work on other boats.

    Lots of declarations and motions in the case involving the 80' boat originally to be completed by March 1, 2012 and amended to June 11, 2013 and still not completed. Basic things like alleging that New World was unable to pay for materials so buyer having to do so and not maintaining the required 5 people working on the boat plus progress billing for work not yet done (Surveyor allegedly confirmed this in arbitration) and $225 penalty due for each day late.

    Someone stated earlier that they believed Badun was substantially underbid. Well 8002 (78' lengthened 2') was bid for $1,498,000 plus change orders of $410,883. You can compare that price to the listing on yachtworld of a 2006 81' Northern for $3.9 million or an 2002 80' for $2.8 million or a 2003 77' Northern for $3.7 million.

    You can guess the defense would be the buyer refused to pay the invoices so work was stopped. New World is also requesting extension of time, the latest reason being the sinking of Badun made Andy unavailable the day after. Oh and interesting where Andy opposed the use of the word "sinking" to the press, the defendant's motion refers to it as "sinking".

    Obviously all the claims are just allegations at this point and no ruling has been issued. This case was filed on Jan 6.

    Anything else behind the scenes maneuvering. Don't worry, there is more to come. But I wouldn't hold my breath waiting for Badun to hit the water. In the above suit they have attempted to get the records on Badun but the buyer has a confidentiality agreement including that his name wouldn't be released so that is being contested. Wonder how much the storage fee is on the land where it sits.

    For any of you contemplating a build of a boat, all this type information is publicly available.
  3. NEO56

    NEO56 Member

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    So what your saying olderboater, is that you don't even contemplate a new build without an iron clad contract that protects you more than the builder. I guess finding a maritime attorney is on my list as well.
  4. Capt J

    Capt J Senior Member

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    This as well as contracting a solid reputable builder to start with. I have seen so many instances where the owner(buyer) of the yacht being built that ends up buying/owning the yard just so his yacht could get finished.
  5. NEO56

    NEO56 Member

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    Gee thanks Capt J, I've heard those stories as well. I can honestly tell you that owning a yard is no where on my list of things to do. olderboater, and quite a few others here have told me in no uncertain terms that I need to assemble a very good team prior to signing the contract, let alone the first check. I'm still in the Outer Reef camp for the time being, but based on what I've read and heard, they have a lot of work ahead of them proving themselves to me and my team.
  6. Capt Ralph

    Capt Ralph Senior Member

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    Until this event, there may not have been any hints (on the causal surface) that NM was having any problems. Digging deep into a companies business may not be a real common place. Maybe it should??
    Also, this should be no reflection on any other new build yard. BUT, should any new build contract investigate into the builders past practice and ability to pay bills on time? Investigate who owns the equipment? building? and company name???

    The ramp pictures showed some tire marks off to starboard. Did not notice anything on the port side of the ramp. Pictures from low tide, well below draft requirements at high tide.
    The above article was a lil confusing about the port carrier falling and a fin getting stuck in the same hole.

    I was not there, but I don't think so....IMO.

    Having toured a couple of builds from Outer Reef, Looks like a well built ship (I am not a builder or qualified surveyor). But, I have not investigated the companies business practice or who owns what.
    In looking at one out of the water (Outer Reef), I have never thought it would fall over as criticized on this build before launching. IMO..
  7. olderboater

    olderboater Senior Member

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    First and foremost I want a dependable builder and I want to know about them, all I can find out. I want to know how they meet schedules, what their financial condition is, litigation, credit, and the principles.

    Second I want a contract that is fair and protects us both. The good builder has no problem with a fair contract.
  8. olderboater

    olderboater Senior Member

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    And know what the entities you're dealing with are. If you think it's one company and suddenly the contract reads another name, that's a cause for concern.

    I guess it's a business background, but I never entered into $10 million contracts without knowing who it was with. And I was very careful never to pay ahead. A good builder can build you slightly in arrears. So they've done 75% and you've only paid 50%. They should be very comfortable. You default after paying 50%, they should make a lot off that deal. Progress payments should be to protect against default and to reduce negative cash flow. But if they need your progress payment to cover all their costs to date plus their next to be incurred then they aren't stable.

    One book read eliminated one US builder from consideration for us. One law suit reviewed eliminated another. One more suit plus issues on a second boat combined with no boats for a couple of years eliminated another. There is one other builder of runabouts and cruisers where the primary owner has made his money throughout life with buying distraught companies, then bankrupting them ultimately. That information is fully available on wikipedia. That's how easy it is to get.

    And I'd never order custom without visiting the yard. There will be obvious signs there. They claim to have 100 employees but you can count them all and it can't be over 30. You see no boats being worked on or all seem to be at the same point of build.

    Now, I can't tell you about construction so have to have someone else do that for me. But I can evaluate a business. And hopefully face to face find out something about the key people. I asked the CEO of one builder one question over the phone and he immediately clammed up and said, "I'm not going to discuss that." Then cursed me for asking it. I simply asked him what went wrong on one boat. Had he told me the mistakes they'd made and their regrets and how they'd assured it wouldn't happen again, I might have felt differently.

    The things you mention Ralph, a good builder will respect you for having those concerns. A bad one will be very offended.
  9. Marmot

    Marmot Senior Member

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    It should have been in bold type on the first line of that list.
  10. mapism

    mapism Senior Member

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    Good luck. You're saying that as if it were easy...
    And even if you could get to know everything, that would still be a knowledge about the past, not about the future.

