Cayman watersports company Captain Marvin’s is being sued by a firm that attempted to buy the business for US$4 million in 2008.
Esperada Holdings has filed a writ claiming that Captain Marvin’s kept US$1.6 million of its money, handed over as part payment for the business, after the sale collapsed.
The company claims, in paperwork filed with the Grand Court last month, that the cash was not intended as a deposit or a gift and should have been returned when the deal was called off. Ronnie Anglin, director of Captain Marvin’s, this week declined to comment, citing the fact that a court case is pending. The company will have the opportunity to present an alternative version of events when the case goes to trial.
The dispute stems from a September 2008 agreement for the purchase of the water sports business, which takes tourists to Stingray City and runs fishing charters.
Esperada Holdings claims it paid an initial deposit of US$400,000, with the balance of US$3.6 million due to be paid on completion of the sale.
The company made further payments of $700,000, $500,000 and US$400,000 during October and November 2008 as the planned completion date was pushed back, with the agreement of both parties.
In the writ, the company claims there was a clear understanding between the companies that the payments were intended to go toward the purchase price and would be returned if the deal fell through.
Captain Marvin’s terminated the sale in October 2009 after Esperada Holdings failed to complete the agreement by a final deadline of September of that year, the writ states.
A formal demand for return of the “part payments” was ignored by the watersports company, according to the paperwork filed by Solomon Harris law firm on behalf of Esperada.
“It was at all material times understood and intended by the plaintiff and by the defendant that the part payments were not intended to be applied by the defendant for its own benefit, save in the event that completion was achieved.
“Further it was not understood or intended by either the plaintiff or the defendant that the part payments constituted a gift to the defendant, nor could such an understanding be construed. The part payments consequently remained the property of the plaintiff and were held on trust by the defendant until completion was achieved.”
The company is seeking repayment of US $1.6 million as well as damages for breach of trust. The court filing also claims Captain Marvin’s was “unjustly enriched” at the expense of the prospective buyer and asks that the defendant account for “any and all profits derived from the part payments”.