Former owners of Surfside 3 Marina allege that the boat retailer caused them to lose millions
MarineMax and several of its officers are being sued by the former owners of Surfside 3 Marina Inc., which they sold to MarineMax in March 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, Matthew Barbara, Diane Kenney and Angela Chianese, the siblings who owned the business, claim 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 shares the family received were “restricted securities” and would be restricted for sale for one year.
The siblings together received more than 600,000 shares, 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 says were repeated attempts to contact company officials.
The lawsuit, filed Jan. 26, notes that the defendants attempted to negotiate a two-year restriction period, but the plaintiffs rejected that suggestion and made it clear they intended to sell the stock after the one-year restriction period, according to court documents.
The suit names MarineMax; chairman, president and CEO William McGill Jr.; executive vice president, CFO and secretary Michael McLamb; and vice president Michael Aiello. Board member Robert Kant, who serves as outside counsel to the company, was added after the original filing.
According to a release from Paul Barbara, “Acting through Kant, the board members denied and blocked the Barbara family members of their right to sell the stock, while certain board members … sold their own MarineMax stock, reaping millions of dollars of profit, knowing that a sale by the Barbara family of their acquired stock would have a negative effect on the MarineMax stock price.”
According to the lawsuit, McGill, McLamb and Aiello each sold stock they held at a substantial profit. Court documents say McGill sold his stock for more than $7 million, McLamb for more than $1 million and Aiello for more than $83,000.
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 suit claims the restriction should have been lifted. “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,” the suit contends.
MarineMax officials say they are reviewing the lawsuit. “The claims are without merit and will be addressed in due course,” the company told Soundings Trade Only.
Paul Barbara says he tried to come to an out-of-court agreement with MarineMax.
He says he doesn’t fault the officers for selling their stock, as was their right. He just wanted the same rights. “[McGill] has a right to sell his stock, but you have an obligation in the purchase agreement in black and white that the restrictions were supposed to be lifted after one year,” he says. “I didn’t sign up for two or three years to hold the stock. I wouldn’t have made the deal.”
This article originally appeared in the March 2012 issue.