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