Dream Yacht suspending Guaranteed Charter Income payments

[leboyd]

I don't know the contract either, however, it seems like it basically goes like this. You buy a boat (you are the owner of the boat and mortgage). You lease it to DYC for a guaranteed period of time and amount. DYC says, "sorry, we can't pay. You can have your boat or we'll start paying again in 6 months and extend the contract by 6 months."

As the OP said, he can say, "Nope. I'm taking my boat." And DYC would probably say, "okay."

[letsgetsailing3]

Originally Posted by belizesailor

The best legal advice any attorney can give you is to say out of court.

BINGO

[LittleWing77]

Originally Posted by letsgetsailing3

Well, since you went to the trouble to make this post, would you mind explaining how this process actually works?

I'll admit, I don't quite understand it. Explain it like I'm a 5 year old.

Thanks

I'm with letsgetsailing. My understanding is tha both Dream Yacht Charters (DYC) and Freedom Yacht Club are like time-shares for boats...?

I'd love a further explanation of the experience from the boatowner side. Not the hype-and-sales pitches I saw at the Toronto Boat Show.

As Boat Clubs like this and Sailing Clubs - where someone else owns and maintains the boat - are the most rapidly increasing demographic in the Boating Industry (source: Boating Ontario Conference Nov 2019), I'm curious what the experience is really like.

Thanks!
LittleWing77

[belizesailor]

I doubt that DYC took this action without consulting legal councel. As others have posted, there is almost certainly a clause or clauses which allow them to do this. If so, they have in fact not violated the contract.

If the OP seriously wants to pursue legal action on this then he should have an attorney review the contract. I suspect he will find the above.

Legal review of the contract should also clearly define boat owner's options in this scenario.

[valhalla360]

Originally Posted by redneckrob

Every single liability release waiver you've ever signed in the US was legally unenforceable, and their lawyers were all fully aware of that fact when they drafted them. But they still have you sign them in hopes that you'll think you signed away your rights if you are hurt and not come after them. So see a lawyer... absolutely great advise. A company trying to pull one over on you by brandishing around legal terms they hope you don't understand.... standard practice and in fact not generally itself illegal so always worth a try from their perspective.

I would love to see a reacted contact if anyone has one they're willing to share.

If you sign off on the 6 month delay/6 month extension, you are now party to an updated fully enforceable contract.

But again, the legal technicalities are largely irrelevant. If you push to enforce the contract, you simply drive the business into bankruptcy and now you are sitting on a boat and mortgage with no way to generate rental income...you can win judgments all day long but if there's no money, it doesn't matter.

[belizesailor]

Originally Posted by valhalla360

If you sign off on the 6 month delay/6 month extension, you are now party to an updated fully enforceable contract.



But again, the legal technicalities are largely irrelevant. If you push to enforce the contract, you simply drive the business into bankruptcy and now you are sitting on a boat and mortgage with no way to generate rental income...you can win judgments all day long but if there's no money, it doesn't matter.

DYC is one of the larger charter companies. One boat owner wont drive them into bankruptcy, but something foolish like a class action law suit could. Easily definable class, but ultimately a foolish idea I think for the same reasons you state.

Also depends on the laws of the venue as defined in the contract. Dont know if a class action is even allowed under the law in Mauritius which I read has a legal system derived form both British & French systems.

Mauritius reads like a little nation that has its act together.

https://en.m.wikipedia.org/wiki/Mauritius

[belizesailor]

Another thought...

Ive had a boat in charter with a charter company that went bankrupt. However, in my case it was a small company and I was very much involved with them as a boat owner, instructor, and charter captain (as has been the case all 3 times that Ive had boats in charter management). So early on I could see things were going into a death spiral. Because of that, I was able to extract what funds I could from them, and they worked off most of the rest with labor at no charge...then I took my boat outta there. Then they filed. The rest of the mostly absentee owners were just screwed.

