Yachts

The three boats that once belonged to Bernie Madoff generated more than a million dollars for victims of his $65 billion Ponzi scheme on Tuesday. Seventy bidders registered with National Liquidators to chase after the boats, along with a Mercedes and another yacht owned by Madoff's CFO, Frak DiPascali.

"Bull," which was Madoff's 55-foot yacht, sold for $700,000, with the 38-foot "Sitting Bull" following at $320,000 and the 24-foot "Little Bull" fetching a mere $21,000. His 1999 Mercedes Benz CLK 320 convertible was good for $30,000, despite the fact that it has only 12,827 miles on it. The top seller was DiPasclai's 61-foot 2003 Viking sport fishing yacht, which sold for $950,000 at the auction.

The sales were helped along by the fact that Madoff took excellent care of his yachts. Bob Toney, president of National Liquidators, told Bloomberg News, "Mr. Madoff has taken better care of his yachts than anyone else I know," continuing, "they were crew-maintained all the time."

The latest "Bull" from Bernie Madoff is about to be unloaded. His yacht, which bears that name, will join two others under the gavel, and the action before the sale is already impressive. So far, 29 people have thrown down the $100,000 deposit needed to gain a ticket to the party, and the U.S. Marshals Service expects more registrations to come.

There's a theme in the both names. His largest yacht, a 55-foot 1969 Rybovitch sportfisher is called "Bull," and the other two, a 38-footer and a 24-footer, are named "Sitting Bull" and "Little Bull," respectively. Also, Frank DiPascali's 61-foot Viking fishing yacht will be auctioned off on Tuesday. DiPascali was Madoff's CFO.

Non-maritime lots to wind up on the block include a 1999 Mercedes-Benz CLK 320 convertible, with only 12,800 miles on it.

The auction has not been given a presale estimate, figuring that the Madoff name can push prices higher. This is exactly what happened over the weekend, when an auction of the felon's personal effects brought in north of $1 million.

Says Jennifer Crane of the asset forfeiture division of the U.S. Marshals Service, "You can't really put a price on this."

When a book is called Outrageous Yachts it has a lot to live up to. The latest publication from Vendome Press celebrates some of the world's most lavishly decadent floating palaces. The book features luxury yachts that are special for one reason or another, for beauty, speed, technological advancement and more. The book includes the classically extravagant Christina O which was owned by Aristotle Onassis as well as more modern beauties like the Maltese Falcon and the 118 WallyPower. The book profiles 21 yachts in detail with gorgeous color photographs of the exterior and interior of each yacht both close up and from a distance. Outrageous Yachts provides information about the yachts' builders and designers. The book's stunning shots of teak decks and graceful bows slicing through the water bring the world of yachting up close. We are giving away one copy of this book to a reader chosen at random.

Some other important details:

* To enter, leave a confirmed comment below.
* The comment must be left and confirmed before November 13, 2009 at 5:00PM Eastern Time.
* You may only enter once.
* One winner will be selected in a random drawing.
* One winner will receive a copy of Outrageous Yachts valued at $50.
* Open to legal residents of the 50 United States and the District of Columbia.

See complete contest rules here.

This contest is now closed. Thank you for your participation.

National Liquidators has announced an auction date for three vessels previously owned by Bernard Madoff. On Tuesday, November 17, 2009 at 4:00 pm at National Liquidators` headquarters in Fort Lauderdale, three Madoff yachts will be up for sale. The sale includes The Bull, a 55 foot 1969 Rybovich, Sitting Bull, a 38-foot 2003 Shelter Island Runabout and Little Bull, a 23-foot 2000 Maverick Boat Company 2400 Center Console. A 2003 61 foot Viking convertible previously owned by a former Madoff associate will also be a part of the auction. Matt Amata, vice president of National Liquidators, said that he has already heard from several potential bidders. In order to buy bidders are required to pre-register for the live auction. No lookie-loos allowed, attendance at the auction will be restricted to pre-registered bidders and invited guests.

Looks like controversial North Korean dictator Kim Jong Il won't be getting his hands on a pair of Italian yachts. Italy's Libero-News is reporting that two luxury yachts worth about 13 million were impounded by Italian police in Viareggio. The yachts were headed to China but were confiscated in a sting operation with the appropriate name of Operation Flybridge. An Austrian businessman had paid cash to build the yachts and then the title was transferred to a Chinese company. The police were able to trace the bank accounts to Kim.

Luxury goods have been prohibited from being imported into North Korea since 2006 but that hasn't stopped Kim Jong-Il from getting his hands on various items through similar circuitous methods. The yachts in question will be put up for auction and the money that has been paid for them has been frozen.

