Seek advice on forced buyout of 1/3 share in sailboat

[Xenophon10000 0]

My friend bought a 1/3 share in a new performance race boat in March 2017. He had sailed with both partners and considered them friends. They didn't put anything in writing regarding the use or sale of the boat (WHOOPS).

A quick timeline:

March 2017 3 partners purchase and import sailboat

Early 2018 Partner A moves away and indicates he wants to sell his share.

July 2018 Partner B says he is interested in selling his share. Partner A offers his share for US$14,300 to other partners

August 2018 Partners A & B claim they will buy all shares for US$6,400 each. They list their shares for more than US$6,400. Partners A & B never list their shares for less than US$6,400 each.

September 2019 Partner A requests boat is stored on the hard pending sale. Boat is hauled out. Partner A demands other partners buy his share for US$6,400 or he be allowed to buy other partners shares for US$6,400. Partner A threatens to take one third of the boat if other partners don't comply. Friend agrees to list entire boat for sale. Partner B withdraws to offer to buy all shares for US$6,400.

March 2020 Boat is reduced to to US$24,000, discussions begin about remaining price cuts to reduce boat price to US$19,200, allowing sale to Partner A.

May 2020 Partners A & B discover carbon spreader is broken off mast in storage.

June 10, 2020 Partner A withdraws US$6,400 offer for other shares, offers US$4,800 for other shares, demands US$6,400 for his share if other partners won't sell.

July 2020 Partners A & B inform my friend there will an auction/process where if my friend wants to sell he must compete with Partner B who will sell for US$4,800, but if he wants to buy out the boat he must compete with Partner A who will buy for more than US$4,800 per share, but will not disclose what price he will sell. The process is closed to outsiders. This process seems silly and designed to disadvantage my friend and not maximize recoveries.

My friend just wants to keep using his 1/3 of the boat and his partners to sell their shares to outsiders and replace themselves. My friend might be able to buyout the other's shares, but he is time limited and would require new partner/s to really campaign the boat. There is every chance market value is lower and my friend would get hit reselling the shares to new partners. What can or should my friend do?

Thanks

[apophenia 148]

Your friend should figure out how much the remaining 2/3 share of the boat is worth to himself and then make that offer. Let the dust settle before inviting in anyone else to the mess. 

[We are Rimas! 38]

your friend should sell his share for whatever he can to whomever will buy it. If he wants the boat after that offer his best price for it (no partners). If they don’t go for it , he should go buy his own boat. In other words he should extract himself as quickly as possible from that partnership as smoothly as possible. 

[LB 15 4,643]

1 hour ago, Xenophon10000 said:

My friend bought a 1/3 share in a new performance race boat in March 2017. He had sailed with both partners and considered them friends. They didn't put anything in writing regarding the use or sale of the boat (WHOOPS).

A quick timeline:

March 2017 3 partners purchase and import sailboat

Early 2018 Partner A moves away and indicates he wants to sell his share.

July 2018 Partner B says he is interested in selling his share. Partner A offers his share for US$14,300 to other partners

August 2018 Partners A & B claim they will buy all shares for US$6,400 each. They list their shares for more than US$6,400. Partners A & B never list their shares for less than US$6,400 each.

September 2019 Partner A requests boat is stored on the hard pending sale. Boat is hauled out. Partner A demands other partners buy his share for US$6,400 or he be allowed to buy other partners shares for US$6,400. Partner A threatens to take one third of the boat if other partners don't comply. Friend agrees to list entire boat for sale. Partner B withdraws to offer to buy all shares for US$6,400.

March 2020 Boat is reduced to to US$24,000, discussions begin about remaining price cuts to reduce boat price to US$19,200, allowing sale to Partner A.

May 2020 Partners A & B discover carbon spreader is broken off mast in storage.

June 10, 2020 Partner A withdraws US$6,400 offer for other shares, offers US$4,800 for other shares, demands US$6,400 for his share if other partners won't sell.

July 2020 Partners A & B inform my friend there will an auction/process where if my friend wants to sell he must compete with Partner B who will sell for US$4,800, but if he wants to buy out the boat he must compete with Partner A who will buy for more than US$4,800 per share, but will not disclose what price he will sell. The process is closed to outsiders. This process seems silly and designed to disadvantage my friend and not maximize recoveries.

