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Cruisers Net publishes Loose Cannon articles with Captain Swanson’s permission in hopes that mariners with saltwater in their veins will subscribe. $7 per month or $56 for the year; you may cancel at any time.
When all else fails, try journalism. Dear Readers, The past 30 days have seen Loose Cannon running on all cylinders. Gosh, I hardly know where to start. Two adult men ordered me to “cease and desist” in connection with my reporting on the downfall of Catalina Yachts (and the character who briefly owned the company). You’ve got to read the Q&A via text with “boatbuilder extraordinaire” Michael Reardon, if you haven’t already. What a hoot! It’s as if saying cease and desist was like some kind of magic spell to banish a demon. Abracadabra! Be Gone! Reardon wanted me to stop, but he couldn’t stop himself from talking. This is a trait common among fast-talkers who really do think they are the smartest person in the room. (Journalism may not pay, but it does teach you some things.) At one point, Reardon called me “negative-news man.” Then, there’s the latest on Wally Moran, another piece of work who now resides in an ICE detainment facility in Louisiana, where he is plotting to blackmail his way to freedom. This information came through a sketchy fellow Canadian, a YouTube sailor named Michael Potts, who recorded a phone call from Moran then posted it on his Patreon channel after telling Moran he wouldn’t—“you have my word.” Those two dudes deserve each other. After my story, Potts sent me an AI definition of copyright infringement because I posted a portion of his video of him talking to Moran over the phone. I replied to him with an AI definition of “Fair Use,” the exception to copyright laws that pretty much summed up my use of his back-stab video. While were on the topic of threats, I thought I’d share a nasty message Moran left for me a few years ago. In less “negative” .news, Loose Cannon covered two new nautically themed books with author Q&As. One was with Steve Thomas on the occasion of the re-release of “The Last Navigator.” Another was with James Evenson, author of the most excellent “Be the Captain: A Field Manual.” A Coast Guard Safety Bulletin on the Sea-Doo Switch fully corroborated Loose Cannon’s reporting on this flawed jetski-pontoon boat hybrid. Finding the answer to why these things were flipping over forward on deceleration began a year ago with my Google query: “How much does a gallon of water weigh?” These a just a few of the 22 stories published here since mid-October, by me or some of my outstanding writer-friends. Substack RulesSubstack is a wonderful platform for me. It handles the business end of this enterprise and keeps track of all kinds of stuff. I don’t force anyone to subscribe by putting any of my latest work behind a paywall, but I was curious how many of my free subscribers had been with me for three years—aka since the “early days.” Substack counted 1,905, more than 500 of whom were very active over the past month for email opens and web views of Loose Cannon stories. Consider this a pitch to those 500. Obviously, you like the product. No one else is publishing these kinds of stories. My business model assumes my free people are fair-minded, well intentioned and will eventually upgrade to paid. Consider this a passive-aggressive reminder. A satisfying number of you have already upgraded to paid. Thank you all. But it sure would be nice to have more people fully on board because, in the parlance of my youth, I am working my ass off. Feliz Navidad, PapiMeanwhile, I recently announced having recruited a single commercial sponsor—a boutique tequila brand. Another way you can support the Loose Cannon newsroom is to travel to the Bellagave sales website and buy a couple bottles just in time for Feliz Navidad. For free shipping, use the promo code LCFREESHIP (which saves you $19.95). LOOSE CANNON is a reader-supported publication. Support the work. Upgrade to become a paid subscriber. © 2025 |
The Florida Fish and Wildlife Conservation Commission (FWC) reminds all cruisers about Manatee Awareness Month.
