One year after the acceptance of a default motion in the Sequoia lawsuit, the court case still remains active. In addition, the longest-serving Presidential yacht in American history has not exchanged hands.
It’s the latest chapter in a nearly two-year, ugly battle over Sequoia, built in 1925 and cruised aboard by Presidents Herbert Hoover, Franklin D. Roosevelt, John F. Kennedy, and Richard Nixon. Sequoia has been in a series of private hands since 1977. In 1987, the yacht was designated a National Historic Landmark.
In August 2013, a Delaware Chancery Court judge formally dismissed a breach of contract lawsuit over Sequoia. That dismissal stemmed from the plaintiff, Sequoia Presidential Yacht Group, agreeing to a default motion to allow the yacht to change hands. Sequoia Presidential Yacht Group, owned by Gary Silversmith, a Washington, D.C. lawyer and developer, filed the breach of contract lawsuit in February 2013. The defendant was FE Partners, a U.S. company primarily doing business in Washington, D.C. It had provided a $5-million loan to Silversmith in July 2012 so that he could continue maintaining Sequoia. Both parties agreed to two further points in the loan contract. FE Partners could acquire Sequoia for $13 million if Silversmith wished to sell. FE Partners could also take ownership for $7.8 million if Silversmith failed to repay the funds. In his initial complaint, Silversmith accused FE Partners of “a dastardly plan” to wrest control of Sequoia from him, including forcing him to default. FE Partners countered with claims of millions in unpaid debts dating well before the loan agreement was signed and a deliberate attempt to hide these and other related matters. Further accusations were filed by both parties in the ensuing months, until the default motion was filed by FE Partners in June 2013. Silversmith agreed to it two months later.
Upon signing the formal lawsuit dismissal, the Delaware court judge also appointed an independent counsel to oversee the sale and transfer of Sequoia. That process was expected to take a few months, perhaps extending into early this year. But, the filings by both parties continued, focused on interest rates. Specifically, the parties disagreed over the post-judgment interest rate. In the loan document, an 8.75-percent interest rate per year was stipulated. Once the judge dismissed the suit, however, Silversmith argued a lower rate should have applied, citing a section of Delaware usury law. FE Partners argued for the contract rate. In June, the same judge who dismissed the case decided that the contract rate applied.
So, that should have ended the dispute once and for all, right? “Should” is the key word. Filings by both parties continue. On August 18, each side filed letters with the court.
FE Partners claims that a motion filed by Silversmith on August 13 to enforce the final order regarding Sequoia is “riddled with gross inaccuracies and misrepresentations and appears to be an attempt to re-write the procedural history and the loan documents.” The letter also states the motion is premature. FE Partners believes that the independent counsel should first submit his final report, which would spell out the total liabilities. In a response, Silversmith’s lawyer states that FE Partners keeps trying to delay the final order’s enforcement. The action “continues to cause harm to Plaintiffs and the Vessel, as fully set forth in the Motion,” he writes. He adds that the final-order motion can proceed, since the independent counsel has submitted preliminary conclusions and any further conclusions won’t pertain to the issues in the motion.
One thing the two parties in the Sequoia lawsuit can actually agree on: prompt intervention by the court.
The judge has yet to issue a ruling. In the meantime, Sequoia sits, and waits.
Robert Tanner
Owner of Presidential Yacht Sequoia Accused of Blackmail, Concealing $10 Million He Owed
http://www.usnews.com/news/blogs/washington-whispers/2013/02/11/presidential-yacht-sequoia-accused-of-concealing-10-million-owed