Dream Yacht suspending Guaranteed Charter Income payments

[redneckrob]

Originally Posted by Flomalo

Does the entry into a bank's capital in Fountaine Pajot, and therefore indirectly in DYC, serve as collateral in the face of DYC's financial difficulties?

To answer your last question in a word, no. First, it was a private equity subsidiary of Arkea that bought the share of FP. That's very different from what we normally think of as "a bank". They're in the business of using significant leverage to buy companies, leading to the opposite of financial stability. But more importantly, it's fundamental to the concept of a corporation that the owners of a corporation aren't liable for it's debts. Just like if I as a shareholder in Enron wouldn't have been responsible for the debts of Enron when it went bankrupt, FP isn't in any way responsible for the debts of DYC simply by virtue of owning part of it, and Arkea is once removed again.

So no, they don't serve as collateral. They might opt to keep them afloat as a customer for their product, but even then the cleanest option would be a reporg under bankruptcy, at which point owners in your situation would be fighting for pennies on the dollar. This was all very predictable and in fact very accurately predicted in this very thread just shy of a year ago.

[GoingWalkabout]

Go to the SEC. Their sales docs are akin to prospectuses. Go to your State AG. Demand a criminal investigation. They now have moved a lot of floating assets to the USA. These can be liened in a Federal Court handcuffing them from moving these assets out of USA waters. Lay claim against their USA assets. First to claim will be first in line at the Bankruptcy auction. Lastly get together with boaters who have had theft from their boats and nullification of contract terms and hire a great Bankruptcy lawyer. He/she will know how to go after every asset including potentially the officers of any corporation who have committed alleged evil deeds. Last, contact WaPo or NY Times. Get the scandals on the front pages in the media. Nothing like front page scandals to get politicians to kick Government agencies into action. Present yourselves as working Americans who have been robbed if that is the case. Just my initial plan for fighting back. Do not hire a regular run of the mill lawyer. A good Bankruptcy lawyer will know all about the potential crimes and how to go after assets etc. Do not use a typical suburban lawyer. You need a corporate Bankruptcy specialist. IMHO.

Originally Posted by mvweebles

From a previous post - not the OP. Sort of speaks for itself. Also read #261. Similar story. Both have the ring of truth. Valhalla, guessing you're just one of those contrarian types. I'm sure there are some details missing. But the gist sounds consistent.

" DYC was financing our boat and we made a contract for them to sell it and reimburse our part. But now the boat is sold, chartered in Key West and we did not get our money."

[GoingWalkabout]

One big risk for FP is if they had a board seat and or any say in the operating of the troubled business. Any good Bankruptcy Lawyer will be able to pin the tail on the donkey.

Originally Posted by redneckrob

To answer your last question in a word, no. First, it was a private equity subsidiary of Arkea that bought the share of FP. That's very different from what we normally think of as "a bank". They're in the business of using significant leverage to buy companies, leading to the opposite of financial stability. But more importantly, it's fundamental to the concept of a corporation that the owners of a corporation aren't liable for it's debts. Just like if I as a shareholder in Enron wouldn't have been responsible for the debts of Enron when it went bankrupt, FP isn't in any way responsible for the debts of DYC simply by virtue of owning part of it, and Arkea is once removed again.

So no, they don't serve as collateral. They might opt to keep them afloat as a customer for their product, but even then the cleanest option would be a reporg under bankruptcy, at which point owners in your situation would be fighting for pennies on the dollar. This was all very predictable and in fact very accurately predicted in this very thread just shy of a year ago.

[Bullshooter]

Originally Posted by Flomalo

...In 2015 Nexstage (https://www.nextstage.com/), a French investment company, took a 38% stake in the capital of the catamaran builder Fountaine Pajot.

In October 2017 Nexstage and Fountaine Pajot took a majority stake in DYC.
Nexstage has invested € 14m and Fountaine € 11m. DYC committing to acquire a significant share of the production of Fountaine Pajot.