| Nov. 12, 2025
Go slow and look below for manatees on the move November is Manatee Awareness Month, highlighting a time when Florida’s manatees are starting their seasonal movements to warmer waters around the state. The Florida Fish and Wildlife Conservation Commission (FWC) is sharing the reminder that Floridians and visitors should be extra mindful this time of year to watch for manatees when on the water. “Manatees are highly dependent on safe and reliable warm-water sites to survive the winter,” said Michelle Pasawicz, FWC Manatee Management Program Coordinator. “As water temperatures drop below 68 degrees Fahrenheit, Florida’s manatees seek refuge at springs, power plant discharge areas and other warm water sites where they’ll spend the winter until temperatures rise again in spring.” Despite their large size as adults, manatees can be tough to spot in the water. Going out on a boat or personal watercraft? You can better see manatees by wearing polarized glasses, going slow and abiding by all manatee protection zones. During colder months, seasonal manatee zones require boaters and personal watercraft users to reduce speed in or avoid certain areas to prevent collisions that can injure or kill manatees. Manatee protection zones are marked by waterway signs; maps of these zones are available online at MyFWC.com/MPZ. Boat strikes are a major threat to Florida manatees and FWC law enforcement officers patrol state waters, informing boaters of seasonal manatee speed zones and taking appropriate enforcement actions when necessary. Boaters and personal watercraft users are reminded to comply with the regulatory signs on waterways. When viewing groups of manatees at warm-water sites, it is important to give them space. Disturbing manatees at these sites can cause them to swim out of protected areas and into potentially life-threatening cold water. Manatees are a protected species, and it is illegal to harass, feed, disturb or harm them. If you see an injured, distressed, sick or dead manatee, report it to the FWC’s Wildlife Alert Hotline at 888-404-FWCC (3922) so that trained responders can assist. Do not try to physically handle an injured or sick manatee yourself, which can cause more harm to the animal and potentially put you at risk of serious injury. Educational resources for waterway users and other interested members of the public are available at MyFWC.com/Manatee. The Viewing Guidelines page on this website provides helpful tips on how to respectfully observe manatees, additional guidelines for boat and personal watercraft operators, and information on what you can do to help with manatee conservation. For those looking to support the FWC’s manatee research, rescue and management efforts, you can purchase a Florida manatee license plate or donate $5 to receive a collectable FWC manatee decal. Both are available from your local Tax Collector’s office. |
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Tropics Tranquil; Warm And Dry For A While
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There is always plenty to do around Charlotte Harbor. While berthed at Fishermen’s Village Marina, A CRUISERS NET SPONSOR, you are certain to enjoy visiting Western Florida’s beautiful Charlotte Harbor/Peace River.
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The Cruisers Net team is deeply saddened to announce that our editor, Larry Dorminy, has passed away.
Larry was a long-time member of the Cruisers Net team and will be sorely missed. He was passionate about boaters and making sure they had the most up-to-date information. Larry was beloved by the cruising community that he had dedicated his retirement years to supporting.
Here is a link to his obituary: https://www.meyersfh.com/obituaries/wendell-dorminy
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Notice received from the USCG regarding the Trident Swim in Charleston, SC, this Sunday, November 16, 10 am to 1 pm.
Passing for awareness that The Charleston Trident Swim will take place on Sunday, November 16, 2025, from 10:00 a.m. until 1:00 p.m. The 4.1-mile swim will begin at the Charleston Maritime Center, proceed around the Battery, and conclude at Brittlebank Park pier and dock. All vessel traffic is advised to transit with caution in the vicinity of the event. Concerned vessel traffic can contact the official event patrol via VHF-FM Channel 16. For questions or concerns regarding this MSIB, please contact the Sector Charleston 24-hour Command Center at (833) 453-1261.
Come swim around Charleston and help us “never leave a man behind”. The Charleston Trident Swim course is approximately four (4.1) miles, although it includes a tidal assist for approximately one-third of that swim. This is a fundraiser that supports the Navy SEAL Foundation (NSF), a 501(c)(3) with a coveted four-star rating by Charity Navigator. 100% of the net proceeds will go directly to support the mission of the NSF.
While $2000 is the ideal fundraising goal per swimmer, the majority of swimmers raise over that amount, many raise much more. If you continue on with registration, we ask that you bring the same fundraising commitment as you would be taking the slot of a swimmer who has every intention of meeting or vastly exceeding that goal. If you’re registering just to set a PR or check off a bucket list item, this may not be the swim for you. Please remember,
THIS IS MORE THAN JUST A SWIM.

