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Chia

Malibu loses lawsuit

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Chia

Malibu dinged 3.1 million for breach of contract.

http://boatingindustry.com/news/2016/09/19/jury-orders-malibu-boats-to-pay-3-1-million-to-marine-power-for-breach-of-contract/

A recent suit between Marine Power, LLC and Malibu Boats, LLC for a breach of contract has been concluded in Marine Power’s favor,according to documents obtained by Boating Industry.

Marine Power, a company that designs, manufacturers and sells high-performance sport boat engines, alleges the company entered into a business relationship with Malibu Boats. Through it, Malibu agreed to buy engines through purchase order 557 PO, which called for Marine Power to manufacture 571 engines for a total purchase price of $5,954,102.00. By the end of March 2014, Malibu informed Marine Power that it did not wish to pursue a long-term agreement with the company and would not be using Marine Power as a supplier of any engines for model year 2015.

Marine Power alleged it entirely or substantially performed its obligations under the 557 PO and Malibu breached its obligations, damaging Marine Power.

A jury in the United State District Court of the Eastern District of Louisiana found that a contract existed between the two companies and that it was a contract to build. The jury determined Malibu Boats owes Marine Power $1.8 million as a result of Malibu’s termination of the contract. Because the jury determined the contract was terminated in bad faith, Malibu Boats owes Marine Power an additional $1.3 million in damages for lost profits, for a total of $3.1 million.

“We are pleased that the federal court jury in New Orleans rendered a verdict in Marine Power’s favor finding that Malibu’s unilateral termination of a Purchase Order with Marine Power for 571 custom engines designed for Malibu’s Wakesetter boats was without just cause and in bad faith, and awarding Marine Power its full damages in the amount of $3.1 million,” a spokesperson from Marine Power told Boating Industry. “Marine Power has always been committed to working with its customers as partners and to building and delivering the highest quality engines, and the jury’s verdict in this case vindicates these core values of our company. While it is likely that Malibu will appeal, we are confident that the jury’s verdict will be upheld.”

“We were disappointed with the outcome of the case and while we disagree with the jury’s findings we respect the process,” a spokesperson for Malibu Boats told Boating Industry. “We are now considering all of our legal options including appeal. Based on our understanding of the facts we believe that we have several alternatives available to us and expect that in due time we along with our legal team will proceed with our next steps.”

The case was filed in April 2014. Though it was originally terminated in May 2014, it was reopened in June 2015.

Edited by Chia

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wedge88

I'm guessing these weren't 350 motors at that price?

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The Hulk

Prepare for price hikes! 

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Steve B.

I'm guessing no Marine Power engines for Malibu for awhile too.

Steve B.

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kx250frider617

Weren't these all the 14' ls3 engines that people kept having computer issues with?

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ahopkinsVTX
Just now, kx250frider617 said:

Weren't these all the 14' ls3 engines that people kept having computer issues with?

Yes. I think there were other issues outside of the actual performance of the engines as well. 

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MadMan

That works out to a little over $10k each.

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plano86skier

looks like only $400 less than what you can buy one straight from their website right now. 

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Dare2goBare

There's always two sides to every story. ... and it will be very intresting to just see how this event will eventually unfold. 

I can't imagine that Malibu would just pull the plug on a deal without some serious thought and reasoning behind there decision, and legal 

advise from there attorneys.  But just the same, the court favored Marine Power. Guess we stay tuned. 

Sure hope this doesn't reflect right onto the boat pricing, especially the MTC Screen...lol... .. always a concern. 

 

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RTS

If they maintain unit volume and actually have to pay this next year, that's only about $870 they will have to add to each boat to pay for this.  Shouldn't be an issue on $100K boats.  :(

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DarkSide

I am suspecting the $10k includes Vdrive.  Indmar is that way, my warranty tranny did not come from malibu but indmar.   

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sledandski

Rumor I heard a while back when this started was that Indmar bought a bunch of Malibu stock when Malibu started putting the MP engines in.  Then told Malibu that it was time to stop using MP engines. 

 

 

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RTS
29 minutes ago, sledandski said:

Rumor I heard a while back when this started was that Indmar bought a bunch of Malibu stock when Malibu started putting the MP engines in.  Then told Malibu that it was time to stop using MP engines. 

 

 

 Seems unlikely given J.P. Morgan looks to be the largest shareholder with about 9% of the stock. Indmar would have had to have bought a heck of a lot more than that if they were going to exhibit that kind of control over Malibu.  Especially forcing them into decisions that cost them a $3.1M lawsuit.

Edited by RTS

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oldjeep

interesting considering all the problems that were documented on this forum with the MP engines. Figured they dropped them because of all the warranty issues.

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nyryan2001

More of the Jackie Springer leadership at play.

 

 

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sledandski
1 hour ago, RTS said:

 Seems unlikely given J.P. Morgan looks to be the largest shareholder with about 9% of the stock. Indmar would have had to have bought a heck of a lot more than that if they were going to exhibit that kind of control over Malibu.  Especially forcing them into decisions that cost them a $3.1M lawsuit.

I know where your coming from. I would think it would have to be a huge amount of stock too that would be documented somewhere, but even then I don't know what they could all do. That's why I called it a rumor.  It's what I heard but not sure all the pieces stack up. 

 

 

 

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Woodski

Seems odd there was not a termination clause in the contract itself addressing that very issue to avoid any legal action. 

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wakerider107

That's a couple lawsuits in the past few years isnt it?

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WakeSwagger

Coming from a not so proud owner of a MP LS3, Malibu should have never experimented with multiple suppliers to begin with. After all, this is a company that has made a conscience effort to minimize the # of suppliers they use. 

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85 Barefoot
40 minutes ago, WakeSwagger said:

Coming from a not so proud owner of a MP LS3, Malibu should have never experimented with multiple suppliers to begin with. After all, this is a company that has made a conscience effort to minimize the # of suppliers they use. 

They have used multiple suppliers many times in the past and continue to do so (PCM and Indmar presently, used to be mercruiser too).

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Fman

What I don't userstand is why the MP engine was so much different/problematic than Indmar.  Don't they have the same guts and they just bolt on components to it?  Do they use different wiring harnesses?  I agree with the above, best thing Malibu did was ditch them after one year and get rid of some headaches.  Countless posts on here about problems with the MP engines.

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tn_rider
On 9/19/2016 at 6:17 PM, RTS said:

 Seems unlikely given J.P. Morgan looks to be the largest shareholder with about 9% of the stock. Indmar would have had to have bought a heck of a lot more than that if they were going to exhibit that kind of control over Malibu.  Especially forcing them into decisions that cost them a $3.1M lawsuit.

Interesting, going to call my acct manager in the morning and see if I'm holding any Malibu stock. Not likely but would be pretty cool! 

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RTS
8 minutes ago, tn_rider said:

Interesting, going to call my acct manager in the morning and see if I'm holding any Malibu stock. Not likely but would be pretty cool! 

If you have an account manager that has you directly invested in MBUU, I'd be looking for another manager.  Especially if he put you in such a speculative stock without your knowledge. But chances are you do have some explosure, albiet a small one, through the various institutions that hold the stock in mutual funds and such. 

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