My friend just wants to keep using his 1/3 of the boat and his partners to sell their shares to outsiders and replace themselves. My friend might be able to buyout the other's shares, but he is time limited and would require new partner/s to really campaign the boat. There is every chance market value is lower and my friend would get hit reselling the shares to new partners. What can or should my friend do?

Thanks

In order to fully advise you we are going to need to see pics of one of the partners tits - all 3 would be preferable. 

[Rain Man 747]

12 minutes ago, LB 15 said:

In order to fully advise you we are going to need to see pics of one of the partners tits - all 3 would be preferable. 

I think we'd all rather see their wives/gf's tits, no?

[LB 15 4,643]

1 minute ago, Rain Man said:

I think we'd all rather see their wives/gf's tits, no?

I meant Partners partners. Good pick up! 

[MR.CLEAN 3,822]

Why paying a lawyer is a lot cheaper than it seems

Exhibit A: the OP

 

 

[Black Sox 660]

3 hours ago, LB 15 said:

In order to fully advise you we are going to need to see pics of one of the partners tits - all 3 would be preferable. 

Is This your partner?

Eccentrica Gallumbits is the far-famed triple-breasted whore of Eroticon Six. Some people say her erogenous zones start some four miles from her actual body. Ford Prefect disagrees, saying five. It is possible that the Big Bang was actually one of her orgasms. She wrote The Big Bang Theory - A Personal View by Eccentrica Gallumbits and It's Just One Boob After Another.

[Navig8tor 1,138]

Yet another case for getting it in writing and signed.

Some people will never learn that “ I thought” don’t work to well in court.

[LB 15 4,643]

1 hour ago, Black Sox said:

Is This your partner?

Eccentrica Gallumbits is the far-famed triple-breasted whore of Eroticon Six. Some people say her erogenous zones start some four miles from her actual body. Ford Prefect disagrees, saying five. It is possible that the Big Bang was actually one of her orgasms. She wrote The Big Bang Theory - A Personal View by Eccentrica Gallumbits and It's Just One Boob After Another.

What in God’s name are you muttering about?

[alphafb552 369]

14 minutes ago, LB 15 said:

What in God’s name are you muttering about?

42

[KC375 1,640]

Put the boat up for sale through a broker. Any partners who wants ownership can compete for it in the open market by matching or bettering any legitimate offer.

[Glenn McCarthy 188]

This is a legal question based on the jurisdiction.

For example, in Illinois, any partnership property where a partner wants out is to be put up for sale.

It can be bought by anyone, including the remaining partner(s) which allows a fair market price to be created.

[kent_island_sailor 3,414]

Exhibits A, B, and C why I would rather own 100% of the worst 3KSB in the marina than 25% of the best boat in Annapolis.

 

[BravoBravo 666]

[redboat 35]

Why would any outsider want to buy a share of this heap of chaos and  bitterness? Liquidate asset, divide the proceeds after satisfying outstandings, walk away and accept that you've just paid for a semester's tuition in Life University's "I'll Never Do That Again" College.

[Steam Flyer 4,782]

11 minutes ago, redboat said:

Why would any outsider want to buy a share of this heap of chaos and  bitterness? Liquidate asset, divide the proceeds after satisfying outstandings, walk away and accept that you've just paid for a semester's tuition in Life University's "I'll Never Do That Again" College.

^ this ^

I have owned two boats in partnership, with the same person... the 2d boat was bigger and much more expensive so we brought in more partners; the good thing is that this gives you a circle of people with real stakes in the boat for care and maintenance. In my case, we argued a little about who got to drive (and of course the worst driver made the loudest demands) and we all agree on goals/priorities... in theory. When push came to shove, I was reluctant to spend money but one of the other partners rudely refused to do so. We squeezed him out then over the next year the partnership dissolved ... sort of amicably, no big fights. The boat was known as a winner so it wasn't that hard to sell. Very very different economic times.

I resolved to never own a boat in partnership again. Too much like sharing a woman or a fine musical instrument.

FB- Doug

[Alaris 173]

Not talking to a lawyer when dealing with an issue like this is like not doing preventive maintenance. Sure, it will work for a while. Maybe a long while. But when it goes wrong it is going to cost you a lot more money and headaches than if you had just done it right in the first place.

Even though it may seem like all is lost at this point, and there is not a ton of money involved compared to what a lawyer will cost (I’d guess $1,500 if you can find a reasonable guy. Don’t go to a big firm),  HIRE A LAWYER. 