Cruisers Net publishes Loose Cannon articles with Captain Swanson’s permission in hopes that mariners with saltwater in their veins will subscribe. $7 per month or $56 for the year; you may cancel at any time.
When all else fails, try journalism. ‘Be the Captain’ Excerpt: Lying to a Sea AnchorFirst, Have One. Second, Deploy It Correctly
This excerpt from the newly released book, “Be the Captain,” is the second of two parts. The first, appearing earlier this week, was a Q&A with author James Evenson entitled “New Manual Like ‘Chapman’ But With Attitude. There’s a moment no sailor wants to face: the moment when you’re not just battling a storm, you’re crippled. No engine. No rudder. No way to steer. You’ve exhausted every tactic, and now it’s survival time. That’s when the sea anchor comes out. A sea anchor isn’t about comfort; it’s about survival. It holds the bow into the waves when nothing else can. It buys you time. It prevents your boat from being rolled by breaking seas. And if you think you’ll never need one, let me tell you the story that taught me otherwise. The Day My Boat Split in HalfI thought I knew storms. I thought I knew what my boat could take. Then one night off Hawaii, I learned what it means to lose everything. We were pushing hard, trying to stay ahead of a weather system on a passage from Fanning Island, Kiribati, to Kona, Hawaii. The forecast gave us a window. The Pacific Ocean had other plans. The seas built to around 30 feet, and sometime after midnight, I felt it: that sickening moment when the boat lifts clear into the air and then drops. When we hit the water, there wasn’t just a crack. There was a loud, awful ripping sound. Instantly, I knew something was seriously wrong. I grabbed a light, crawled into the hull, and saw the moon reflecting off the water inside the boat. My catamaran was splitting apart beneath me. I looked at my girlfriend, Kim, and said, “Babe, this is bad. I’m not sure how to fix this.” She inspected it herself. “Can’t we just tie it together with ropes?” My first reaction was to say, “No way, that’ll never…” Then I said, “Wait a minute… that might actually work.” For the next three hours, I went into the water four times, lashing lines around the hulls in every possible way. We rigged blocks, Dyneema, anchor rode, and anything we had. It looked like a spiderweb from hell, but somehow it held together until morning. The one thing that saved our asses, and nearly killed me in the process, was the sea anchor. The first time I deployed the sea anchor, it swung the bow into the seas, stopping the breaking waves from hitting us broadside. The relief we felt in that moment. I can still feel it today. It turned the worst imaginable situation into something survivable. Waves stopped crashing over us. Water stopped pouring into the hull. Then, the damned thing collapsed. The anchor was undersized for the boat, and I paid the price for that mistake. I had to haul in 400 feet of soaking-wet, half-inch, 8-plait line, untangle it, and redeploy. I did that four times before my body gave out. I couldn’t lift it anymore. But still, that anchor held when nothing else could. You’ll probably never need a sea anchor. But if you ever do, it will become the most essential piece of equipment on your boat. I now keep one in my aft lazarette, appropriately sized. It’s one of those items you hope collects dust forever. And if that day comes, it’s the only thing that matters. How To Deploy a Sea Anchor CorrectlyA sea anchor isn’t just something you throw over the side and hope for the best. It must be set up deliberately, with serious attention to load, angle, scope, and chafe. Start by attaching it to your strongest forward cleats, ideally through a dedicated bridle. This distributes the force evenly and keeps the bow locked onto the waves. A heavy-duty swivel is essential. Without one, the rope will twist under load and collapse the chute. If that happens, you’re not pulling in a 100-pound sail; you’re dragging thousands of pounds of seawater over hundreds of feet of line. It’s brutal, exhausting, and dangerous. Scope is everything. You want the parachute to settle fully submerged in the second wave ahead of your bow, creating a complete wave trough between the boat and the anchor. When set correctly, you’ll see the dynamic clearly: The rode taut over the trough, completely out of the water, disappearing cleanly into the face of the next wave. Even at night, you can usually see it. That’s how you know it’s stable, loaded, and holding. You’ll need a significant line length, around 400–600 feet. The best setup is a single length of 8-plait anchor line, pre-rigged for this purpose. But realistically, most cruisers don’t carry that. If you need to join multiple lines to achieve adequate scope, use a Zeppelin bend (see 