On November 30, 2020, Nexstage sold its entire stake in Fountaine Pajot to a French bank (Crédit Mutuel Arkéa) for € 24 million.
Fountaine Pajot announces a drop in sales of around 20% for 2020.

Wow, I am not sure I am following this correctly, but did Nexstage score a
€ 10m profit on its investment AFTER months of the pandemic? I'm not sure what their total investment into FP was.

[BlueSkyOne]

Originally Posted by Bullshooter

Wow, I am not sure I am following this correctly, but did Nexstage score a
€ 10m profit on its investment AFTER months of the pandemic? I'm not sure what their total investment into FP was.

I think the 14m was the investment into DYC not FP so don't think their profit on the sale of FP is linked to the 14m put into DYC. I guess the troubles in the charter market may have been a factor in them selling out of FP - I assume that now the order backlog is cleared and charter orders look a long way off it was a good exit point. If what is on this thread is true then there could be a lot more issues to come.

[Flomalo]

Originally Posted by Bullshooter

Wow, I am not sure I am following this correctly, but did Nexstage score a
€ 10m profit on its investment AFTER months of the pandemic? I'm not sure what their total investment into FP was.

Here is a translation of a publication in an french economic review (https://capitalfinance.lesechos.fr/d...-pajot-1266923) :

The announcement was made on November 19, 2020. NextStage is about to sell its 37% stake in Compagnie du Catamaran, the holding company at the head of Fountaine-Pajot, to Arkéa Capital Partenaires. The validation of this transaction still requires obtaining a waiver from the AMF, since this holding company controls the catamaran manufacturing company listed on Euronext Growth. Arkéa CP was preferred to a European family office in the final stretch of the sale process, which gave pride of place to long-term investors. This was led by Mazars Corporate Finance (adviser to the Fountaine family, the majority in Compagnie du Catamaran) and by Vulcain (adviser to NextStage). The amount of the transaction is not disclosed at this stage, but it would be, according to our information, close to € 24 million, which is the current market value of this indirect part of the capital of Fountaine-Pajot. On this basis, NextStage would realize a nice capital gain, since the investor had injected € 7 million in 2015 to acquire this stake. "We have known the group for a long time and in particular had already studied an investment five years ago when NextStage carried out the transaction, recalls Thomas Trideau, regional director of Arkéa Capital. Despite the impact of Covid-19 - which greatly disrupted the end of the 2019-2020 financial year, with the closure of the shipyard during the spring confinement - we wanted to become a shareholder of this beautiful historic and family mid-sized company in Nouvelle-Aquitaine , because we believe that the fundamentals are still as buoyant. "

Fountaine-Pajot has indeed suffered greatly from the health crisis, since it closed its last financial year at the end of 2020 with a turnover of 168 M €, i.e. almost 20% below the 207 M € recorded a year earlier. . However, the first half of the year foreshadowed a prosperous year, with € 95.6 million in sales and € 12 million in EBITDA generated at the end of February 2020, against € 79.7 million in revenue and € 8 million in EBITDA. one year earlier. This turnaround due to the crisis marks a decade of uninterrupted growth. The company posted only € 32.2 million in sales in 2009-2010, for a net result that was negative at the time. "This drop in activity inevitably had an impact on the valuation level adopted, judges a source familiar with the matter."

