The lawsuit filed this month by the owner of Sequoia, the famed classic yacht that served a dozen American Presidents, against a company that loaned him money has been dismissed by a judge.
A judge with the Supreme Court of the State of New York issued the ruling in favor of the defendant, FE Partners, this week. FE Partners issued a statement saying that it “is committed to keeping the Sequoia in the United States and properly funding its maintenance so that future generations of Americans will be able to enjoy its storied past.” Sequoia is a 104-foot (32-meter) Trumpy built in 1925 and was the official U.S. Presidential yacht for 50 years, sold in 1977 to private interests by President Jimmy Carter. The megayacht was designated a National Historic Landmark in 1987.
Sequoia was acquired at auction in 2000 by Gary Silversmith, a Washington, D.C.-based lawyer and developer, who formed The Sequoia Presidential Yacht Group to oversee her. Because of the current ongoing economic crisis, however, Silversmith sought a loan last year to continue maintaining Sequoia. He formally arranged one in July 2012 with FE Partners, a U.S. company formed in March 2012 and principally doing business in Washington, D.C. On its website, FE Partners states that it is “currently interested in historically significant antique vessels and is a unique source of debt and equity capital to fund the maintenance, operations and restoration of yachts as well as certain commercial and decommissioned Naval vessels that might otherwise fall into disrepair, be dismantled and/or removed from U.S. waters.” FE Partners agreed to lend $5 million, and both parties agreed that the company could acquire Sequoia outright for $13 million if Silversmith wished to sell, or for $7.8 million if Silversmith failed to repay the funds.
Silversmith filed suit in New York the first week of January, alleging that FE Partners purposely loaned only partial funds to ensure that he’d default. He requested a temporary restraining order to prevent the company from enforcing the acquisition options, claiming “a dastardly plan to wrest control of the Sequoia” and “overwhelming avarice.” Silversmith further requested rescinding of the contract and monetary damages.
In a motion filed on January 22 to dismiss the suit, FE Partners stated, “The sole basis asserted for bringing suit in New York is a provision in the Loan Agreement in which Sequoia LLC, but not FE Partners, consented to being sued in New York.” It adds, “The Complaint selectively quotes the Loan Agreement, obscuring the fact that…the parties explicitly agreed that the borrower—and only the borrower—would consent to jurisdiction in New York and Washington, D.C. The clause does not purport to give borrower Sequoia LLC the option to bring suit in New York against lender FE Partners without proper jurisdictional basis.”
The judge granted the motion to dismiss, and dismissed Silversmith’s complaint in its entirety on January 24. Richard Graf, a lawyer representing FE Partners, says, “We are pleased that the New York Supreme Court promptly dismissed this unfounded complaint, so that we can again devote our attention to preserving a treasured piece of American history that many call ‘the floating White House.’” Anuj Timblo, a director of FE Partners, adds, “When my family learned that the Sequoia might be sold to a Russian firm and moved to St. Petersburg, we were delighted to invest funds to preserve the Sequoia and keep it where it belongs—in the United States of America.”
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