3E). Avoid using bowlines, as they can chafe and cause loss of the anchor. If a chain is used, ensure the rope-to-chain connection is extremely secure. The loads here are not theoretical; they’re survival-level. Use the longest, strongest lines you have and protect them from chafe. Stretch is beneficial but not mandatory. Survival is the priority. Depending on your boat and the sea state, you may experiment with angled deployment. Instead of running the bridle directly forward, split it between forward and midship cleats. This cants the bow slightly off the wind and widens the slick behind the anchor. Some sailors believe this helps flatten breaking waves and calm the sea between the chute and the boat. While I haven’t personally tested this, it makes sense to me. Chafe is your biggest enemy. Add protection at contact points. Monitor constantly. Storm after storm, lost sea anchors result from chafe. If the bridle parts, you’re suddenly a cork in a washing machine, and the next wave might not wait for you to recover. Sea Anchor Vs. Drogue: Know the Difference
LOOSE CANNON covers hard news, technical issues and nautical history. Sometimes he tries to be funny. Subscribe for free to support the work. If you’ve been reading for a while—and you like it—consider upgrading to paid.
You’re currently a free subscriber to LOOSE CANNON. For the full experience, upgrade your subscription. © 2025 |
Elizabeth City sits at the southern terminus of the Dismal Swamp Canal and has the well-earned reputation of being a transient-friendly town with free dockage for 72 hours.
I personally use Kanberra products on my boat
and can attest to their effectiveness.
Cruisers Net publishes Loose Cannon articles with Captain Swanson’s permission in hopes that mariners with saltwater in their veins will subscribe. $7 per month or $56 for the year; you may cancel at any time.
When all else fails, try journalism. The Tribune newspaper of Nassau is reporting that marinas in the Bahamas are experiencing a a 20- to 60-percent decline in bookings “as they brace for a ‘dismal’ winter season.” The big reason, of course, is higher boater entry fees announced in July without notice or consultation with interested parties. Every year, Bahamas tourism officials man one of the bigger booths at the Fort Lauderdale International Boat Show; others booths represent Bahamas resorts and marinas. This year, reps reported getting an earful. The Tribune quoted Peter Maury, Association of Bahamas Marinas (ABM) president, as saying that captains and boat owners intend to divert to the Caribbean or the Florida Keys because the Bahamas “is not worth it anymore.” Plus, the Bahamas may well have a Canadian problem too. Effective July 1, 2025, the new cruising fees were raised to $500 for vessels under 50 feet, $1,000 for vessels between 50 and 100 feet, and $3,000 for vessels over 100 feet. There are also mandatory anchoring fees of $300 and $350 respectively. Before that it was $150 for boats under 34 feet for three months and $300 for boats over that, which included a fishing permit. Now, a fishing permit is an additional $100 a month. A separate fee structure was introduced for the new Frequent Digital Cruising Card (FDCC), which is valid for two years: $1,500 for boats under 50 feet, $2,500 for boats 50 to 100 feet and $8,000 for boats over 100 feet. Maury told Tribune Business Editor Neil Hartnell that the whole system stinks:
Most Canadian cruisers to the Bahamas—Maury told Loose Cannon they constitute about 20 percent of the whole—do not go back and forth from Canada itself, instead keeping their vessels in Florida storage yards during the off-season. The same negative feelings that are keeping Canadian tourists from visiting the U.S. may apply to Canadian cruisers as well. Canadians are staying away in droves because they resent the tariff war waged against their country by the U.S. and the talk of forcing Canada to become the 51st state. Known for frugality, Canadians probably do not like the new fees anymore than their American counterparts. Parsimony and patriotism, taken together, may provide Canadian cruisers with an even greater incentive than the rest of us to stay away. “Just like yachts can boycott The Bahamas. Canadians can control where they spend their money,” Maury said. LOOSE CANNON covers hard news, technical issues and nautical history. Every so often he tries to be funny. Subscribe for free to support the work. If you’ve been reading for a while—and you like it—consider upgrading to paid. You’re currently a free subscriber to LOOSE CANNON. For the full experience, upgrade your subscription. © 2025 |
Elizabeth City sits at the southern terminus of the Dismal Swamp Canal and has the well-earned reputation of being a transient-friendly town with free dockage for 72 hours.
