- 5 - boat. Mr. Schwartz was advised by these sailing professionals that purchasing a 50-foot boat would be a good investment. The Diane and Diane Racing On February 13, 1991, Mr. Schwartz purchased a 50-foot Nelson Marek racing sailboat (the Diane) from an unrelated third party for $350,000. At the time of purchase, the Diane had a market value of $680,000. Mr. Schwartz was able to purchase the Diane for approximately half its value because repairs were needed to the hull. Mr. Schwartz thought he could make a profit from this venture because he bought the Diane at a “bargain” price. Before purchasing the Diane, petitioners received oral financial projections from experts, including the then president of the Association, Wictor Forss. In order to purchase the Diane and the necessary sails and equipment, petitioners received a mortgage on the Diane for $485,000. Diane Racing’s attorney, Ira Stechel, advised petitioners that ownership of the Diane should be maintained individually because the insurance policy would not allow Diane Racing to have ownership and the mortgage contained an acceleration clause if ownership changed. The Diane was designed as a racing sailboat and did not include any personal amenities (e.g., toilet, kitchen, or sleeping quarters). At the time they purchased the Diane, petitioners also owned two other boats (a 25-foot Black Fin and aPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011