The boat manufacturing company headed by corporate raider Irwin Jacobs ran into choppy waters last month in a Kansas City, Kan., courtroom when it got hit with a $2.6 million verdict.

A federal jury awarded the damages to Horizon Marine LLC after finding that Minneapolis-based Genmar Holdings Inc., the world's biggest maker of recreational boats, breached purchase and employment agreements with the small Junction City, Kan., company.

Genmar bought the aluminum-boat maker in December 1998 for $2.3 million in cash and promises of additional consideration linked to Horizon Marine's profits. It also entered into multiyear employment contracts with Horizon Marine's principals, Geoffrey Pepper, his daughter and his son-in-law.

Fifteen months after the acquisition, Genmar axed the three. About two years after that, following Genmar's acquisition of another boat maker, it shut down Horizon Marine's plant in Junction City and let go of its 119 employees.

Horizon Marine sued, and late last month a seven-person jury awarded it $2.5 million on its breach-of-purchase claim and $80,000 to two of the principals on their breach-of-employment-contract claims.

"There was evidence that Genmar viewed Horizon Marine as a significant competitor and that they were motivated to take that competitor out of the market in its infancy," said Horizon Marine's lawyer, George Hanson of Stueve Siegel Hanson Woody.

That's not the way Genmar, which has filed motions to set aside the verdict, saw it.

"We believe the evidence showed that Mr. Pepper had failed miserably in operating the boat company," said Genmar's attorney, Tim McNamara of Lathrop & Gage. "The notion that Genmar breached the purchase agreement is simply false. And because of the miserable performance of the boat company, we believe Mr. Pepper was not entitled to any money under the agreement."

The jury awarded Horizon Marine just half the $5 million it sought under its breach-of-purchase-agreement claim. And it rejected most of the other claims asserted by the company and its principals for fraud, discrimination and retaliation. The plaintiffs had sought a total of $10 million.

Genmar Chairman Jacobs, once known as "Irv the Liquidator" for his hostile takeover attempts during the junk-bond era of the early 1980s, testified briefly at the trial, as did several other top Genmar executives.

Genmar's 2002 model year sales totaled $1 billion, according to the company's Web site. Its brand names include Aquasport, Carver, Crestliner, Lund and Wellcraft.