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The Cruisers Net team is deeply saddened to announce that our editor, Larry Dorminy, has passed away.
Larry was a long-time member of the Cruisers Net team and will be sorely missed. He was passionate about boaters and making sure they had the most up-to-date information. Larry was beloved by the cruising community that he had dedicated his retirement years to supporting.
Here is a link to his obituary: https://www.meyersfh.com/obituaries/wendell-dorminy
So sorry to hear of Larry's death and hope he is now cruising Fiddlers Green with those he helped along the way like me. RIP… to a fine man and condolences to his family and friends.
Larry was a great guy that went out of his way to help other boaters. He will be sorely missed.
Cruisers Net publishes Loose Cannon articles with Captain Swanson’s permission in hopes that mariners with saltwater in their veins will subscribe. $7 per month or $56 for the year; you may cancel at any time.
When all else fails, try journalism. This is a text exchange with Michael Reardon that happened after I asked him to comment on today’s main story, Michael Reardon’s Year of Living Dangerously. Loose Cannon: Michael, Peter Swanson here. I’m writing a story about what a bad year 2025 has been for you, and I have a few things to run by you. I have a tape on which you tell Catalina’s workers that there might be a solution their pay dilemma. You refer to the D100 tranfer to Europe: “I just delivered a 100-foot boat to France for Daedalus company. We haven’t received our final payment—as we should have—yet. A few technical issues need to be resolved on the boat.” How can you tell them you expected a final payment when there was probably a year’s worth of work to be done on that boat before it could seatrial? Michael Reardon: You only know 20 percent of a story, and have even less facts yet report it as gospel. The 100 is being fit out in France to avoid 25 percent tarrifs on European goods, i.e. all the interior and systems. You have previously reported in the worst way. Cease and desist. I am in confidentiality agreements from commenting further. L.C.: Why did you tell the folks at Catalina you would be getting a final payment for the D100? Reardon: The boat is still in construction, ergo payments incomplete. End! This is all I have left for you. Cease and desist! L.C.: With Catalina and Daedalus closed abruptly, why would anyone have the trust to put a down payment on a new Tartan? Reardon: Daedalus was not closed abruptly. It was a planned transfer. Catalina will reopen. L.C.: How? Reardon: None of your business, negative-news man. Run a positive news story on the largest export sailing yacht out of America in a decade. Then ask me for an interview in person. L.C.: Ex-Daedulus workers say the Muffs (Reardon’s financial backers) pulled out because you started a fight on the factory floor. Is that true? Reardon: $2.5 million savings on systems is the reason. Bye, bye now. L.C.: The part about the fight is true though. It’s on video. Reardon: You have only a portion. You don’t see the preemptive, where a worker is fired, then pushes me to the floor. You only see my reaction after. Again negative sell. Run a positive price, then we can have a news story L.C.: Just curious. Why did prosecutors drop the charges after you ran from local police in your car? Reardon: There was no run. I pulled in at the closest safe point on the two-lane road with no shoulder. Hence, charges dismissed. LOOSE CANNON covers hard news, technical issues and nautical history. Sometimes he tries to be funny. Subscribe for free to support the work. If you’ve been reading for a while—and you like it—consider upgrading to paid. You’re currently a free subscriber to LOOSE CANNON. For the full experience, upgrade your subscription. © 2025 |
From our friends at South Florida Sun Sentinel.
Cruisers Net publishes Loose Cannon articles with Captain Swanson’s permission in hopes that mariners with saltwater in their veins will subscribe. $7 per month or $56 for the year; you may cancel at any time.
When all else fails, try journalism. Michael Reardon’s Year of Living DangerouslyCatalina Yachts and Daedalus Close Doors. Can Tartan Survive?
