Accusations are flying in courtrooms on both coasts between the founder of Harley Marine Services and its biggest investor, the global investment firm Macquarie.

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A bare-knuckle legal brawl has erupted on the Seattle waterfront between the founder of Harley Marine Services and its biggest investor, with accusations flying in courtrooms on both coasts about embezzlement, fraud and an attempted boardroom coup.

At stake in the battle between Chairman and CEO Harley Franco and the huge Australia-based investment firm Macquarie is control of a tug and barge company with 120 vessels from Alaska to the Gulf Coast and some 800 employees, a third of them here.

By one account, it’s a story of how nasty a powerful private equity firm can get when trying to have its way. To hear the other side, it’s about a founder abusing his position to misappropriate corporate funds and prop up his overextended personal finances.

The personal drama is amplified by the fact that the company’s chief operating officer Matt Godden, first hired by Franco years ago and groomed as his apparent successor, has turned against him — and this month voted to fire him.

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The corporate infighting also has rattled the company’s customers and bankers, documents in the case say.

Franco founded Harley Marine in 1987 with one tug and one barge and built the Seattle-based company into an operation with $189 million in revenue last year. The company, based on Harbor Island, has a glossy new headquarters that echoes its avowed commitment to high environmental standards.

While Franco owns 53 percent, a Macquarie affiliate owns 47 percent thanks to a 2008 investment, according to a King County Superior Court lawsuit he filed July 6 against Macquarie and Godden.

The previous day, his suit says, Macquarie had arranged a telephone call in which the only two board members participating — its representative and Godden — voted to fire Franco. Franco’s suit says he and the other board member, his appointee, weren’t notified of the meeting.

Macquarie then “cut off my access” to the company’s computers and credit cards, leaving him “locked out from any and all business operations.”

“Macquarie and Godden have managed to strip me of my life’s work and irreparably harm my reputation and credibility, all based on action taken at a sham board meeting that has no legal effect,” his suit says.

The vote to fire Franco followed a suit that Macquarie filed a few days earlier in Delaware Chancery Court, alleging that he in the past year misappropriated some $457,000 from the company for “lavish family vacations, unauthorized charitable contributions, vehicle costs, sports and entertainment tickets, and wine purchases.”

It also asserted he “stole from Harley Marine” two marine tow winches worth $1.2 million by including them in a deal involving another personal business.

Macquarie’s suit alleges Franco was diverting company assets “because of his personal financial distress,” including “the extremely precarious position of Harley Marine Asia, an unrelated business in which Franco has invested millions of dollars of his own funds,” as well as several home mortgages and other obligations. The suit claims that “in total, Franco has approximately $118 million in personal debt with monthly payments of $789,000.”

Macquarie withdrew that lawsuit after its directors fired Franco — an action it contends was done according to the company’s bylaws. It has filed a new Delaware suit asking a judge to support its interpretation of those rules.

Franco says the allegations are pretexts to force him out of the company. He has denied any improprieties, in both lawsuits, and has also argued that even if any payments were wrongly charged to the company, there are solutions short of terminating him.

Filings by Franco’s attorneys also assert that contrary to Macquarie’s allegations, Harley Marine “is highly profitable and Franco is not at all in a strained financial position. In fact, Franco has a net worth of over $200 million.”

He claims the turmoil stems from Macquarie’s desire for “a liquidity event” — in other words, selling the company so it could cash out its 10-year-old investment — and from Godden’s unhappiness that he wasn’t promoted to president of the company.

Before acting to depose Franco, Macquarie’s lawyers last month sent a “forensic accounting team” to go through Harley Marine’s books. Its lawsuit claims they uncovered “evidence that Franco diverted for his own benefit approximately $2.7 million” in total.

Franco claims Macquarie’s team did not interview him or his senior managers to check on those accusations before launching their lawsuit. His countersuit includes affidavits from several company executives insisting there was nothing improper about the transactions Macquarie cites.

One indicator of the high stakes involved: Papers in the case show that Harley this spring raised almost $450 million by selling corporate bonds in a private offering.

Portions of that “strictly confidential” offering document filed in the case portray Harley as growing its revenues and fleet steadily even through the global financial crisis — although its newer operations around New York/New Jersey and the Gulf Coast “generated negative operating income.”

Franco on July 6 won a temporary restraining order in his Seattle lawsuit, declaring he remains president and CEO of Harley Marine, and ordering his access to the company restored.

Macquarie plans to fight that ruling. One of its first steps was to ask the King County court to seal certain documents because their disclosure could harm the company.

But the upheaval has already damaged Harley Marine, judging by filings in the case.

Godden found it necessary to reassure Harley Marine “teammates” in a July 4 email that despite the infighting, “the company remains financially viable and subject to a formal and structured governance process.”

Franco painted a darker picture of the uncertainty, declaring that it has caused clients to consider ending contracts and bankers to warn they could revoke financing arrangements, all because Macquarie and Godden “have sowed chaos on a potentially massive scale.”