More bad news for Hatteras Yachts. I wrote about the company's worker layoffs earlier this year. Now the North Carolina boat builder announced an extended six-week furlough over the summer. The company once employed 1,400 workers and now employs around 300 and Bill Naumann, Hatteras Yachts chairman, told the New Bern Sun Journal that for around 90 of those employees it will be"an indefinite furlough." Naumann who came out of retirement last fall to steer the company again, says this is the worst thing he's seen from an economic standpoint. Boat sales have continued to fall and Genmar, the industry's second largest U.S. manufacturer, declared bankruptcy on Monday. Hatteras, which makes sport fishing and motor yachts between 50 and 100 feet long has been in business since 1959.

Italian yachtmaker Ferretti may lighten its load by selling off some of the less expensive brands it owns. Of course less by Ferretti standards is still quite expensive. Bloomberg reveals that one of the brands Ferretti may unload is Apreamare, a unit which makes gorgeously classic fishing boats. The boats are modest compared to Ferretti's standard megayachts and sell for as little as 500,000 euros.

The logic for selling brands with a lower price point is that the ultra-rich are less likely to cancel their yachts. Apreamare is valued at around 60 million euros and Apreamare Chairman Cataldo Aprea is said to be behind an investor group looking to by back his family brand. The group is one of several looking at buying the 160- year-old Apreamare brand. Apreamare may be sold in a package deal with the Itama brand.

Ferretti flirted with bankruptcy earlier this year but a group of 100 creditors led by Royal Bank of Scotland Group Plc converted their debt to equity to avert bankruptcy for Ferretti and restructured 1.2 billion euros of debt. Ferretti is expected to begin paying interest on that debt next month and a few sales could make that burden a little easier to take.

Check eBay next week for an online auction. The 19 leading luxury tourism companies in New Zealand (New Zealand Luxury) are coming together to offer an amazing travel deal for the starting bid of only NZ$1 (only 50 cents in the United States). Each participant is estimated to have donated NZ$1,500 (US$855) worth of travel goods and services for this effort – for a total value of NZ$33,000 (almost US$19,000).

So, what does the winning bid get you?

Come out the other side of this 10-day auction a winner, and you'll fly on a private jet to New Zealand, stay in private villas and upscale hotels for four weeks and dash around the country on helicopters and in chauffeur-driven cars. You'll even get to hit the water on a private yacht.

The largesse from the top bid will go to the Untouched World Charitable Trust, the non-profit arm of the Untouched World clothing brand – which is kicking in NZ$2,000 (more than US$1,000) in apparel for this auction.

Save the planet, and treat yourself as you demand to be treated!

In Florida, yacht abandonment and repossessions are on the rise but wealthy boat owners may soon get a bit of tax relief. The Miami Herald reports that state legislators are considering a tax break on boats and planes. A bill currently moving through the Florida legislature called the Aviation and Maritime Full Employment Act would cap the sales tax on boats and planes at $25,000.

It is hoped that the bill would stimulate the economy by creating jobs. Currently many rich people avoid the sales tax by buying their expensive planes and yachts elsewhere and storing them in other states or registering them in the Cayman Islands and other places. These actions cost the state not just tax revenue but it makes it less likely that the owner will buy other related services in Florida. The Herald quotes Republican Representative Tom Grady who says: "Someone might want to beat up the rich. I don't. Anybody with capital to invest in the state of Florida, where jobs can be created, I want them here. I want their money here."

Others are saying the tax break is outrageous especially at a time when the state is contemplating raising the price of licenses and other fees that would affect a broader swath of the population. The cap could cost the the state $8.1 million annually and local government could lose $1.1 million. No number for the potential economic gain from the new bill has been forecast.

The old saying goes that a boat is a hole in the ocean into which one pours money. The cost of repair, upkeep, mooring and storage can strain even the biggest budgets. The NY Times reports that a lot of people are getting sick of the expense of maintaining their boats and that many are being abandoned. In this market it can be difficult, if not impossible to sell a boat so instead desperate owners will remove the identifying information and then leave the boat in a harbor or beach them at low tide.

According to the article, officials in coastal states are worried that the continuing economic pressure will only aggravate this problem. Abandoned boats are a risk for other boats navigating the waters and can be an environmental hazard, leaking fuel and other toxins into the water.

As you might imagine, Florida is one of the places that is hardest hit. The state which boasts ample boating opportunities on its many inland waterways and long coastlines, is one of the states that has seen the most foreclosed homes. Boat repossessions have spiked in the state as people default on their payments. Last summer's spike in gas prices began a trend in people using their boats less and less and then the deepening of the economic crisis further damaged the pleasure boating industry.

