Almost all of the money was required up front. When I contacted Marc back in 2015, I was told it would be:
$5,000 - Initial deposit upon signing contract
$30,000 - When materials were ordered
$30,000 - When flatbed AND shell was completed
(Presumably at this point you could go and pick up the flatbed and see the full shell completed)
75% remaining balance - Due when interior is completed
25% remaining balance - Due when pickup
From what I can tell here, a lot of people had probably put 75% down and owed 25%.
My question here is... if you paid Marc for materials and a shell, and he had completed it, doesn't that shell BELONG to you? Even if it wasn't complete, don't you own the materials etc?And if the shell never existed, but he took payment for it, is that fraud? That's my only question.
Really good questions/points.
First, progress payments, done correctly, help everyone to manage risk and is nothing new for custom work. We do it at British 4x4 (my business in Durham, NC), and in my experience pretty much
every custom builder does it. Why? The alternative is for us to build something at risk of not getting paid when complete. As a little guy I'm not going to be taking on that risk because it could absolutely put me out of business. When that (former) customer decides that they aren't going to pay me for work I have invested time, money, and resources in, my only recourse is to look at litigation (and I'm going to be over the small claims limit, so it is going to cost me serious time and money to go that route). Nope. Nope. Nope.
With respect to beneficial ownership of work in process, it all depends on the language in the contract - and unless it specifically calls out that ownership is transferring during the build then the answer is
no. There's a good reason for this:
As an example, Marc closed his doors owing his landlord around a half million dollars - so why should the customers who made a million dollars in progress payments be given preferential treatment over the landlord? If the landlord's building and the electric company's power were used to help build that partially completed camper, they would justifiably feel that they have a claim on their prorated portion of the assets of the business as well. Generally all unsecured creditors (yes, including customers who made deposits) have to be treated equally. Yes it sucks, but the law says it gets to suck for everyone equally and nobody gets special treatment.
If Marc had just been a bad businessman, it would end there, because it is not against the law to be bad at business. The difference in this case is that Marc was flat-out lying to customers about the amount of progress, and then collecting money from them for work that wasn't being done/progress that wasn't being made. Marc could be a really convincing guy, especially when his back was up against the wall. His customers should be angry because he lied to them and took their money. (It's also my understanding that some of those customers are now pursuing him in court, though that is second hand information.)
Disclosure: I'm one of a number of people that invested (i.e. lost) hundreds of thousands of dollars and thousands of hours in Marc and XPCamper, so yeah I'm a bit angry about it all too.
