marine industry professionals
MarineMax faces lawsuit over stock restrictions
MarineMax and several of its officers are being sued by the former owners of Surfside-3 Marina Inc. - which they sold to MarineMax in 2006 - for allegedly failing to lift restrictions on stock sales by the plaintiffs, which led them to lose millions of dollars, according to a suit filed in U.S. District Court, Eastern District of New York.
Paul Barbara, Diane Kenney and Angela Chianese, siblings who owned the business along with another brother, Matthew Barbara, said in their suit that they received $45 million for the sale of Surfside-3, of which 35 percent was to be paid in MarineMax common stock. According to the agreement, the stock the family received was “restricted securities” and would be restricted for sale for one year.
Matthew Barbara, who works for MarineMax, is not a party in the lawsuit and his shares of stock are not included in the case.
The three siblings who are plaintiffs received about 565,024 shares of stock, which they planned to sell after the restriction was lifted. However, the plaintiffs say MarineMax did not respond to requests to lift the restrictions, despite what the Barbara family said were repeated attempts to contact MarineMax officials.
Also, according to the lawsuit, during this time MarineMax chairman, president and CEO William McGill Jr., executive vice president, CFO and secretary Michael McLamb and vice president Michael Aiello each sold stock they held, making a substantial profit. Court documents say McGill sold his stock for more than $7 million, McLamb sold his for more than $1 million, and Aiello sold his for more than $83,000.
The lawsuit said that after these stock sales the price of MarineMax shares fell dramatically.
It wasn’t until August 2009 that the stock restrictions were lifted, according to the lawsuit, at which time the stock was trading at about $7.45, down from about $23 in April 2007 when the restriction should have been lifted, according to the lawsuit.
“The plaintiffs have suffered compensatory damages in the approximate amount of $7 million, plus interest and lost investment opportunity, in an amount to be determined at trial,” according to court documents.
MarineMax officials told Soundings Trade Only that they were reviewing the lawsuit.
“The claims are without merit and will be addressed in due course,” they said.
Paul Barbara told Soundings Trade Only that he tried to come to an out-of-court agreement with MarineMax, but said, “I wasn’t getting anything.”
“I didn’t sign up for two or three years to hold the stock. I wouldn’t have made the deal,” he said.
Look for more on this story in the March issue of Soundings Trade Only.
— Beth Rosenberg
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
-
All Trades
-
Quality Manager
-
Yacht Broker
-
Canvas Fabricator/Stitcher
-
Senior Sales Rep
-
Full Time Florida Broker(s) Needed
-
Marine mechanic wanted
-
Parts person needed
-
Marine Technician
-
Senior Technician
-
Mechanical Design / Manufacturing Engineer
-
Regional Sales Manager Positions
-
Legendary Marine is hiring
-
Production Manager
-
Seeking Experienced and Dynamic Sales People
-
Yacht Broker Needed
-
Seeking Yacht Brokers for Our Busy and Growing Lauderdale Office
-
Marketing and Account Specialist
If you had any ability to validate your statement, you would have used your real name. It just goes to show how quick people speak up although they have little knowledge on the situation.
Let's give them the credit they deserve.
JA. E. Patchogue NY
Unless Im mistaken, these guys are rich from selling of a business they did not even build/grow themselves. I have zero sympathy for them.
Executives selling stock while holding up other shareholder's liquidity is not new, its par for the course. Only a sucker would buy stock in a company like this. So we know the siblings are going to dumb their shares when they finally get them released. If i wanted to gamble, i would say shorting that stock would be a pretty good bet
There are two sides to this story - miss dee!!
Item 2.01 Completion of Acquisition or Disposition of Assets.
On March 31, 2006, we entered into and closed an Asset Purchase Agreement with Surfside pursuant to which we acquired substantially all of the assets, properties, rights, and goodwill of Surfside and assumed certain liabilities of Surfside's watercraft business. Surfside operates 15 boat dealerships throughout New York, Connecticut, Rhode Island, and Maryland through company owned stores and distribution agreements.
The consideration paid was a combination of cash and common stock. We acquired the operating assets of Surfside for approximatley $24.8 million in cash and approximately 665,000 shares of common stock, plus working capital adjustments and the assumption of certain liabilities, including floor plan financing obligations. A portion of the shares of common stock will be held in escrow for a one-year period as security for Surfside’s representations and warranties as specified in the agreement.
The agreement also contains other provisions, covenants, representations, and warranties made by Surfside and our company that are typical in transactions of this size, type, and complexity.