The lawsuits, countersuits and motions were filed in North Carolina Business Court by Reggie Fountain and Fountain Powerboats, with documents dating from March. Both sides seem determined to prove they were the one wronged in the business relationship they once shared.
In early 2010, Fountain Powerboats emerged from Chapter 11 bankruptcy protection with a new owner in Liberty Associates. As part of the reorganization plan, Fountain was kept on as president and CEO of the company.
However, according to both parties, the arrangement quickly soured, culminating with Fountain announcing his resignation in December 2010, citing key differences in philosophy with the new owners he once welcomed with open arms.
The recent court filings started with Fountain accusing Fountain Powerboats of not paying him $75,000 he says is owed to him through a consulting agreement he’d entered into with Westport Shipyard regarding the development of a proposed 50-foot boat, as well as refusing to return to him items that include hundreds of trophies, plaques, photographs and other items of memorabilia that Fountain said belonged to him.
“Basically I just want my pictures and trophies back,” Fountain told Soundings Trade Only. ”It was a simple [lawsuit] and it got more complicated.”
In May, Fountain Powerboats filed an answer to the claims and made additional counterclaims against Fountain. The company said Fountain did not have the authority to enter into an agreement with Westport Shipyard for payment directly to himself and denied it owed him $75,000. Also, the company said, the property Fountain referred to in his filings is not owned by him, but by the company. Fountain Powerboats said it will relinquish the property if Reggie Fountain can produce evidence of ownership.
“We did give Mr. Fountain the benefit of the doubt on a lot of stuff, but there were things that were clearly team efforts paid for by the company that should remain with the company,” Liberty Associates CEO Bill Gates said.
In addition, Fountain Powerboats alleged in its counterclaim that Fountain took steps to launch a competing company before he resigned; he copied computer files; his son took a server hard drive from the premises and copied it; he took boat designs, sales and marketing information, customer lists and vendor information from the company and has used Fountain Powerboat designs and trade secrets in his new company, RF Powerboats.
Fountain denied the majority of these counterclaims in a nearly 100-page reply laced with the colorful language he is known for within the industry. He also asserted that he was CEO in name only and not given the authority to do his job. Also, he said, RF Powerboats has no tooling, has not built a single boat and is not trying to take customers away from Fountain Powerboats.
RF Powerboats, he said, has started off as a service and “customization” company, not a boatbuilder. Although there are people that would like boats from RF right now, Fountain said he’s not in a financial position to create the necessary tooling.
There are no trade secrets residing in Fountain Powerboat computers, Fountain said. The company holds no patents. Fountain said he didn’t need to take any computer files or designs because all of the information about how to build the boats was in his head.
“I invented all that stuff,” he said. “We were an open book. …There were no secrets. It’s what I know in my head from 50-plus years of experience.”
“There is nothing ‘secret’ or ‘proprietary’ about applied knowledge, testing, prior art, experience and marketing terminology,” he wrote in court documents, comparing his talents in boatbuilding with those of LeBron James in basketball or Michael Phelps in swimming.
“Both worked tirelessly for thousands of hours to sharpen their talents, and they displayed outstanding discipline to help achieve their goals. Along the way many coaches helped them with prior and proven methods of training and technique,” court documents state. “But none of these coaches or employers acquired any rights to trade secrets or proprietary interests in the God-given talents of either athlete.”
Fountain’s response to the counterclaim also includes numerous allegations of financial issues involving Liberty, Gates and others in the company.
Gates told Soundings Trade Only it is “untrue” that his company is at risk financially and accused Fountain of maliciously including information about past court cases and financial dealings that have nothing to do with the issues at hand. Fountain Powerboats, he said, plans to file motions to strike those exhibits, as well as other “miscellaneous information,” from the record.
Fountain Powerboats, he said, is up and running and successful – with more than 170 employees working there this spring and summer. “Are we building boats? Yes. Are we seeing sales far above what we had when [Fountain] was there? The answer is yes.
“Liberty did everything we said we were going to do and more,” he added. “Mr. Fountain and the management of the company – that’s where the shortfall was.”
For his part, Fountain said he wants the new owners of Fountain Powerboats to “get what they deserve.”
“I want to see justice done,” he said.