[nlmasopust 18]

1 hour ago, Glenn McCarthy said:

This is a legal question based on the jurisdiction.

For example, in Illinois, any partnership property where a partner wants out is to be put up for sale.

It can be bought by anyone, including the remaining partner(s) which allows a fair market price to be created.

Somewhat unfortunately, I think this case is welllll outside Illinois jurisdiction, or even USA for that matter.... 

I think the solution being sought here is more along the lines of what a 'gentleman' (gentleperson?  What's the PC term for that?) might do.

[KC375 1,640]

8 minutes ago, Alaris said:

Not talking to a lawyer when dealing with an issue like this is like not doing preventive maintenance. Sure, it will work for a while. Maybe a long while. But when it goes wrong it is going to cost you a lot more money and headaches than if you had just done it right in the first place.

Even though it may seem like all is lost at this point, and there is not a ton of money involved compared to what a lawyer will cost (I’d guess $1,500 if you can find a reasonable guy. Don’t go to a big firm),  HIRE A LAWYER. 

Maybe even hire the lawyer as the last act of the partnership.

A little sensible legal advice - given to all - might point out the viable solutions. If you all get  the same unbiased advice it reduces the risk of the dumbest thing you could do...litigate.

[Al Paca 311]

4 hours ago, Black Sox said:

Is This your partner?

Eccentrica Gallumbits is the far-famed triple-breasted whore of Eroticon Six. Some people say her erogenous zones start some four miles from her actual body. Ford Prefect disagrees, saying five. It is possible that the Big Bang was actually one of her orgasms. She wrote The Big Bang Theory - A Personal View by Eccentrica Gallumbits and It's Just One Boob After Another.

Shakespeare wrote like a school boy compared to this guy. 

[jesposito 126]

11 hours ago, Xenophon10000 said:

My friend bought a 1/3 share in a new performance race boat in March 2017. He had sailed with both partners and considered them friends. They didn't put anything in writing regarding the use or sale of the boat (WHOOPS).

A quick timeline:

March 2017 3 partners purchase and import sailboat

Early 2018 Partner A moves away and indicates he wants to sell his share.

July 2018 Partner B says he is interested in selling his share. Partner A offers his share for US$14,300 to other partners

August 2018 Partners A & B claim they will buy all shares for US$6,400 each. They list their shares for more than US$6,400. Partners A & B never list their shares for less than US$6,400 each.

September 2019 Partner A requests boat is stored on the hard pending sale. Boat is hauled out. Partner A demands other partners buy his share for US$6,400 or he be allowed to buy other partners shares for US$6,400. Partner A threatens to take one third of the boat if other partners don't comply. Friend agrees to list entire boat for sale. Partner B withdraws to offer to buy all shares for US$6,400.

March 2020 Boat is reduced to to US$24,000, discussions begin about remaining price cuts to reduce boat price to US$19,200, allowing sale to Partner A.

May 2020 Partners A & B discover carbon spreader is broken off mast in storage.

June 10, 2020 Partner A withdraws US$6,400 offer for other shares, offers US$4,800 for other shares, demands US$6,400 for his share if other partners won't sell.

July 2020 Partners A & B inform my friend there will an auction/process where if my friend wants to sell he must compete with Partner B who will sell for US$4,800, but if he wants to buy out the boat he must compete with Partner A who will buy for more than US$4,800 per share, but will not disclose what price he will sell. The process is closed to outsiders. This process seems silly and designed to disadvantage my friend and not maximize recoveries.

My friend just wants to keep using his 1/3 of the boat and his partners to sell their shares to outsiders and replace themselves. My friend might be able to buyout the other's shares, but he is time limited and would require new partner/s to really campaign the boat. There is every chance market value is lower and my friend would get hit reselling the shares to new partners. What can or should my friend do?

Thanks

Your friend should go down to the yard with a chain saw and cut the boat in 3.

Collect the insurance money

The look on the other partners faces would be priceless

[Black Sox 660]

10 hours ago, LB 15 said:

In order to fully advise you we are going to need to see pics of one of the partners tits - all 3 would be preferable. 

 

5 hours ago, LB 15 said:

What in God’s name are you muttering about?

Hey, you’re the one who wanted to see all 3 tits. 

