A motion to stay has been granted in the $12-million lawsuit filed in 2011 by the owners of the megayacht Cakewalk against Derecktor Shipyards Connecticut, in anticipation of the dispute being settled out of court.
In layman’s terms, a motion to stay is a stoppage of a legal case or even specific proceedings in a case. It is a short-term delay that allows one party or both parties to work out any number of things, such as a due payment, or even an agreement. In the Cakewalk case, the motion to stay was filed jointly in late December by the megayacht’s owners and the representatives for Derecktor Connecticut. “The parties here are currently engaged in formal settlement discussions, and they are hopeful that those negotiations will be successful,” the court filing states. “Absent a stay, however, the Court and the parties will expend a great deal of resources litigating matters that would become moot if a settlement is reached. Thus, a stay would be appropriate to both conserve the Court’s and the parties’ resources and to promote the prompt resolution of this case.”
Specifically, Cakewalk V Ltd., which is the plaintiff, and Derecktor Shipyards Connecticut, the defendant, requested a delay of 120 days. Both parties also have the right to request that the stay be lifted earlier if they conclude that the settlement discussions are no longer productive.
If a settlement is reached, it would represent the end of a protracted battle. Derecktor Connecticut signed the contract to build the 281-foot Cakewalk in 2006. During construction, it experienced financial difficulties related to a dispute over Project Gemini, a catamaran also in build, and filed for Chapter 11 bankruptcy protection. (That catamaran was later sent to Pendennis for completion and is now known as Hemisphere.) Court documents related to the current lawsuit reveal that the owners of Cakewalk loaned funds to Derecktor Connecticut to help resolve the financial difficulties and continue building Cakewalk. The same records reveal that both parties agreed that Derecktor Connecticut would provide various financial statements, such as profit and loss statements, to Cakewalk V Ltd. after emerging from bankruptcy, and that repayment of the loan would also be due. Derecktor Connecticut did reorganize its business structure and settle the Project Gemini dispute sufficiently by August 2011 to emerge from bankruptcy. However, it did not supply the required financial documentation under the agreement with Cakewalk V Ltd., nor did it repay the loan. That same month, Cakewalk V Ltd. filed a breach of contract lawsuit for $12 million.
Derecktor Connecticut filed for Chapter 11 bankruptcy protection once again in January 2012, citing the recession and a cash drain stemming from infrastructure improvements. It remains under that protection. It is no longer affiliated with the Florida shipyard operating under the Derecktor name.
Leave a Reply