[Flomalo]

Originally Posted by Flomalo

Here is a translation of a publication in an french economic review (https://capitalfinance.lesechos.fr/d...-pajot-1266923) :

The announcement was made on November 19, 2020. NextStage is about to sell its 37% stake in Compagnie du Catamaran, the holding company at the head of Fountaine-Pajot, to Arkéa Capital Partenaires. The validation of this transaction still requires obtaining a waiver from the AMF, since this holding company controls the catamaran manufacturing company listed on Euronext Growth. Arkéa CP was preferred to a European family office in the final stretch of the sale process, which gave pride of place to long-term investors. This was led by Mazars Corporate Finance (adviser to the Fountaine family, the majority in Compagnie du Catamaran) and by Vulcain (adviser to NextStage). The amount of the transaction is not disclosed at this stage, but it would be, according to our information, close to € 24 million, which is the current market value of this indirect part of the capital of Fountaine-Pajot. On this basis, NextStage would realize a nice capital gain, since the investor had injected € 7 million in 2015 to acquire this stake. "We have known the group for a long time and in particular had already studied an investment five years ago when NextStage carried out the transaction, recalls Thomas Trideau, regional director of Arkéa Capital. Despite the impact of Covid-19 - which greatly disrupted the end of the 2019-2020 financial year, with the closure of the shipyard during the spring confinement - we wanted to become a shareholder of this beautiful historic and family mid-sized company in Nouvelle-Aquitaine , because we believe that the fundamentals are still as buoyant. "

Fountaine-Pajot has indeed suffered greatly from the health crisis, since it closed its last financial year at the end of 2020 with a turnover of 168 M €, i.e. almost 20% below the 207 M € recorded a year earlier. . However, the first half of the year foreshadowed a prosperous year, with € 95.6 million in sales and € 12 million in EBITDA generated at the end of February 2020, against € 79.7 million in revenue and € 8 million in EBITDA. one year earlier. This turnaround due to the crisis marks a decade of uninterrupted growth. The company posted only € 32.2 million in sales in 2009-2010, for a net result that was negative at the time. "This drop in activity inevitably had an impact on the valuation level adopted, judges a source familiar with the matter."

And, here is the press release of Nexstage for selling his stake in FP :

https://www.nextstage.com/sca/2020/1...e-du-nautisme/

[redneckrob]

Originally Posted by GoingWalkabout

One big risk for FP is if they had a board seat and or any say in the operating of the troubled business. Any good Bankruptcy Lawyer will be able to pin the tail on the donkey.

I think you have a mistaken idea that holding a board seat in a corporation makes one liable for the debts of that corporation. If that was the case then no company would ever be able to attract an outside board member, or for that matter any board member willing to take on that liability.

[mvweebles]

Originally Posted by GoingWalkabout

One big risk for FP is if they had a board seat and or any say in the operating of the troubled business. Any good Bankruptcy Lawyer will be able to pin the tail on the donkey.

You realize these types of lawyers charge upwards if $500/hr? Due to the nature of their clients, they require a cash retainer upfront.

Even where there is demonstrable fraud, constructing these cases is very difficult. When the FBI goes after white collar criminals, they descend with a team of lawyers and accountants and it still takes more than a year.

Peter

[Jim Woodall]

Originally Posted by aqfishing

So when we were looking at our next yacht I asked this question:

"In the Dream Easy program, what would happen to your 35% deposit and claim to your yacht should DYC become insolvent before the end of your term?"

The Guru's answer was:


"The chance that the boat would become part of the insolvency are pretty good so you would loose it.

If you consider the 35% an advance payment on charter use the longer it lasts the less the risk.

Essentially the risk of DYC closing its doors is minimal - you take bigger risks than this every day.

DYC is now the largest operator in the world and has private equity money and in the process of going public.

Risk reward is definitely tolerable.

Cheers
Stephen Cockcroft
Dream Yacht Sales"

Easy to say when it's not your money. Needless to say, we chose the guaranteed income with another company, who is still paying(for now!). This gave us ownership and title of our asset. Any problems, we go and collect our asset.

However there could be some real bargains to be had at this time. If you are wanting to get in on these I suggest taking a deal where you have title of the yacht.

