Buying Catamaran from Sunsail (TUI Marine)

[fly2kite]

We are considering buying a catamaran from Sunsail Charters in the Meds. It seems the process is different that we have heard from our US brokers.

They want a 10% down payment wired directly into their company account. An independent/3rd party escrow is according to the sellers brokers "not accepted".

This seems very fishy to me since Sunsail is basically an LLC and doesn't provide any money safety in the sense of a FDIC or government backed entity.

Does anybody has any advice on how to deal with that? Is that common practice?

Thanks.

[ol1970]

Trust your instincts and run away from this deal. Seriously with all of the uncertainty right now in the charter boat industry you are gambling big time. If you want to buy it to put into charter, just charter on your own. If you want to buy a boat to go sail now, wait 4-6 months to see if countries are going to open back up again or there will be a second wave. Also by that time my guess is you’ll start to see the first distressed sales take place. Not to mention the fact you’ll better understand if Sunsail will have going concern issues with their long term viability.

[fly2kite]

Thanks, we want to buy it for personal use only - We hope the Meds will open up a bit in the summer months and then do the ARC.

[ol1970]

The med being open this summer? There are 200,000 people dead and 1,000,000 active COVID19 cases in Europe as of May 14th, the Med is not going to be "open" like normal this summer, and if it was you shouldn't risk it. Take this season off, if you just have to go sail, I'd be willing to bet you can get a hell of a deal on a long term charter.

[fly2kite]

Of course - we will follow the guidelines strictly - We are currently residing in Europe btw. and it seems that starting June 15th some countries with low numbers are already starting to loosen the restrictions for travel and tourism e.g. Croatia, Slovenia. However, the reason why we are looking in purchasing this boat right now is the lower demand and we hope for a good deal ;-). So any advice on the OP is highly appreciated especially is somebody has purchased from them before. As far as I know Sunsail and Moorings are basically the same.

[ol1970]

I started the process of buying a boat from Sunsail a few years ago. I used a buyers broker who handled the deposit money and acted on my behalf. The catamaran was not as advertised when I started the survey, the starboard engine actually billowed black smoke and they tried to switch the boats they were offering me at the last minute. I backed out of the deal and my deposit was refunded.

Short story, unless you are desperate to buy a boat immediately, beware! I think that you could go through with a transaction with the scenario you described, but don't think for 1 second that you are getting some sort of "deal". They are professionals and if they are unloading something they are the ones getting the better end of the bargain. I'd have no issue chartering with Sunsail again though, I have loved every trip I've done with them, but my experience taught me to look elsewhere for a purchase option.

[redneckrob]

You're an unsecured creditor and will get pennies back on the dollar...years from now, if/when they file for bankruptcy while holding your deposit. In normal times that may very well have been the common practice in the Med, but that in no way makes it a safe thing to do today given the financial condition of the charter companies.

It's actually even worse. You could buy the boat, pay the full price, and if they go bankrupt shortly after the creditors could claim fraudulent conveyance and claw it back. The better the deal you got on the boat, the more likely they are to win a fraudulent conveyance ruling.

Run away from this, plenty of private sellers there right now.

[MikeFergie]

Yes it’s normal for sunsail and moorings to ask for the deposit which is 10% of the value and they put this into their escrow account. This blocks the boat from being sold to anyone else. You then do the survey and haul out if you wish ( which you pay for). If the survey ER finds things needing work they will fix them or discount the boat a bit for you. If the survey is good and you walk away from the deal then you lose your deposit.

That’s how it worked in 2015 when I bought my boat from them.
Don’t let the prophets of doom here deter you if you like the boat and are set on it. Moorings sunsail are the biggest so safer than any of the others

[rabbi]

Originally Posted by MikeFergie

Yes it’s normal for sunsail and moorings to ask for the deposit which is 10% of the value and they put this into their escrow account. This blocks the boat from being sold to anyone else. You then do the survey and haul out if you wish ( which you pay for). If the survey ER finds things needing work they will fix them or discount the boat a bit for you. If the survey is good and you walk away from the deal then you lose your deposit.

That’s how it worked in 2015 when I bought my boat from them.
Don’t let the prophets of doom here deter you if you like the boat and are set on it. Moorings sunsail are the biggest so safer than any of the others

A company may not accept a client broker holding the deposit. But if a company refuses to accept a neutral escrow account then this smells fishy.

Being a huge company doesn't mean much these days - they have larger monthly costs than smaller charter companies but the same revenue : 0

[redneckrob]

Originally Posted by MikeFergie

Don’t let the prophets of doom here deter you if you like the boat and are set on it. Moorings sunsail are the biggest so safer than any of the others

It's not at all clear that being "biggest" is of any benefit whatsoever when it comes to avoiding bankruptcy. If you had some insight into which companies had the least debt service cost, the most cash on hand, the most credit available to tap, the lowest costs in the current financial climate....those would all be relevant concepts. "Biggest".....not really relevant. GM and Chrysler were two of the three biggest car manufacturers in the U.S. right before they declared chapter 11, remember?

If there's anything specifically that folks who are urging caution are saying that's incorrect it would be great for you to articulate that. Calling us "prophets of doom", however, isn't really helpful because it lacks any specifics and appears to be just random name calling based on a vague hope that these companies will pull through? Going through the list of specific issues we raised and pointing out those that are are incorrect would much more helpful.

[capn_billl]

Mine was from Sunsail in US. I have mixed feelings as it appears several parts were swapped at the last minute with older, more broke parts.

Very shaky company to do business with.

[KC375]

Here is one POV about buying from moorings. Relevant part starts at 5:03


https://youtu.be/cxSeTG-w12Q?t=304

[Lake-Effect]

I would NOT be buying from any charter company right now, unless it's a bona fide great deal on a boat that you happened to have chartered like last week. And are maybe still sitting on.

Wait a few months...

[Cheechako]

I would stay away from anything like that right now. These companies could be a minute away from bankruptcy at this point, why take the chance?

[J.R.]

Actually I won't pay one cent to any TUI company. Yesterday TUI announced that they were loosing 300m EUR each month and asked for government money in Germany. Some days ago there was a big trouble in Thailand since TUI informed 2,000 hotels that they couldn't pay their bills for the first quarter of 2020.