Goetz faces breach-of-contract suit - Trade Only Today

Goetz faces breach-of-contract suit

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Goetz Custom Technologies is being sued for breach of contract by Great Britain-based Aegir Racing Limited for allegedly failing to deliver on plans to build a $6 million, 82-foot Rogers-design sailing yacht.

The complaint, filed Monday in U.S. District Court in Rhode Island, alleges that Bristol, R.I.-based Goetz repeatedly took money from Aegir Racing, but has not delivered the boat and has used money it received for items other than construction of the boat.

The suit also alleges that the Rogers 82 has not been constructed in "full conformance" with the plans and specifications, and Aegir Racing will incur additional costs to correct Goetz's work on the boat.

Goetz Custom Technologies owner Eric Goetz did not immediately return calls seeking comment, and has not yet filed an answer to the complaint.

The complaint says in August 2008, Aegir Racing and what was then Eric Goetz Custom Sailboats, signed a written contract for the Rogers 82 for more than $6 million. In December 2008, Aegir made a $250,000 payment to Eric Goetz Custom Sailboats.

In January, Eric Goetz Custom Sailboats was petitioned into receivership as a result of ongoing cash flow problems by the company's inability to obtain refinancing and by the termination of a construction contract by one of the company's international customers, the company said in a statement earlier this year.

In March, it was reported that Eric Goetz would retain ownership of his company after bidding $450,000 for its assets. The company was renamed Goetz Custom Technologies and assumed the obligation for the Rogers 82 contract.

Aegir says in court documents that in July and August it paid two Goetz Custom Technologies invoices totaling $68,670. These payments were outside the monthly billing schedule and were submitted and paid as pass-through payments for Halls, Inc., the rigging supplier. Aegir Racing later learned that the funds instead were wrongfully used to pay "assorted obligations of Goetz Custom Technologies and the funds are no longer available to play Halls, Inc."

In August, Aegir said it received information revealing that Goetz Custom Technologies "had substantial open liabilities to subcontractors and suppliers, and did not appear to have the financial resources necessary to complete the Rogers 82." However, Eric Goetz told Aegir it was awaiting state loans of $500,000 that would enable it to complete the boat, according to court documents.

In September, Aegir once again reviewed Goetz Custom Technologies records and found that the company "had greater open liabilities to subcontractors and suppliers than it had in August," court documents show. Also last month, Aegir began paying Goetz Custom Technologies weekly for essential costs of the Rogers 82.

Aegir also says in court documents it paid more than $24,000 into Goetz Custom Technologies' "regular check account," and not the escrow account, and later learned that work on the Rogers 82 had been suspended. Goetz Custom Technologies told Aegir it would return the funds, but Aegir says it has not received the money.

— Beth Rosenberg

b.rosenberg@tradeonlytoday.com

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