Malibu Boats settles lawsuit with Trustee for $3.5 million

[MJHSupra]

I know this is not Supra/Moomba related, but I was following the story around BU and their lawsuit with Tommy's Boats (BU's largest dealership group that went bankrupt).

Appears BU is settling to get this behind them.

Not sure where Tommy's Boats and the Bankruptcy Court end up after they liquidate all of remaining assets. M&T Bank was owed appx $117 million and there were more than 100 creditors in the court filing. The court documents listed the 30 largest unsecured claims, which came out to more than $123 million.

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Investing.com - Editor: Natashya Angelica
Published 10/08/2024, 10:47 AM

LOUDON, TN - Malibu Boats (NASDAQ:MBUU), Inc., a leader in the manufacturing of high-performance sports boats, has entered into a settlement agreement with the Chapter 11 Trustee for Tommy's Fort Worth, LLC and its affiliate debtors. The announcement made today reveals that the settlement includes Malibu Boats' agreement to pay $3.5 million in cash to the debtors' estate.

The settlement, dated Monday, stems from a series of claims between Malibu Boats and the Trustee of the bankrupt Tommy’s Fort Worth, LLC. As part of the agreement, the Trustee will seek a court order to prevent Matthew Borisch, the primary owner of the debtors, from continuing his claims against Malibu Boats and its affiliates.

This agreement is contingent upon certain conditions and requires the approval of the United States Bankruptcy Court for the Northern District of Texas. The company and the Trustee have agreed to mutual releases of all outstanding claims, which is expected to provide a clear resolution to the ongoing legal matters.

The settlement is a significant event for Malibu Boats, as it potentially ends a legal dispute that could have had material impacts on the company's financial position. The details of the settlement were filed with the Securities and Exchange Commission (SEC) and are based on a press release statement.

Investors and stakeholders of NASDAQ:MBUU will be watching closely as the company seeks to finalize the settlement, pending the Bankruptcy Court's approval. Malibu Boats has cautioned that forward-looking statements regarding the approval of the settlement contain risks and uncertainties, and actual results may differ materially from those anticipated.

In accordance with SEC regulations, Malibu Boats' Chief Executive Officer, Steven D. Menneto, has signed off on the report. The company has stated that it will not undertake any obligation to update or supplement the forward-looking statements provided, except as required by law. The settlement marks a pivotal moment for Malibu Boats as it aims to move beyond the litigation and continue its focus on manufacturing activities.

[larry_arizona]

Thanks for sharing, we are all affected by this Malibu/tommys disaster.


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[Mxmark4]

So did they settle because Tommys had proof they slammed them with high markup boats they couldnt sell or is 3.5 million what it takes to make them go away?

[sandm]

is 3.5 million what it takes to make them go away?

I bet this. 'bu may have been pushing high margin boats that weren't going to sell but in the end Tommys was a separate business and can't be absolved of making the decision to accept the boats to floor and sell.

depending on what happens to tommys will be interesting to las vegas. we only have 2 real boat dealers here. one sells mc/heyday and rarely see any of their products around. the other-tommys- sells bu/axis and they owned this market. the original owners of boulder boats were extremely freaked out by covid and assumed the world was coming to an end. they cashed out the end of 2020 with a very quick sale to tommys. when they go away it'll leave a big hole especially with service.

there's a nautty dealer that moves a half dozen boats a year as his main business is lake lice and can am spyders.
there's a centurion/supreme dealer in boulder city but they are in a no traffic location, no advertising and would be surprised if they are moving a dozen or 2 a year.
tige dealer bankrupted 4 years ago.

no supra presence here for 10+ years that I have been told and the nautty dealer dumped moomba 7 or 8 years ago.

there's a market here for someone especially on the service side.....

[MJHSupra]

So did they settle because Tommys had proof they slammed them with high markup boats they couldnt sell or is 3.5 million what it takes to make them go away?

Each side will have their story and it will be different reasons for each side to settle.

From the Tommy’s perspective, a good team of attorneys costs big dollars. There was a chance they could loose. So if they loose, the attorneys will be covered on guaranteed payment. I do not know their financial situation outside of $100m+ owed to creditors. It might be $3.5m b/c it’s guaranteed - better than getting nothing and more lawyer bills. Plus, court cases take lots of time.

For BU, by a public company settling the case, it gets this behind them. One less thing for investors to be concerned about. Liability is limited to the $3.5m, which is a small amount for large company.

I recall BU settled a wrongful death lawsuit in 2013 for $100 million following the 2014 death of 7-year-old in Georgia. Jury verdict was originally for $200m. A boy fell out of the rental boat (2000 Malibu Response LX) driven by his uncle when they hit a wake. BU was responsible b/c of swamping risks after the risk was known to the company.

Also recall reading BU only had $25m of insurance at the time of that 2014 case.


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