NTTAWWT. 

#ApostropheLivesMatter

 

[Black Sox 660]

2 minutes ago, jesposito said:

Your friend should go down to the yard with a chain saw and cut the boat in 3.

Collect the insurance money

The look on the other partners faces would be priceless

Solomon’s wisdom?

[apophenia 148]

Hiring a lawyer over a $20k issue sounds like a good way to ensure your favorite lawyer can make her boat payments. Which may be an excellent strategy if she’s got a cool boat and likes to invite you to crew.

A good lawyer should cost around $300-$400 an hour. Budget for $400 and four hours per person. That’s twelve hours total, $4,800.

Suggest to the group that $15k is a good value for the boat (less the assumed lawyer’s fees), but if you don’t hire lawyers, $20k split three ways. If everyone agrees, WRITE IT DOWN AND SIGN THE DAMN NAPKIN. Then initiate funds & title transfer.

Or just sit quietly and wait for the inevitable auction when marina fees go unpaid long enough.

 

To win this, you need to convince your partners that you are either sufficiently generous or enough of an asshole that they would rather take your deal than go to court or continue bickering. As much as I enjoy holding grudges, generosity is usually the cheaper and easier path, in the long run. 

[Kenny Dumas 248]

Do the three have a common trusted fourth (preferably an old woman) they could buy dinner for?

[Glenn McCarthy 188]

4 hours ago, nlmasopust said:

Somewhat unfortunately, I think this case is welllll outside Illinois jurisdiction, or even USA for that matter.... 

I think the solution being sought here is more along the lines of what a 'gentleman' (gentleperson?  What's the PC term for that?) might do.

It makes not difference, courts around the world do not want to be involved in these disputes, which is why laws get created to alleviate the courts of trivial matters like this.  Look to your local laws for the simplest answer.

[Cashelmore 7]

Have a friend cuff the rudder and withhold the key until a reasonable deal is reached. /s

[kent_island_sailor 3,414]

By FAR the cheapest solution is to sell the boat. You could even bid on the boat and end up paying yourself.

[Team Subterfuge 14]

13 hours ago, MR.CLEAN said:

Why paying a lawyer is a lot cheaper than it seems

Exhibit A: the OP

 

 

Hiring an attorney to draft a partnership agreement for a $24,000 boat (or to protect your 1/3 share of $8,000) is like buying an extended warranty for a $20 Best Buy toaster - just not cost effective.  Other then setting up a procedure to sell the boat, it is unlikely that any partnership agreement will cover the problems that do come up.  

Then there is the problem of legal fees to enforce the partnership agreement.  You cannot cost effectively hire an attorney to litigate an $8,000, $6,400, or $4,800 claim or litigate the purchase of sails.

And, if the parties are stupid enough to have an attorneys fees clause, some idiot will run up (or threaten to run up) a legal bill that exceeds your investment by a very, very large margin.

The only good thing a partnership agreement does is set down in writing the expectations of the parties as to how and who uses the boat, sharing costs, what costs will be shared, and, hopefully, a budget for sail replacement - which does not require an attorney.  The best advice will come from (a) a person who has a long term successful partnership and (b) a person who can point out why their partnership failed.  

It sounds like the parties are on the right track by selling the boat.  Selling factional interests to unknown third parties is a recipe for disaster since you already have problems agreeing what to do with "friends".

Just like the toaster, you hope for the best with a partnership but part of the cost of a partnership is knowing that things can and will go wrong. 

[fufkin 357]

39 minutes ago, kent_island_sailor said:

By FAR the cheapest solution is to sell the boat. You could even bid on the boat and end up paying yourself.

Advice from mediator: sell it

Advice from judge: sell it

Advice from lawyer who is a good friend: sell it

Advice from hired lawyer: let me take a look at things 

 

 

[kent_island_sailor 3,414]

Disagree about the lawyer - at the start of all this. AOPA has boilerplate partnership agreements already written. They may not exist for boats, but a really simple contract stating that "in case of dispute, the boat will be sold for fair market value and the proceeds split three ways" would have been worth an hour of lawer-time.

[SloopJonB 7,977]

A friend has been in partnerships his entire life - over 40 years worth at this point.

Always documented, never a problem.

Carefully choosing partners is important but not as important as documentation.