This year has been an interesting one for boatbuilder extraordinaire Michael Alexander Reardon, to put it mildly. Reardon is a native of Australia who has created an image of himself—cheered on by our slavish boating press—as a hugely successful boatbuilder with a reputation for technically wizardry. His resume, as shown below, includes employers such as Gunboat, Skagen and Greenline. As we were about to publish, Reardon replied to a text message asking for his side of the story. You can read the interview here:
2025 TimelineReardon is arrested by police on February 5 for allegedly driving his unregistered car through a stop sign and speeding away from police “carelessly and heedlessly in willful and wanton disregard of the rights and safety of others.” (For the record, the North Carolina prosecutor dropped all traffic charges against Reardon without explanation.) On April 11, witnesses say, Reardon attacks a worker on the floor at the Daedalus yacht factory. Reardon ends up on the ground when a second worker intercedes. A third worker videotapes the tussle, news of which will have an outsized effect on the future of the Edenton, North Carolina, builder. Later in April, Reardon enters into a provisional purchase agreement with the California parent company of Catalina Yachts in Largo Florida. He takes ownership of the company with a requirement to make regular payments. In late July, Reardon’s financial backer—and purchaser of the only boat under construction at Daedalus—had the vessel hauled out of the factory and put on a ship to France for completion there. There was a dramatic video on YouTube showing the move, copied here: Best known as the inventor of Google Maps, Stefan Muff is advertised as Reardon’s partner in Daedalus. That carbon-fiber 100-footer above was being built for him and his wife, who visit frequently to check on the status of their boat. According to former Daedalus employees, some of whom had formed their own relationships with the Muffs, the Swiss couple had been looking for a way to shed themselves of Reardon and Daedalus. According to the ex-employees interviewed for this article, the fight on the factory floor provides the Muffs with a “last straw,” enabling them to nullify their contract. That’s when they take their boat and go back to Europe. On August 20, the Daedalus workforce is furloughed. Owned by the Muffs, the factory itself is listed for sale for $3.5 million. At some point in August, Reardon visits Anacortes, Washington, to discuss purchase of Tartan Yachts from owner Seattle Yachts. No one remembers Reardon saying anything about Daedalus going out of business. The sale of Tartan is finalized in September; the Ohio workforce is furloughed but returns to work soon after. On September 4, Reardon visits the Catalina factory for a talk with workers who haven’t been paid in weeks. In an audio tape obtained by Loose Cannon, Reardon can be heard telling workers that he was “under huge financial stress” but there is hope because of an expected windfall:
According to ex-Daedalus people, “a few technical issues” was a bit of an understatement. The boat that had left the Edenton plant was just a carbon-fiber shell, months or maybe a year away from any seatrial that would precede delivery and any final payment from the owner. (The total cost of the finished boat had been estimated at $35 million.) On September 18, California Catalina files a lawsuit against Reardon for non-payment of rent for the Florida Catalina factory and, by default, the $1 million promised for purchase of company assets—real estate, tooling, etc.
On October 14, the president of Catalina Yachts, Patrick Turner, is videotaped assuring workers that Reardon had “done his part,” trying to find an investor to keep Catalina going. According to Turner, Reardon had been dealing with an unnamed potential money-man who asked questions but did not commit. Turner announces that Catalina was shutting down “temporarily.” On October 22, a Florida court grants California Catalina’s motion to have Reardon evicted from Largo premises, so no one except the family of late Catalina founder Frank Butler, or a successor company chosen by them, can reopen the plant. In the accompanying Q&A, Reardon says the plant will reopen but doesn’t specify how. Meanwhile, the question has to be: With this kind of public record, who would ever be convinced to put a downpayment on a new Tartan? Reardon avoids answering that question in the accompanying Q&A with him. Ken Bauer of the Catalina Owners Association has his own take on Reardon’s track record:
LOOSE CANNON covers hard news, technical issues and nautical history. Sometimes he tries to be funny. Subscribe for free to support the work. If you’ve been reading for a while—and you like it—consider upgrading to paid. You’re currently a free subscriber to LOOSE CANNON. For the full experience, upgrade your subscription. © 2025 |
Phil Friedman publishes “For Yacht Builders, Buyers, and Owners”. FYBBO is a reader-supported publication. To receive new posts delivered directly to your email inbox, subscribe for free, or for the full experience, consider becoming a paid subscriber.
