Marina Purchase in Maryland

The purchase of any Maryland business can be a complicated process.  The purchase of a marina on the Chesapeake or the Coastal Bays, however, adds a number of issues that are specific to the marina’s position on the waterfront.  There are few other businesses where access must be considered from both the land and the water; where environmental regulations and controls are of such immediate consequence; and where a love for the water can be as much of a driving force as business considerations.  The list below is a truncated version of the checklist that we use at Waterfrontlaw to assist purchasers and sellers in organizing for a purchase or sale.

If you are considering a purchase or sale of a marina, we urge you to review the list below, formulate a plan of attack, and then to bring the transaction to our attention.  We can help with identifying the areas of risk that require additional research.  We can help with identifying poor transaction partners or troublesome real property before too many resources are expended.  And, of course, we can assist with preparing the papers that will form the core of the transaction.  In many cases, we may already have first hand knowledge of the property in question.

Due Diligence Documentation

Due Diligence CategoryDocumentation TasksellerPurchaserStatus/notes/ assigned to
Business Plan, Corporate Structure, Financing
Business planCurrent five-year business plan
Corporate organizationArticles of incorporation (name, address, resident agent)
Bylaws
Recent changes in corporate structure
Parent, subsidiaries, and affiliates
Shareholders’ agreements
Minutes from board meetings
Corporate representationPost formation representation – conflict waiver – explanation of obligations.
ShareholdersCurrent shareholders, including number of shares owned, dates that shares were acquired, considerations received, and contact information
Number of outstanding shares
Stock option plan
Samples of common and preferred stock certificates, debentures, and other outstanding securities
Warrants, options, and other rights to acquire equity securities
Relevant private placement memoranda and other offering circulars
LendersBank lines of credit, loan agreements, or guarantees
Loan defaults or expected defaults
Recent corporate transactionsDescription and rationale for each transaction
Purchase and sale agreements
Real Property and Environmental
Real PropertyDeed Search to confirm ownership or deed restrictions
Neighborhood canvas – known problems; future issues with activities
Silting in/navigability
RegulationsBusiness licenses
Environmental permits
Workers’ health and safety permits
Environmental EngineeringCite reviewed for current permits; past environmental issues.
ZoningAnalysis of present zoning/need for future changes or variances
Contractual Documents
ContractsMajor contracts by product line
Support/maintenance contracts
Warranties and guarantees
Dockage Contracts
Mooring Contracts
Land Storage ContractsNote vessel owners rights to do or contract for their own service work
Other customer-related contracts
Supplier/Subcontractor contracts
Purchase Contract Issues
Assets and liabilities v. stock purchase
Warranties
Real property v. going concern
Due diligence period
Deposit – refundable v. non-refundable
Liens and creditors
Financial and Operations
Financial statementsThree years of historical statements and related documentation.