Tommy’s Boats, which has 15 dealership locations across the United States, filed a lawsuit Wednesday seeking unspecified damages from Malibu Boats and CEO Jack Springer in U.S. District Court for the Eastern District of Tennessee, Northern Division.

According to court documents, the suit alleges that Malibu Boats and Springer, who in February announced his pending departure on or before May 17, 2024, “engaged in an elaborate scheme to overmanufacture and pump nearly $100 million of its highest priced, highest margin, slow moving inventory into fifteen (15) Tommy’s dealerships (collectively, “Tommy’s”) in order to artificially inflate Malibu’s sales performance, artificially claim increased market share in the industry, and artificially inflate its stock value during an obvious downturn in the recreational powerboat industry.”

According to the suit, beginning in late 2022, Malibu began suggesting that Tommy’s, which accounts for 33% of Malibu’s powerboat sales, increase its floorplan credit line from $50 million to $160 million to make room for 25 weeks of inventory at the turn of the next model year. Tommy’s alleges that, with 2022 incentives unpaid, Malibu “dangled incentives for 2023 and 2024 and stood firm in its own alleged market analysis in causing Tommy’s to increase its floorplan facility.”

Tommy’s, saying it relied on Malibu’s representation and promises, initially increased its floorplan from $50 million to $85 million, then to $110 million with a $20 million overlimit to satisfy what it alleges was Malibu/Springer’s goal of artificially inflating the manufacturer’s numbers.

According to the lawsuit, Malibu then began shipping an “unreasonable” amount of inventory into Tommy’s dealerships with a model mix that skewed toward the highest-priced, highest-margin, slow-moving boats in its lineup. Tommy’s alleges that Malibu then refused to pay millions of dollars in earned incentives, which forced the dealership to default on its floorplan agreement with the lender.

The filing says that Tommy’s has been a Malibu dealer for 12 years and that the company still operates under a valid dealership agreement with Malibu. According to the lawsuit, Malibu claims that it terminated its dealership agreements with all Tommy’s dealerships because of the default with M&T Bank, the floorplan lender.

Additionally, the lawsuit says, “While at the Miami Show, Matthew Borisch, principal for all Tommy’s dealerships, was pulled aside by three (3) Malibu stakeholders to discuss Tommy’s Dealership Agreements with Malibu.”

Tommy’s claims that the stakeholders disclosed to Borisch what Malibu and Springer had done to the dealership and reported that “Jack would not turn the spigot off,” despite what the market was showing. Additionally, Tommy’s says, the stakeholders told Borisch that Wayne (the former CEO) left on bad terms and that they were “nervous.” The suit also says they asked Tommy’s to “hold on,” as “Jack is not going to last.” Springer announced he would be stepping down the following week.

The lawsuit claims three counts of breach of contract, one count of quantum meruit, a count of unjust enrichment, promissory estoppel, intentional misrepresentation/fraud, and negligent misrepresentation.

The suit says, “Tommy’s is entitled to significant money damages, including direct, indirect, consequential and punitive damages because of Malibu’s breach of conduct and wrongful conduct.”

Trade Only Today reached out to Tommy’s Boats and Malibu Boats for comment but has not received responses. This is a developing story.

UPDATE: Malibu Boats has responded to the suit.