Are the Few Remaining U.S. Sailing Yacht Brands Circling the Drain?THE RECENT ELEVENTH-HOUR DEAL TO KEEP CATALINA YACHTS ALIVE FOUNDERS AFTER JUST A FEW MONTHS …
The Loose Cannon piece, coupled with all the industry hoopla at the recent Fort Lauderdale International Boat Show, got me to thinking what can only be described (politely) as a “general lack of financial transparency” in the boat and yacht building sector. More on that in a moment. But first, as the annual series of South Florida boat shows kicked off last week with FLIBS, the current state of the U.S. economy, tariffs and, specifically, the yacht manufacturing sector, lead me to ponder the danger signals that indicate a boat builder or manufacturer may be facing an imminent business failure. This is especially important to potential boat buyers, because boat buyers who order a new boat for construction and delivery at a later date almost always end up in the position of being unsecured creditors of the seller, with their deposits and any “progress” payments they’ve paid to date at exceedingly high risk in the event of a financial failure of the builder. The same also applies to any marketing entity (dealer, etc.) who may stand contractually sales chain between the buyer and the manufacturer in question.
If it looks like a red flag and waves like a red flag…Ironically, the single most telling sign of an impending financial failure is a backlog of multiple pre-sold or deposit-paid units sitting unfinished on the builder’s shop floor. Never mind that the common wisdom is that a bunch of builds in process are an indication of a thriving business. This is because a backlog of unfinished units, without any visible significant progress being made toward completing them for delivery to their buyers, signals that the manufacturer is out of working capital. Which is a condition no company can survive for any serious length of time. In such cases, if there is to be any chance of effecting a turnaround, without resort to bankruptcy filings, it’s essential to structure a creative financial plan that includes eliciting the agreement of secured and unsecured financial and commercial creditors, as well as the agreement and cooperation of the workforce (which is frequently owed back wages), plus buy-in from any existing dealers (who may be awaiting delivery of boats), as well as the consent of any boat buyers involved. Even then, a successful turnaround generally requires fresh, but significantly experienced, management that can run lean with the short-term goal in mind, namely, the completion and delivery of all pending unfinished builds and the generation of necessary cash flow which that brings with it. Anything less sets up a turnaround effort for almost certain failure. A reasonable level of caution and common sense…If you’re a potential (or actual) boat buyer, what does all this mean for you? If you’re contracting to have a boat or yacht to be built for you to order with, say, 10% down and the balance upon delivery of the finished vessel, then read no further. From a buyer’s standpoint, that is about as good as it gets. True, few buyers would be elated over losing $10K on a $100K, and even less so losing $100K on an unfulfilled million dollar contract. But to put 10% at risk is usually manageable for someone in a position to “afford” the full-ticket sale price of a discretionary luxury purchase, in the first place. However, if you, as a buyer, are required to put up more than that as a deposit, or if you’re required to make periodic “progress” payments during the build, you have to be particularly careful when buying a built-to-order boat or yacht. First and foremost, you must have a clear written agreement as to delivered price, all included options and features, and a firm final delivery date (often called a “drop dead date”), after which you have the option of cancelling the order and receiving a full refund of all monies paid to date. Note that I said you should have “the option”. This is because you may ultimately decide that, even though the builder is far behind schedule on completion and delivery, you really want the boat and are prepared to wait, just not forever. The drop-dead date in the sales contract assures that you won’t have to wait ad infinitum for your boat because the manufacturer just can’t get it done. And if you think that can’t happen, just take a look at the history of builders like Catalina which end up stalled with a dozen or more partially completed boats on their workshop floor — boats being built on contracts with significant payments outstanding to collect when those units are completed and delivered. Again, more on that later. There are also several important additional steps you can (and should) take to protect your interests, under the Uniform Commercial Code (UCC), which has been adopted, in part