This is one reason I emphasize in charter ownership related posts to be as involved as you reasonably can in the charter base operations. I realize most owners cannot be as involved as I have been, but at least try and cultivate a good relationship with the base manager and other staff. These relationships can really pay off in situations like this and often do result in you and your boat being treated better even during normal times.

In stark contrast, filing a law suit just means they are going to sever any direct contact with you and lawyer-up. In the end an unsecured creditor (AKA boat owner) suing a finacially troubled company will likely not yeild anything except a large invoice from your attorney. That is the only thing you know for sure about going to court...attornies will make money...all the rest is a crap shoot.


OP: how is your relationship with the base manager?

[letsgetsailing3]

Originally Posted by LittleWing77

I'm with letsgetsailing. My understanding is tha both Dream Yacht Charters (DYC) and Freedom Yacht Club are like time-shares for boats...?

I'd love a further explanation of the experience from the boatowner side. Not the hype-and-sales pitches I saw at the Toronto Boat Show.

As Boat Clubs like this and Sailing Clubs - where someone else owns and maintains the boat - are the most rapidly increasing demographic in the Boating Industry (source: Boating Ontario Conference Nov 2019), I'm curious what the experience is really like.

Thanks!
LittleWing77

All I could find on line were sales brochures. Looks like you buy a boat from them, and then they guarantee you income and maintenance for 5 1/2 years under several different programs.

Not sure how people feel about the value/service/maintenance vs depreciation, or whether people keep the boats or sell them after their contract.

[a64pilot]

Originally Posted by redneckrob

Every single liability release waiver you've ever signed in the US was legally unenforceable, and their lawyers were all fully aware of that fact when they drafted them. But they still have you sign them in hopes that you'll think you signed away your rights if you are hurt and not come after them. So see a lawyer... absolutely great advise. A company trying to pull one over on you by brandishing around legal terms they hope you don't understand.... standard practice and in fact not generally itself illegal so always worth a try from their perspective.

I would love to see a reacted contact if anyone has one they're willing to share.

I forst became aware of that in the 1070’s, racing motorcycles. We had to sign release waivers in order to race of course, and that had already been overturned in California, reason was no sign, no race, and apparently that violates some kind of right you have at least in California.

But of course what it really amounts to is you get to hire a Lawyer and apparently in this case fight it in a foreign country, with the likelihood that if you actually win, and if you actually gets compensation, it’s likely to not be much by the time fees are paid.
But most likely any assets they actually have are first limited, and secondly very well sheltered in a foreign country, so first it’s unlikely you will win, but if you do it’s unlikely there are any real assets you could get.

So you go to a good lawyer, and if he’s honest most likely you will be told that yes he can win the case, but it’s extremely unlikely that you’ll get enough to even pay his bill.

[valhalla360]

Originally Posted by belizesailor

DYC is one of the larger charter companies. One boat owner wont drive them into bankruptcy, but something foolish like a class action law suit could. Easily definable class, but ultimately a foolish idea I think for the same reasons you state.

Also depends on the laws of the venue as defined in the contract. Dont know if a class action is even allowed under the law in Mauritius which I read has a legal system derived form both British & French systems.

Mauritius reads like a little nation that has its act together.

https://en.m.wikipedia.org/wiki/Mauritius

Filing an independent lawsuit internationally...10-1 it costs more to pursue than you get back, so some sort of class action is the only reasonable approach...and that bankrupts the company.

[belizesailor]

Originally Posted by a64pilot

I forst became aware of that in the 1070’s, racing motorcycles. We had to sign release waivers in order to race of course, and that had already been overturned in California, reason was no sign, no race, and apparently that violates some kind of right you have at least in California.



But of course what it really amounts to is you get to hire a Lawyer and apparently in this case fight it in a foreign country, with the likelihood that if you actually win, and if you actually gets compensation, it’s likely to not be much by the time fees are paid.