    There's one and only way to reliably cover the risk of loosing your money when building a new boat, and it's to include in the negotiation a fidejussion for each stage payment, from a reputable bank, covering any sort of builder defaults.

    Of course, there's an additional cost involved in that, but if the builder is financially sound, also the bank fee will be reasonable.
    If a bank wants a huge fee for covering the builder's ass, well, that's the best warning signal you can get, without further wasting your time in investigations.

    Mind, I'd still want to know as much as possible about the technical capabilities of the builder, but that's another matter in principle, though possibly interconnected, to some extent.
  11. Kafue

    Kafue Senior Member

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    A good legal team to start with...
    What a way to start on an adventure that has enough elements making it a passion for the brave and or foolish.
    My experience with the legal fraternity, right up to last week and continuing, is that this will shorten my life not just in stress and frustration because of the double talk and deceptions, but hell, maybe I'll just let go willingly!
  12. Marmot

    Marmot Senior Member

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    Ah yes, but if all the solutions to all the pitfalls can be defined and agreed at the outset (an impossible goal but worth the attempt) then the adventure can be reserved for post acceptance - where it should be.
  13. olderboater

    olderboater Senior Member

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    I can't fathom one signing $10 million contracts without having a good attorney involved. And if your opinion of the legal profession is all bad, then you need to find some different attorneys.

    Now I do suspect the Baden buyer had an attorney. But all an attorney does in this situation is give you recourse. They still don't assure the work gets done. As to fidejussion or surety, as known in the US, necessary if you're paying ahead but not so if you're paying behind and have protection in other ways. Instead of an upside down payment schedule, a better one might have you paying 40% when it's half done, 60% at 3/4, 80% when floated, 90% upon completion of sea trial and 100% upon final delivery.
  14. Marmot

    Marmot Senior Member

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    That is the point I attempted to make. As I suggested earlier this morning, finding a maritime attorney should have been in bold type at the top of the list.

    Recourse is the whole point, it is about as much as anyone can hope for if for no other reason than it narrows the argument to issues that are easily shown in court to be part of the contract that both parties agreed.

    Not that much is iron clad in legal matters but it is better than what amounts to invisible ink or water paint.
  15. Kafue

    Kafue Senior Member

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    I have not met too many clients who have $10 million, $18 million or even $2 million that did not have the good sense to employ a talented attorney to check and double check a build contract, in my case not in boat construction but something other, and my lawyer is no slouch either.

    However, there are a percentage of the rich or posers of being rich, as well as people catering to the same, who are psychopaths.
    This condition can come with a bit of genius, and when you mix this all together, there is very little the law can do or lawyers can avoid, other than not participate at all.

    The law, is not just, but IMHO, attempts to be fair to the majority.
    In other words, the few will find ways to waltz with Lady Justice most their lives.
    I am sure many names come to mind for us all.
  16. olderboater

    olderboater Senior Member

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    Recourse against an insolvent builder isn't much good. That's when it's key that payments are trailing work rather than the other way around.
  17. mapism

    mapism Senior Member

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    I'm not sure to understand your point.
    Let's say the boat is half done, you pay 40%, and the builder goes bust the day after.
    Yes, you can (possibly, but not necessarily - depending on the contract) take your half done boat and bring it elsewhere for completion.
    Theoretically, with a 10% saving on top, but it's extremely unlikely that you will find a second yard willing to finish the build for 50% of what you agreed with the first.
    Anyhow, having seen a few boats which went through the mess of multiple builders, I'd rather have the option of getting my money back PDQ, which is something only a bank guarantee can offer.
  18. olderboater

    olderboater Senior Member

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    You're not going to get the bank guarantees in the US or in most places when really needed. They will give letters of credit on finished products being ordered but not in most cases on production such as this. Requiring a surety bond would be the nearest equivalent. But the reality is that those who need it won't qualify. Now the fact they're uninsurable for performance should tell you something.

    So for the most part if you choose a builder who doesn't perform, your best hope is the partially completed boat or in a case of tragedy, insurance on the damaged boat.

    There is another problem and that is companies like Northern seem to love prolonged legal battles and will insist you owe more and refuse to even give you the partially completed boat. One owner has been trying to get that. Many boats have been started by one builder and finished by another. Not the best. But I know of at least one Northern that was finished by Delta.

    And I would never sign that even 40% was paid upon 50% completion. More like 30%.

    Still the problem is contracting with a builder without any net worth. If they can't afford to finance any construction, then no one is going to guarantee anything. They have no assets. To show you how extreme that was in the case of Northern, the buyer was paid up on all invoices and still allegedly they came to them for an advance against future payments to just buy $20,000 worth of materials. If you contract for a $5 million or $10 million boat with a company that doesn't have $20,000 there is no hope.

    Also, you have an 80' boat for $1.9 million. No way it wouldn't cost more than that to build. So you're right that wherever it stands in terms of completion to get it completed would be much more expensive.

    Baden is even more complicated as we don't even know who is the insured or what will happen to any insurance funds if there are any. Nor do we know what they'd pay. And now the partially completed boat is nearly worthless.
  19. mapism

    mapism Senior Member

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    That was my point exactly.
    And when I replied to your post #107, the debate was on the choice of a reliable builder in general.
    Telling NOW that Northern wasn't one of them is not exactly breaking news... :)
  20. olderboater

    olderboater Senior Member

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    Well, nothing has really changed that much about Northern. Just more people aware. Well, nothing about them as a company. As a builder, this is different for them. Not the part about not completing but the part about the boat rolling over on the ramp.