On February 20, 2024, before the market opened, Malibu Boats announced that the Company’s Chief Executive Officer had “mutually agreed” to cease to serve as CEO. On this news, the Company’s stock price fell $4.33 or 9.1%, to close at $43.15 per share on February 20, 2024, on unusually heavy trading volume. Then, on April 11, 2024, after the market closed, Malibu Boats revealed that Tommy’s Boats had filed a complaint against the Company. After the Company disclosed news of the lawsuit, various media outlets publicized the Complaint, which alleged the Company “engaged in an elaborate scheme” to “pump nearly $100 million” worth of inventory into Tommy dealerships since late 2022 to “artificially inflate Malibu’s sales performance.”
According to the Complaint, Malibu Boats forced the Company’s highest priced, highest margin, slow moving “Malibu” branded inventory (as opposed to the lower-margin, but faster moving “Axis” brand) onto Tommy’s dealerships. Malibu Boats recognizes a sale when the dealer takes delivery of the boat, regardless of whether it has been sold to the end user. As a result, this scheme enabled the Company to represent that it experienced strong wholesale demand and sales, even as sales to the end user declined. The Complaint revealed that, approximately one week prior to the Company announcing the separation with Defendant Springer, certain “Malibu stakeholders” admitted to the principal of Tommy’s dealerships that Malibu was in fact “intentionally pumping Tommy’s full of inventory.” The Complaint further alleged the Company withheld payment of incentives from Tommy’s for nearly two years before suddenly cutting ties with Tommy’s. On this news, the Company’s stock price fell $3.34, or 7.99%, to close at $38.48 per share on April 12, 2024, on unusually heavy trading volume. The Company’s common stock price continued to fall the next consecutive trading session, falling $2.34 or 6% to close at $36.14 per share on April 15, on unusually heavy trading volume.
The Complaint filed in this class action alleges that throughout the class period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that Malibu Boats engaged in an “elaborate scheme to over manufacture and pump nearly $100 million of its highest priced, highest margin, slow moving boat inventory into fifteen Tommy’s dealerships”; (2) that, as a result, the Company artificially inflated Malibu’s sales performance, market share, and stock value; (3) that the Company was withholding certain incentives and rebates from its dealers; (4) that, as a result of the foregoing, the Company faced substantial risk of litigation from one of its top dealers, Tommy’s; (5) that the Company’s CEO departed due to this role in this scheme; and (6) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
On August 15, 2024, the United States District Court for the Southern District of New York appointed the Retiree Benefit Trust of the City of Baltimore as Lead Plaintiff and Saxena White P.A. as Lead Counsel.
On October 4, 2024, Lead Plaintiff filed an amended complaint. On November 11, 2024, Defendants filed a motion to dismiss the amended complaint. On December 6, 2024, Lead Plaintiff filed their opposition to the motion to dismiss, and on December 20, 2024, Defendants filed a reply in support of the motion to dismiss.
After an all-day mediation session on May 16, 2025, the parties reached an agreement to settle the action for $7.8 million for the benefit of the settlement class. On July 31, 2025, Lead Plaintiff filed a stipulation and agreement of settlement and an unopposed motion for preliminary approval of class action settlement. On October 8, 2025, the Court granted preliminary approval of the settlement. Final approval and fee motions were filed on December 23, 2025.
The final settlement approval hearing was held on February 2, 2026, and on February 9, 2026, the Court issued orders approving the settlement and the plan of allocation. On February 24, 2026, the Court issued an order awarding attorneys’ fees and the reimbursement of litigation expenses.
The settlement notice, claim form, and other relevant information is available on the Settlement Administrator’s case website, Malibu Boats Securities Litigation.