[hobie17li 17]

I guess that I am going to have to call my

lawyer in order to see any tits

[Breamerly 74]

1 hour ago, kent_island_sailor said:

Disagree about the lawyer - at the start of all this. AOPA has boilerplate partnership agreements already written. They may not exist for boats, but a really simple contract stating that "in case of dispute, the boat will be sold for fair market value and the proceeds split three ways" would have been worth an hour of lawer-time.

^this

If your lawyer immediately suggests a thirty-hour retainer and a lien on your house, you might consider.... getting a different lawyer.

If your lawyer is gentle in the way he ravages you, a standard contract ought only take an hour or so. On a couple of recent items (a lease and a release of claims) my lawyer even just looked over what I had written up, made a couple of tweaks, and billed me half an hour. 

[AnotherSailor 252]

Asking for a friend... 

ok! 

Well, yes, obviously a big mistake in not having anything in writing. I have been in various partnerships, including with friends and partners who became friends. One did not work out for a variety of reasons and we could simply follow the agreement without any hard feelings. 

You do however mention that the shares were "listed." I am not sure how your local situation is, but is this a shared title to the boat? Even if that is not the case, anything in writing (including emails and text messages) can be used in  a court. I am not entirely sure I understand the whole process described, but how do they have legal rights to start an auction (under these strange terms). It really sounds they teamed up against your friend for financial benefit. 

I really have a strong dislike to lawyers and all the parts of our society they represent, but I think Clean might be right. If your friend knows a lawyer that could make a phone call or send a letter, their tune is likely to change quickly. 

[SloopJonB 7,977]

FWIW there are agreement documents available on the web. I've used purchase agreements I've found there and they were more than adequate for 4 figure purchase.

Getting well into 5 figures I'd find a good looking one and have it vetted by a contract lawyer for a few bucks.

Partnerships can vary quite radically - full 1/3 ownership to usage shares with no equity participation so one size won't fit all.

The area that seems to cause the most disharmony is working on it - arranging work parties for bottom paint and so forth commonly causes a lot of friction. The most successful partnerships I've seen write cheques for all significant work.

The other biggie is breakage & loss.

Obviously from this thread, it's essential to have buyout covered as well. The friend I mentioned currently owns 1/2 of a boat he started with 1/5 of. Their agreement is that members have right of refusal on all members shares, at market value at the time.

[LB 15 4,643]

Any tits yet?

[Team Subterfuge 14]

22 hours ago, Xenophon10000 said:

My friend bought a 1/3 share in a new performance race boat in March 2017.

Early 2018 Partner A moves away and indicates he wants to sell his share.

September 2019 Partner A requests boat is stored on the hard pending sale. . . Friend agrees to list entire boat for sale. 

March 2020 Boat is reduced to to US$24,000, discussions begin about remaining price cuts to reduce boat price to US$19,200, allowing sale to Partner A.

My friend just wants to keep using his 1/3 of the boat and his partners to sell their shares to outsiders and replace themselves. My friend might be able to buyout the other's shares, but he is time limited and would require new partner/s to really campaign the boat. There is every chance market value is lower and my friend would get hit reselling the shares to new partners. What can or should my friend do?

The above is a more concise summary of the facts and "friends" ridiculous that Partners A and B wait around for "friend" to find new partners.

The simple answer is for "friend" to just make an offer to buy boat and then find new partners.  Done.

[CaptainAhab 154]

Open marriages and three ways always end in tears. 
 

This obviously depends on your financial situation. The $6400 number was based on something. I would take 50% of that $3200 to walk away from the mess. The amount of time and aggravation to come out with more is probably not worth it. It’s on the hard. It’s slightly damaged. You can’t use it. You guys are now paying storage fees. It could take forever to find a buyer. Your money is stuck in a losing venture. 
 

Finding new partners is madness. 

[AnotherSailor 252]

1 hour ago, Team Subterfuge said:

The above is a more concise summary of the facts and "friends" ridiculous that Partners A and B wait around for "friend" to find new partners.

The simple answer is for "friend" to just make an offer to buy boat and then find new partners.  Done.

I have an even more concise summary: WTF?

[Al Paca 311]

18 hours ago, alphafb552 said:

42

Original radio broadcast 42 years ago!

 

[Black Sox 660]

10 hours ago, hobie17li said:

I guess that I am going to have to call my

lawyer in order to see any tits

Does your lawyer have decent tits?