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chartering the Diane. At that time, petitioners still felt that
the Diane could be chartered and a profit could be realized if
they could secure a few charters annually. Unfortunately,
petitioners lost their two main charterers, Mark Morita and David
Howell, because Mr. Morita went bankrupt and Mr. Howell died.3
Change in International Racing Rules
Beginning around the years in issue, the international
racing rules changed. In sailboat racing, certain rules exist in
order to determine a sailboat’s handicap for racing purposes.
The Diane had been built under the International Offshore Rule
(IOR). The IOR had been the international rule since the late
1960s and early 1970s and through the year petitioners purchased
the Diane. The IOR allowed yachts of different sizes to compete
fairly. The IOR was replaced by the International Measurement
System (IMS) and the Performance Handicap Racing Fleet (PHRF)
system by 1993 or 1994.4 In order to increase the marketability
of the Diane, petitioners modified the Diane so it could race
under IMS and PHRF by removing the IOR speed bumps, changing the
shape of the keel, and moving the weight around. Before its
modification, the Diane was one of the three fastest boats on the
3 In 1992, Mr. Morita chartered the Diane and then filed
for bankruptcy. Petitioners chartered the Diane to David Howell
from 1993 to 1995. Mr. Howell promised to charter the Diane as
long as he could, but then he died.
4 The IOR is still used in Mexico; however, the last IOR
premier race occurred in 1993.
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Last modified: May 25, 2011