Purchased a utility vessel from this company based on the information provided by the owner/President of the company. Our company had been working vessels with this company since mid, and we had also owned one vessel jointly for a period of time. We trusted this person to be honest about the vessel's condition, but when the survey was completed to assure the bank of the vessel's worth, the surveyor was led to believe that the areas of the vessel he was unable to look at (because the vessel was in the water, not drydocked) were in much better condition than they actually were. The surveyor put a statement in his survey that the owner told him that these areas were in good shape and the value was based on what he was told by the owner at that time.
The next year when the boat had to have a US Coast Guard bottom inspection, the opposite was true. Typically a bottom side inspection costs about $50,000 if the vessel is in decent shape. The astronomical cost caused our company to have to close, as we spent the whole next year paying those expenses. At that same time, we were informed that the vessel would no longer be on a long term job we had counted to keep our company in the black, so our vessel was no longer working enough to make a profit. The owner of that company pulled our vessel and put one of his own on that job. We also had another vessel that had been working "spot" jobs and in the past had a work history of about 70% utilization, but that vessel dropped to about 50% that same year which means it no longer made a profit either. The owner of that company did this because he made a poor business decision to purchase two 180' vessels that he lost a lot of money on, so he took us down too. The only thing is, he managed to file bankruptcy and continue to operate. Our company docked our two vessels to keep from filing bankruptcy and had to sell the vessels and go out of business. We talked to the owner several times about the direction our finances were going, but he would not lower the 10% fee they were collecting off the gross amount of what the boat produced or anything.
When we started in business with him, we owned a vessel free and clear, and made him a 50% partner to help him get started. We gave him 50% of the profit on that vessel for a year, and he was able to purchase half of the vessel with that profit. He lowered the management fee during that time, but as soon as he was able to actually purchase half of the vessel, he wanted to raise the fee to 10%, but we reminded him of how much he had made because of our generosity in helping him getting started in business, so he set it at 8% for a year and then raised it to 10%. As time passed, the vessels worked less and less which greatly affected our income, so when he needed to sell this vessel to get him out of a jam with those two 180' vessels, we agreed because we thought it would help him and help our income also.instead, it put us out of business because of the incredibly expensive Coast Guard inspection. After we had been so generous in helping him, he deceptively sold us this boat claiming the condition to be good, when it was obviously poor.
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