- 4 - The PEDRO was a 47-foot twin diesel motor yacht, the hull of which was made of carbon steel. The exterior of the hull was zinc chromate bonded for corrosion resistance purposes, but the interior of the hull was not so bonded. The outfitting of the PEDRO was completed in July or August of 1988. In December, 1987, before the outfitting was completed, Northrop and Johnson, petitioners' marketing representative, had suggested an asking price of $520,000 for the boat. In September, 1988, Durham Trust Bank issued a mortgage on the completed boat in the amount of $321,000, which was approximately the amount petitioners were required to pay Pedro-Holland, having been given one year "free financing" from the delivery date in July, 1987. Shortly thereafter, petitioners and Northrop and Johnson agreed to advertise the boat for sale at a price of $465,000. In November, 1988, petitioners decided that, due to their heavy carrying charges and to obtain a quick sale, they would reduce the asking price to $396,000, which petitioners figured was just below their "total base cost" of $402,000. On February 7, 1989, a valve exploded on the boat, creating a two-inch hole five feet below the water line. Since the boat weighed 40 tons, the explosion created a "geyser" inside the hull. With the prompt intervention of the U.S. Coast Guard, the boat was kept from totally sinking, but took three feet of waterPage: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011