Folks, some of the principals at DYC, especially in the BVI, would be well versed in this area. The old TradeWinds operation that literally shuttered its doors had some of the same management team. TradeWinds, operating out of Fat Hog's Bay, simply stopped operation one day. The base was abandoned and owners' boats left tied to the docks unattended and neglected. Charterers showed up for fully-paid charters to find the doors locked and bolted (literally). Some owners contacted other charter companies and they made their way in, found the keys to the boats, and sailed them to their respective charter docks. That was close to 20 years ago, and it was a big deal at the time for the BVI charter industry. The old-timers in the BVI charter industry can tell you the whole, sorted story. Many were surprised when some old TradWinders showed up at DYC.

When I spoke to DYC I found the information I was being given to be either likely false or too good to be true. I had done lots of chartering with different companies and owned sailboats for many years. I was no expert on anything, nor was I a naive fool - which is how DYC treated me. I did a little investigating of the management team at DYC in the BVI and what did I learn, to some extent TradeWinds reincarnated. That was it for me as far as DYC goes.

My reservations about DYC in the BVI were confirmed immediately post-Irma. I attended the 2017 Annapolis Boat Show already knowing the fate of my catamaran in the TMM fleet, a total loss. Every TMM owner had by that time been sent a spreadsheet with the likely fate of every boat in TMM's fleet. I spoke with numerous DYC owners at the show who all said they had no clue about their boats. I'm sure a few had been updated, but they were not in the group of 4 - 5 owners we spoke with at Middleton Tavern the first day of the show. Later, 2 of the owners I traded contact information with, told me they got no definitive information on their boats for months. Meanwhile, Barney Crook at TMM had already had my boat pulled from Road Reef Marina, surveyed, and I was paid out 100%. I ordered a new boat during the 2017 show. What a difference.

[Boat Guy]

Originally Posted by Jim Woodall

Folks, some of the.....

Can't tell you how many boat shows I've been to, or how many pitches I've heard....It's so hard to tell the who's being straight with you...But, to your point, there was little question in my mind the deals I was hearing, and the sales pitches were from people that had experienced the financial downfall years ago and resurfaced with much more knowledge of how to play the game and be protected when the music stopped...


All the sales pitches and "ego boosting" seemed to flounder when I would ask the hard questions as to who was left holding the bag during downturns. I think most others I saw at the shows signing on the dotted line either had much more money, or less concern for "what if" scenarios than I did...


I really wanted to be that guy...But, something about buying the depreciating asset while the management company controlled the costs, maintenance, and payouts lead me to believe what you've expressed, that they were far more experienced in the industry and how to weigh things in their favor...esp. when / if the music stops...


That said, I'm still sitting back trying to understand the disparity between the fallout and the asking catamaran prices...

[Sand crab]

The Catamaran Company has a new program guaranteeing income and they say they will put $50,000 in escrow in your account.
https://www.catamarans.com/new-sail-...program/181207

[CaptainRivet]

Originally Posted by Sand crab

The Catamaran Company has a new program guaranteeing income and they say they will put $50,000 in escrow in your account.
https://www.catamarans.com/new-sail-...program/181207

a piece of toilet paper has more value then this guarantee

[jmh2002]

Originally Posted by CaptainRivet

a piece of toilet paper has more value then this guarantee

Well, maybe. But money in an Escrow (Trust) Account for the duration of the contract is at least a better way for a company to start showing that they are serious about some of their claims of guaranteed income (contractural fine print not withstanding).

[Barra]

Originally Posted by jmh2002

Well, maybe. But money in an Escrow (Trust) Account for the duration of the contract is at least a better way for a company to start showing that they are serious about some of their claims of guaranteed income (contractural fine print not withstanding).

True but you don't need to be a financial engineer to know that it's you that is paying for the escrow account and the guaranteed income for the first 2 years.

Built into the sale price and and financing rate of 7.5% ( even if you aren't financing you are borrowing the escrow amount)

Imho the only way to do these things is buy your charter boat so you have title and a non inflated sale price and then do a separate charter management contract for max 12 months at a time with whoever you like the look of.