MarineMax sued for restricting sale of company stock
January 27, 2012
Filed under News
NEW YORK — MarineMax, along with its CEO, chief financial officer and vice president, are being sued by the former owners of Surfside-3 Marine Inc., who alleged MarineMax cost them more than $7 million by restricting their ability to sell the company’s stock while it continued to decline, according to a suit filed Thursday in U.S. District Court, Eastern District of New York.
Paul Barbara, along with siblings Diane Kenney and Angela Chianese, sold Surfside-3 to MarineMax in March 2006 for $45 million, 55 percent of which was paid in cash while the remaining 45 percent was to be paid in MarineMax common stock on the condition that Barbara or his co-owners would not be able to sell the stock for one year, according to the complaint.
Barbara said at the time of the agreement MarineMax’s stock was approximately $31 per share. By the end of the first year, MarineMax’s stock had dipped to $23 to $24 per share, he said.
Eager to sell the shares at the end of the one-year restrictive period, Barbara said he and his representatives took the necessary steps to have the restrictions immediately lifted on April 1, 2007.
However, according to Barbara and the complaint, the restriction was not lifted on that date. Instead, it was not lifted until August 2009.
Barbara says reason for this delay has not been made known to him to this day.
“I don’t know what defense they can make for not issuing my stock for when it is due. I guess the only reason would be it was something I didn’t perform on my end. But they have not said that,” Barbara said.
Although he acknowledges there is no proof, Barbara said a plausible reason delaying the lifting of the restriction was the effect selling the shares would have on MarineMax’s stock.
“The only reason that I can come up with is we had a big block of stock and it was evident we wanted to get out of it. So, by holding us off and then selling millions of dollars, that is a reason,” Barbara said.
“We contacted them and said, ‘What is happening?’ Every day I saw the stock go down and everyone selling it. It just got kind of pushed aside and ignored,” he said.
Between April 2007 and August 2009 when the restriction was lifted, MarineMax CEO William McGill Jr. sold more than $7.4 million worth of MarineMax stock; Michael Lamb, MarineMax’s chief financial officer, sold more than $1 million in MarineMax stock; and Michael Aiello, MarineMax vice president, sold more than $83,000, according to the complaint. All of which are listed as defendants in the lawsuit, along with MarineMax Inc.
Boating Industry contacted MarineMax, who said they were early in the process of reviewing the lawsuit, but said the claims have no merit.
Barbara said he and his lawyers met with MarineMax on Tuesday as part of a last effort to reach a settlement before the filing, but both sides were unable to reach an agreement.