or in whole, by most states in the U.S. These steps are straightforward and focus on establishing a preferred first security interest in the boat during the period of time it is still in-process and could otherwise potentially fall subject to claims of creditors, should the builder fail financially. This security interest will extend to all monies paid to date by you, the buyer, in the form of deposits and progress payments. And will grant you a first secured mortgage on the vessel, which lien will have to be “perfected” (properly filed) with the state where the builder is registered to do business. Of course, you will not only have to bear the added cost(s) of proceeding under the UCC, you will generally have to push hard to gain the necessary cooperation from the dealer and/or the manufacturer involved. Consequently, you will need to gain agreement to cooperate from the dealer and the manufacturer before you place the order and pay your initial deposit. With a preferred first security interest and a perfected lien, you will stand ahead of unsecured creditors for satisfaction of your claim in the event that a company is liquidated in bankruptcy or the company assets are sold in liquidation for the benefit of creditors. Except, of course, for the bankruptcy lawyers and court costs. Which means you would have to be paid out before any of the proceeds of liquidation went to satisfy unsecured claims, for example, those for materials and fittings supplied by vendors to the boat manufacturer. Nothing in life is completely without some risk…Admittedly, it’s not a perfect solution, as there might not be sufficient value in liquidation to pay you out 100%. And it certainly won’t get you a completed boat. The most it would do is preserver you investment to date, but you’d then need to take possession and find a way to get the build completed. Still, it’s better than the alternative which, for unsecured creditors, is usually losing everything they’ve invested. Whether what you stand to get, in the instance, would be worth the effort and hard costs of establishing a preferred first security interest in the boat you’ve ordered and partially paid for, is worth it, depends on how much in dollars is at stake. And that depends on your net worth and resources. If you’re in a position to sustain, say, a five hundred thousand dollar loss without much noticing it, then perhaps the extra time and dollar cost of obtaining a preferred first secured interest isn’t worth the extra cost and effort. Understand that it’s entirely your call. Just don’t delude yourself into thinking a business failure will never overtake the firm manufacturing your boat. It never happens… until it does. And nobody ever loses money in a boat deal gone bad… until they do. — Phil Friedman Copyright © 2025 by Phil Friedman and Port Royal Group — All Rights Reserved Thanks for reading For Yacht Builders, Buyers, and Owners. FYBBO is a reader-supported publication. To receive new posts delivered directly to your email inbox, subscribe free or for the full experience, consider becoming a paid subscriber.
Postscript: Read the latest update on the Catalina Yachts saga, from Peter Swanson and the Loose Cannon newsletter: If you’re interested in the subject of transparency in the boat and yacht building sector worldwide, you might also want to look at the Loose Cannon article on the suit that’s recently been filed against Bering Yachts (Turkey) by two YouTube boat reviewers”: Read about the Bering Yachts suit Author’s Notes: 1) The author of this article (namely, yours truly) was an active consultant in the acquisition of the assets of Tartan/Legacy Yachts by Seattle Northwest Yachts LLC in 2020, and later oversaw the completion and delivery of nineteen new yachts that, at the time of that acquisition, sat in various stages of in-completion, as Tartan/Legacy Yachts circled the drain. 2) Nothing in this article is presented as legal advice, but rather is purely the expression of personal opinion based on more than 40 years experience in the recreational marine industry. Anyone placing a substantial deposit or other payment with a boat dealer or manufacturer for building a boat to order, with a future delivery date, is advised to first review the potential issues and suggested remedies delineated here with a lawyer who has the necessary and appropriate experience. — PLF Copyright © 2025 by Phil Friedman and Port Royal Group — All Rights Reserved Thanks for reading For Yacht Builders, Buyers, and Owners. FYBBO is a reader-supported publication. To receive new posts delivered directly to your email inbox, subscribe free or for the full experience, consider becoming a paid subscriber. Thanks for reading For Yacht Builders, Buyers, and Owners! This post is public so feel free to share it.
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