Bankruptcy of Kentuckiana Yacht Sales and Jefferson Yachts Leads to Dispute Over Defective Yacht

Kentuckiana Yacht Sales and Jefferson Yachts Filed For Chapter 7 Bankruptcy in January

Kentuckiana Yacht Sales and Jefferson Yachts filed for Chapter 7 bankruptcy in January. One of their largest creditors is Johnston Family LLC.

Johnston told Pullem that he wanted to purchase a yacht to island-hop in the Caribbean and elsewhere. Pullem suggested an 82′ Jefferson Starship Pilothouse yacht in inventory that had an enclosed sky lounge.

New Boat Sales

Established in 1960, Kentuckiana Yacht Sales caters services such as repairing boats and providing watercraft inventory. It offers a wide range of products, including Jefferson starship, Monticello river yachts and Regal yachts. Its services also include adjusting stabilizers and installing new propellers. Its customer base includes charter boat companies and private owners. It is the distributor for Chung Hwa and Her Shine marine brands in the United States.

Pullem told Johnston that the 82-foot Jefferson Starship Pilothouse yacht in KYS’ inventory was well suited to island-hopping because it had an enclosed sky lounge. In a statement submitted to the court, Pullem said that he discussed Johnston’s planned voyages with him and suggested the particular yacht.

The defendants contend that the purchase order and Jefferson limited warranty clearly disclaim an implied warranty of fitness for a particular purpose. However, the terms in these documents are not conspicuously identified and do not address the issue in this case.

Used Boat Sales

Kentuckiana Yacht Sales (“KYS”) and Jefferson Yachts (“Jefferson”) offer Cobalt boats, Barletta pontoons and Sea-Doo personal watercraft. They have a full service department for repair and maintenance and a parts department that can supply any part or accessory that you may need. They also offer financing through Wells Fargo and a rental program for customers who wish to try out their new boat before they buy it.

On September 22 and 23, 2006, Kentucky and northern Indiana were ravaged by torrential rains and flash flooding. In Louisville, over 10 inches of rain fell in a short period. This caused serious flooding problems. In some areas, homes were swept away, and six people died. In Buechel, the Bent Creek Apartments were completely submerged. Residents had to be evacuated and moved to higher ground. The flood was so severe that it left debris all over the city. It was the most widespread flood since 1997 and caused a large number of injuries.

Boat Repair

The company offers boat repair services. It also provides marine parts, supplies and accessories. Its boat maintenance services include engine repairs, water pump replacement, battery charging, hull cleaning and washing, oil changes, and electrical problems. The company also offers boat storage and boat trailer repair. Its customers include recreational and commercial boaters.

Attempts to reach the companies’ owner, Leon Shaw, were unsuccessful. Lohmeyer said the bankruptcy filing did not stem from any particular event. He said the recession prompted people to cut back on luxury items like yachts.

According to the Chapter 7 filing, Jefferson Yachts and KYS had assets of $239,000 and liabilities of $2.3 million. The company is owned by Leon Shaw, Jeffery Nash, David Shaw and J. Scott Pullem. The Jefferson warranty says the manufacturer “invite[s] and encourages each purchaser to inspect and to request any expert assistance that [the purchaser] deems necessary prior to delivery of this vessel.” The company does not dispute that it made such a warranty.

Boat Storage

Keeping a boat off-site can save on maintenance costs and free up space at home. It also allows owners to enjoy their boats more if they are not a constant source of contention among family members. It is important to choose a storage facility that offers climate control and security features. In addition, it is helpful to remove batteries and label boxes and bins when storing items like trolling motors.

According to the Chapter 7 filing, Leon Shaw and Jefferson Yacht Sales owed more than $1 million to their creditors. One of their largest creditors was Johnston Family LLC, which Lawrence Johnston, former head of General Electric’s consumer appliances division, formed for the purpose of buying the yacht. The yacht was reportedly delivered in November 2006 with defects that made it unsuitable for ocean travel, including serious stability problems. The Jefferson limited warranty, however, informed Johnston that he should personally inspect the yacht and seek expert assistance as needed.

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