Catalina Yachts Owner Evicted from Factory

California Seller Demands $1 Million Payment for Company Assets

This is a photo of the eviction notice taped to the Catalina factory door and later entered into evidence in a lawsuit in which Micheal Reardon (inset) was named as defendant.

A Florida court last week evicted the new owner of Catalina Yachts from its manufacturing plant in Largo.

Documents filed in that lawsuit allege that Michael Alexander Reardon, who bought up Catalina’s assets in May, had begun reneging on his purchase agreement almost immediately thereafter.

(For the purposes of clarity, the boatbuilder in question will be referred to as Florida Catalina, while the former owner of the company, Catalina Yachts, will be called California Catalina.)

Florida Catalina had been leasing the Largo plant from California Catalina. Florida Catalina stopped making monthly rent after the first payment. By falling behind on rent, Reardon defaulted on an “asset purchase agreement” with California Catalina, causing the $1 million deferred purchase price to come due immediately.

Reardon has not responded to the suit, so the Pinellas County court clerk ruled in favor of California Catalina by default and ordered Florida Catalina evicted from the leased factory (although there was no indication that Reardon himself had a physical presence there). According to the lawsuit, Reardon owed $113,000 in back rent.

The court is still weighing California Catalina’s other big claim, which was to be awarded the $1 million owed, plus interest, attorney fees and monetary damages.

The lawsuit was filed on September 18. By then, Florida Catalina employees were no longer getting paychecks, but were not laid off either, which would have allowed them to collect unemployment, according to statements attributed to workers on social media.

Last week, Florida Catalina President Patrick Turner announced the Largo factory was shutting down “temporarily.”

In late August, while his Florida workforce was getting late paychecks, Reardon acquired Tartan Yachts, Freedom Yachts and AMP Spars in a deal that was described as “a dollar down” and a portion of the proceeds from future sales.

According to someone familiar with goings-on at the Tartan factory in Painesville, Ohio, the workforce was immediately furloughed, but is reportedly back on the job now.

Earlier in August, prior to these acquisitions, Reardon had raised $124,000 by selling accounts receivable debt at a discount to a pair of New York “factoring houses.” Now, they too are suing him for non-payment. Factoring is a financial transaction that allows a business to raise quick cash based on the amount of its unpaid business invoices. The factoring house is paid back as money for those invoice payments come in.

When Catalina and its sister brand True North were purchased, the vestiges of the boating press went into full adoration mode regarding Reardon’s boatbuilding experience. As CEO of Daedalus Composites, which had set out to build whizzy carbon fiber catamarans in Edenton, North Carolina, Reardon was portrayed as a savior.

Investor Balked at Saving Catalina, Company President Told Workers (Video)

“While Catalina and True North have always built boats that are conservative, classic and practical, boats that get American families out on the water, Daedalus is a high-tech disrupter that creates all-carbon energy-efficient catamarans for mega millionaires,” sailing writer George Day said.

No one mentioned that Daedulus apparently hadn’t sold a boat yet. Now, it seems unlikely that it will, unless you count the one that’s half built in the for-sale photos for the factory building. The 38,400-square-foot building is listed for $3.5 million.

One of the real estate listings for the Daedalus factory shows this enormous unfinished catamaran.

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