Law360, Wilmington (July 3, 2018, 5:30 PM EDT) – A minority investor in tugboat and barge service provider Harley Marine Services Inc. filed suit Tuesday in Delaware Chancery Court seeking to oust the company’s CEO after an audit allegedly revealed he embezzled millions of dollars in funds and assets to satisfy personal expenses.
Anyone at Harley have any insight to this?
Add 08 July 2018:
Apparently the suit has been dropped.
That’s certainly interesting.
I often wondered what the story with this guy Franco was…where did he come from and more importantly where did he get his money?
I don’t know anything about the lawsuit, but its apparently over. It would have been interesting.
Harley advertises for crew all the time. We see the ads. They must get thousands of applications.They have a computerized application system that apparently rules most applicants out. Guys tell me they never hear anything back on their applications. I cannot think of any other tug company that does that much advertising.
The sea story I heard was that Harley was an insurance defense lawyer, that’s why there is all that paperwork.
Harley is growing and building a lot of new boats when other good established companies are hurting. It must be doing something very right. Someone told me that excellent pollution liability coverage is a big factor.
Most of the Harley boats I see look nice and new, but I’ve seen the legacy boats too.
I did not hear good things from guys that worked on the first ATBs. I occasionally run into current or former Harley mariners. Some like it; some didn’t. No recent mention of ATBs. Most current of former mariners at any company have things to complain about. Don’t we all? That said, I’m not rushing to fill out the computer applications for all those advertised jobs.
Macquarie Marine Services Dealt Second Blow in Efforts to Pressure Harley Franco to Cede Control of Harley Marine Services
Washington Court invalidates MMS’ actions to remove CEO | MMS earlier withdrew lawsuit
SEATTLE – Today, a Seattle court handed Macquarie Marine Services (MMS), a minority investor in Washington-based Harley Marine Services (HMS), a second setback in its efforts to wrestle control of HMS from its founder, Harley Franco.
Earlier this week, the Australian-based MMS filed a lawsuit claiming a litany of financial improprieties, each of which were soundly refuted in court pleadings, said HMS attorney Robert Sulkin.
Today, the King County Superior Court in Seattle thwarted a second effort by MMS to depose CEO Franco through what Sulkin characterized as a flawed effort by Macquarie to stage a coup through unilateral board action. The Court issued a Temporary Restraining Order finding the purported board actions to be without legal effect, and holding that until further orders, Mr. Franco remains CEO of the company.
According to Franco, issues began when minority owner MMS began pressuring him to sell HMS. “While I was interested in building a hundred-year company, they were only interested in making a fast buck,” Franco said. “They forcefully continued with their efforts, despite knowing that our investor agreement didn’t give them the power to force a sale.”
“They gave me an ultimatum – agree to a sale or face the consequences. I told them, again, I would not sell HMS,” he added.
Franco said that MSS then, in an obvious move to embarrass him, filed a suit in Delaware filled with half-truths and innuendo, claiming financial improprieties at HMS.
According to Sulkin, his team filed a response to the complaint that addressed each claim put forth by MMS and offered detailed explanations for each of the allegations.
“In our answer to the claim, we demonstrated that MMS was relying on half-truth and innuendo to construct a narrative to suit its ends, without regard to fairness or truth,” Sulkin said. “It comes as no surprise to us that shortly after reading our response, MMS withdrew its own complaint.”
“While I am no stranger to the hardscrabble world of business, I take personal offense to the nature of the wild, unsubstantiated allegations MMS has leveled against me, the HMS team and my family,” Franco declared. “I’ve spent my career building a company worthy of the admiration it has received, and I will fight to keep it.”
Complaint.pdf (388.2 KB)
Here is the PDF of the complaint against Harley.
It’s a quick and damning read.
Wow, There is alot there. Obviously, he will have his defense but there seems to be quite of bit fraudlent activity from expense reports to million dollar winches. Mr Franco got a little sloppy. Thanks for sharing, looking forward to see this one play out.
You and me both.
I encourage everyone to read the complaint, especially Harley employees
Intersting read. I will be following this closely.
Here comes all the guys from Harley who left vane, running back to vane
Note that this suit was withdrawn by MMS after Harley’s counsel addressed the allegations
How about the lawsuit in delaware?
That was the one that was withdrawn - filed and withdrawn by MMS. HMS also won the issue in King County
I wonder why MMS withdrew its suit.
There was probably a settlement.
How does a court in Washington drop charges that were filed in Delaware?
Two separate actions. Completely independent of one another. I saw the news release posted here that gives detail.
Mark Firmani | Firmani + Associates Inc. | Direct 206-466-2700 | C - 206-919-9357
Did HMS buy Maquaries stake? Or were Maquaries claims unsubstantiated? Are they still partners or this was Maquaries way of keeping Harley in check, ie no more family members not showing up and getting paid? I was looking forward to it.