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Malibu Boats hit with $3.1 million court judgment

A jury ordered Malibu Boats to pay Marine Power Holding LLC more than $3.1 million following a breach-of-contract dispute.

A jury ordered Malibu Boats to pay Marine Power Holding LLC more than $3.1 million following a breach-of-contract dispute filed in U.S. District Court for the Eastern District of Louisiana.

The jury awarded $1.8 million on Marine Power’s breach-of-contract allegation and an additional $1.3 million in future lost profits based on the jury’s finding that Malibu “acted in bad faith,” according to court documents filed earlier this month.

The jury also ordered prejudgment interest from the date of judicial demand in the amount of $138,302.58, for a total award of $3,238,302.58.

“We were disappointed with the outcome of the case, and while we disagree with the jury’s findings, we respect the process,” Malibu said in a statement to Trade Only Today.

“We are now considering all of our legal options, including appeal. Based on our understanding of the facts, we believe that we have several alternatives available to us and expect that in due time we, along with our legal team, will proceed with our next steps.”

In 2013 Marine Power and Malibu entered a business relationship in which Marine Power would fabricate engines for Malibu, according to the original complaint filed in April 2015.

Marine Power said Malibu had placed a purchase order to build 571 custom engines and later informed Marine Power that it would no longer use the company as a supplier. Marine Power said it had already completed much of the work on the engines.

“Marine Power incurred substantial expenses to perform its obligations,” court documents said. “Marine Power is now confronted with significant damages, owing to Malibu’s breaches.”

The initial complaint accused Malibu of breach of contract and “detrimental reliance,” saying Marine Power had made significant investments in tooling and inventory. “Malibu’s wrongful termination … severely damaged Marine Power,” the complaint said.

Malibu said in its response to the compliant that it terminated the purchase order after Marine Power did not meet certain obligations, such as failing to provide the serial numbers of completed engines.

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