A federal jury has ordered Genmar Holdings Inc. to pay $2.6 million in damages, plus attorney fees and litigation costs, for breaching a purchase agreement and employment contracts with marine industry veteran Geoffrey Pepper and his family.

The verdict follows a two-and-a-half week trial earlier this month in U.S. District Court in Kansas, City, Kan. Pepper, along with his daughter and son-in-law Cassandra and John O’Tool, filed the suit in April 2001.

“This is a huge victory for Mr. Pepper and his family,” said lead trial attorney George A. Hanson of Stueve Siegel Hanson Woody LLP. “The jury sent a strong message to Genmar that its business conduct was unacceptable.”

“We totally disagree with [the verdict],” Genmar chairman Irwin Jacobs said in a telephone interview. “This was not a breach in any way, shape or form.”

Jacobs says an appeal is being drawn up.

“That would simply delay the inevitable and increase the amount of money they would owe Mr. Pepper,” Hanson says.

Pepper sold his start-up aluminum boatbuilding company, Horizon Marine in Junction City, Kan., to Minneapolis-based Genmar in December 1998. Under the purchase agreement, Hanson says Genmar paid $2.3 million in cash for Horizon and promised an opportunity for more consideration in an earn-out over five years. He says Pepper and the O’Tools also entered into multi-year employment contracts to remain in management positions with the post-acquisition company.

However, Hanson says, Genmar terminated Pepper and his family within 15 months, made no earn-out payments and discontinued the Horizon brand of boats (later re-named Nova) a year later. In spring 2002, following Genmar’s acquisition of Lowe out of the Outboard Marine Corp. bankruptcy, Genmar shut down the Junction City manufacturing facility and terminated all of its 119 employees.

Citing economic conditions and an under-performing facility, Genmar argued in court that closing the Junction City operation was a business necessity. Genmar witnesses included Jacobs, himself; president and CEO Grant Oppegaard; executive vice president and chief financial officer Roger Cloutier; senior vice president and aluminum group president David Vigdal; and Ranger Boats president Randy Hopper.

“This verdict is particularly rewarding in light of the arrogant and cavalier attitude expressed by Genmar and its executives throughout this litigation,” Hanson said.

“You would have to be arrogant and cavalier to make such a statement,” Jacobs said in response. “It’s preposterous when you know all of the circumstances.”

Pepper had also accused Genmar in the lawsuit of fraudulently inducing him to sell his company, and of engaging in discrimination and retaliation. The jury ruled in Genmar’s favor on those charges.