Yachts are just the latest things to be abandoned. The process of turning in the keys to a home that can no longer be afforded is already so common it has its own nickname, jingle mail. What's next? Will another gas price increase lead to SUVs being left to gather dust in parking lots?

[Thanks, Caolon!]

It was no April Fool's joke for Bernie Madoff. On Wednesday Bernard Madoff's 55-foot yacht "Bull" which is docked at a marina in Fort Lauderdale, Florida, was boarded and confiscated by U.S. marshalls. Madoff is currently in jail pending sentencing in June for running his multi-billion dollar Ponzi scheme.

The yacht, a 1969 Rybovich, is valued at around $2 million and was towed while surrounded by federal law enforcement. The yacht is the medium-sized "Bull," Madoff also owns a $7 million yacht with the same name currently located in the South of France. A second boat, the "Little Bull," a 24-foot Pathfinder was also seized.

The yachts were taken to the National Liquidators salvage yard, which is under contract with the federal government. Federal investigators also swooped in on the $9 million Palm Beach mansion owned by Madoff's wife Ruth to inventory the property and change the locks.

Yacht makers continue to feel the economic pinch. Today it was announced that luxury yacht firm, Princess Yachts will be cutting up to 450 jobs. The cuts represent almost a fifth of the workforce. The reason for the job loss is the economic climate and the company has said it is working with union and staff representatives to minimize the damage through reduced working hours and other adjustments. The company, which is based in Plymouth, England, was acquired last summer by an investment arm of LVMH, the luxury goods conglomerate. It was bought for an estimated sum of £200 million. A quote from an article by Robert Frank on LVMH's purchase of Royal van Lent shipyard last fall seems particularly prescient. Frank quoted Steve Schwarzman of the private-equity firm, Blackstone Group on the yacht business. Schwarzman said: "The trouble with yachts, is that when business is good, it's really good. But when it falls, it really crashes."

Luxury boat builder Tiara Yachts in Holland, Michigan becomes the latest yacht builder to lay off workers. The company, which makes sport fishing boats, eliminated 300 jobs last year. Now it is planning to lay off 300 of its 400 employees for at least a month. The month off will hopefully allow sales to catch up with production. The company had expanded rapidly over the past few years. In 2005, it invested $14 million in a massive facility expansion and at one point employed close to 800 workers. Tiara Yachts hopes to be able to call back the laid off workers once demand for their powerboats improves.

I touched last month on the problems facing Ferretti SpA, the Italian maker of luxury yachts, and since then things have only gotten worse. Bloomberg is reporting that the yacht company missed an interest payment on 1.08 billion euros ($1.4 billion) of senior loans from the Royal Bank of Scotland used to finance its buyout in 2007. At the end of last month Ferretti did not make a 1.4 million euro payment. Ferretti has released a statement saying that the payment is related to an interest-rate swap on the senior loan and that it only failed to pay interest on the debt's 200 million- euro lesser "mezzanine" loans.

Ferretti, which also owns Pershing, Riva and CRN creates some of the most luxurious and expensive yachts and mega-yachts in the world. Like many luxury brands it is facing diminished sales. Currently London-based Candover owns 50.2 percent of the company as a result of the LBO, while Ferretti's management holds 39.1 percent and Permira Advisers LLP, another London-based private equity firm, has 10.7 percent. The yachtmaker's senior loans traded at 22 percent of face value at the end of last week and the Financial Times has said that Ferretti has stopped production at Pershing sending 270 workers home for 15 days from the production site in Fano. It's a startling turn around for Ferretti which was planning its new public offering on the stock exchange just a few months ago. Orders for the larger boats Ferretti makes continue to come in but the fall-off in orders for the mid-range yachts has been swift.

Another fractional yacht ownership company, Synchrony Yachts has launched. Synchrony's first yacht is a 120-foot Benetti Classic 120 which sleeps 10 in five staterooms with room for six or seven crew members. The yacht has exterior styling by Italian designer Stefano Righini and an interior designed by the French architect Francois Zuretti and offers a large main saloon, formal bar, an upper deck with a saloon area, outside deck area for alfresco dining and a sun deck with Jacuzzi and bar. The yacht comes fully loaded with the requisite water toys including a jet ski and a pair of wave runners as well as a well-trained crew.

Synchrony offers six week shares which start at $4.8 million. Each owner receives a quarter share in the yacht but can also use any other yacht in the Synchrony fleet and trips can be arranged for both long and short durations. The syndicated ownership term is five years from the yacht launch date and the yacht will be put up for sale at the end of the term. The company promises that each owner is protected against credit risk, default of any other owners or even the insolvency of Synchrony (all of which could be a concern in these uncertain times).

[via Forbes Life]