But most likely any assets they actually have are first limited, and secondly very well sheltered in a foreign country, so first it’s unlikely you will win, but if you do it’s unlikely there are any real assets you could get.



So you go to a good lawyer, and if he’s honest most likely you will be told that yes he can win the case, but it’s extremely unlikely that you’ll get enough to even pay his bill.

I had a business case like that once (not charter related). It was a clear vioaltion of contract and had substantial potential damages associated with it. I discussed with attorney, he agreed we had a very good case, but he also expected the oppossing small company would fold up like a house of cards as soon as we filed.

He put it into perspective for me: "Im confident we can win this case. Legal expenses will be about $250K. Payment of damages by defendant is unlikely. How bad do want to win for the sake of winning?"

We took our lumps and walked away.

[belizesailor]

Originally Posted by valhalla360

Filing an independent lawsuit internationally...10-1 it costs more to pursue than you get back, so some sort of class action is the only reasonable approach...and that bankrupts the company.

That was my point.

[a64pilot]

Originally Posted by LittleWing77

I'm with letsgetsailing. My understanding is tha both Dream Yacht Charters (DYC) and Freedom Yacht Club are like time-shares for boats...?

I'd love a further explanation of the experience from the boatowner side. Not the hype-and-sales pitches I saw at the Toronto Boat Show.

As Boat Clubs like this and Sailing Clubs - where someone else owns and maintains the boat - are the most rapidly increasing demographic in the Boating Industry (source: Boating Ontario Conference Nov 2019), I'm curious what the experience is really like.

Thanks!
LittleWing77

It’s not just boats, but very often vacation homes, a great many beach houses going up in the Panhandle of Fl are managed rentals, the owner of course signs the mortgage and is liable, but they turn the house over to a management company that gets a large share of the profits and has pretty much zero liability. The game is of course that the owner gets a free beach house that they can use X number of days a year, or even rent those days out to increase their profits, but other people pay for it, and they often can even write it off on taxes, but I don’t pretend to know the rules on that.
Sometimes it works, and sometimes the house gets torn up and or sees excessive wear etc. and I assume just like time shares there are very often fees that your not made aware of, assessments or something.
All this is supposition as I have not looked into it myself, just going off of what I have observed, but I have no personal knowledge.

To me anything that seems to be too good to be true, often is. What I cant understand is if it’s such a profitable business, why don’t the management companies just buy the boats and houses themselves, if it’s the can’t lose high profit business they say it is, banks would line up to lend them money.
Why share the profits with the house or boat owners whine they can increase their profits by not.

Now for some I’m sure it works, but I’m too risk adverse myself.

[redneckrob]

Suing them is probably a waste of time and money, absolutely. But this isn't a binary choice of sue them or sign the modified contract. The one thing of value here is the owners boats. It seems crazy to leave a $500k to $1.5M asset in the hands of a company you know is in severe financial distress. Are they really going to be maintaining your boat for he next 6 months? Is there even going to be someone still working at the charter base to make sure you don't have a leaky hatch that's filling up your bilge and feeding a mold infestation? When they go under, are you sure their creditors aren't going to claim your boat as an asset of the company and you end up spending big legal bucks not to win anything but just to get your asset back? And how long will that take, and how much care will they be putting into maintaining your boat as the case they know they'll eventually lose winds it's way through court?
Obviously you can't go get the boat this very minute, but you will most probably be able to in the next 6 months or sooner. Heck, if you spent a little time getting to know the folks at the charter base you probably know a half dozen newly laid off boat maintenance experts, any one of which would be happy to retrieve your boat and keep a close eye on it until you can get it. Just signing a new contract and leaving your boat with one of these companies seems like insanity at this point!

[a64pilot]

An issue is that many that go down this route do so because they can’t afford to pay for a new beach house or new boat.
Another issue is most people aren’t doing well in this Pandemic so if they couldn’t pay for the house or boat before it, how are they going to now?