Geoffrey Pepper started his company, Horizon Marine, in Junction City in 1997. He started with just a few employees and a year later had 70 people working for him.

In December 1998, Pepper sold the aluminum boat manufacturing business to Genmar, the world's largest builder of recreational boats, headquartered in Minneapolis, Minn. Genmar builds a number of brands of boats including Crestliner, Ranger, Glastron and Wellcraft.

"I felt it was a great opportunity," Pepper said this week in a phone interview. "I wouldn't have sold [the company] if I didn't think it was a good thing for the community. I thought it was an opportunity for additional jobs."

But it didn't turn out that way, and a lawsuit followed.

Just before Thanksgiving, after a two-week trial in Kansas City, Kan., a federal jury found Genmar had breached its purchase agreement and employment contracts with Pepper, a boating industry veteran, and his family. The jury awarded $2.6 million in damages, with attorney's fees and litigation costs also to be recovered by Pepper against Genmar.

What happened?

Under the purchase agreement, Genmar paid $2.3 million to Horizon Marine and also promised to provide Pepper an opportunity for additional earnings from the company over the next five years. If Horizon Marine met certain earnings goals, Pepper would make more from the company. Pepper and his daughter and son-in-law, Cassandra and John O'Tool, also began multi-year employment contracts with Genmar, holding management positions with the post-acquisition company -- Pepper as president of Genmar of Kansas, Cassandra as director of human resources and John as vice president of marketing.

Genmar terminated Pepper and his family within 15 months after the acquisition and discontinued Pepper's Horizon (later re-named Nova) brand of boats a year later. Genmar closed the Junction City facility and terminated its 119 employees this spring, following Genmar's acquisition of another boat manufacturer that was in bankruptcy.

Pepper's attorney, George Hanson of the Kansas City, Mo., firm of Stueve Siegel Hanson Woody LLP, said that Pepper sold the company for a lower price because of the promise of future earnings. But following the acquisition of Horizon Marine, Genmar made no earn-out payments to Pepper. In fact, Hanson said, Genmar thwarted Pepper's efforts to earn the extra payments. As a large company, Hanson said that Genmar followed the market trends and simply abandoned Horizon to move on to greener pastures.

In the lawsuit, Pepper alleged that Genmar fraudulently induced him to sell his company and thereafter breached the purchase agreement's express terms and implied covenant of good faith and fair dealing. Pepper also alleged that Genmar breached its employment contracts and engaged in discrimination and retaliation.

Genmar denied any wrongdoing.

"This is a huge victory for Mr. Pepper and his family," said Hanson. "The jury sent a strong message to Genmar that its business conduct was unacceptable and awarded Mr. Pepper and his family substantial damages to compensate them for their losses."

"This verdict is particularly rewarding in light of the arrogant and cavalier attitude expressed by Genmar and its executives throughout the litigation," Hanson added. "This verdict is complete vindication for Mr. Pepper and validates his 24 years of distinguished service in the marine industry."

Hanson said as the lawsuit worked its way through the system, Genmar made no bona fide offer to settle the suit.

Pepper now lives in Birchwood, Wis., and is starting to do consulting to the boating industry. He said he has fond memories of Junction City -- both the community and his employees.

He said when he brought the business to Junction City, the community was really behind it all the way. The business had a number of local investors, including the late Bob Weary, Merrill Werts, Steve Struebing and John G. Montgomery, among others.

Pepper said his employees, most of whom had no experience in any kind of boat manufacturing, did a great job of learning quickly and turning out a quality product.

"I was so proud of them for what they were able to accomplish in such a short period of time," Pepper said.

The legal battle has been a long, drawn-out process for Pepper and his family. He said it's taken a lot out of them emotionally but they feel they've been vindicated.

"Phyllis, my wife, and Cassie and John and I had made Junction City our home," Pepper said. "After the way things turned out, we feel justice has been done."

Local investors were not included as plaintiffs in the suit, Hanson said, but he added that Pepper is committed to treating fairly anyone who left money in the company.

"We're evaluating any kind of potential recovery on behalf of the other investors," Hanson said.