The claimed owner of Amadea, which has been under the custodianship of the United States for the past three years, has lost in U.S. court again. A federal judge has denied his request to block the government sale of Amadea, despite an ongoing appeal.
On June 6, a U.S. District Court judge denied the latest motion by Eduard Khudainatov and Millenmarin Investments. Khaudainatov claims to be the ultimate beneficial owner through Millemarin. They filed an appeal following a March ruling that allowed the United States to move closer to forcing forfeiture of Amadea and selling her at auction. In their appeal, they asked the court to stay the sale or at least prevent the yacht from selling for less than her appraised $230-million value. Additionally, they requested that the government post a bond to secure that full value while the appeal continues.
Specifically, Khudainatov’s and Millemarin’s legal team claimed that U.S. federal law requires stopping the sale. Lawyers for the U.S. Department of Justice (DOJ), however, stated that federal judges have discretion, based on a four-factor test. One factor, for instance, is whether the appeal would be likely to succeed. Another factor is whether the claimant would suffer irreparable harm. The remaining factors are whether a stay of the sale would detrimentally impact the opposing party, and whether there’s impact on the public interest.
The judge agreed with the DOL’s position. He indicated that Khudainatov and Millemarin were unlikely to win appeal because they previously lost legal attempts to prove ownership. Additionally, he stated that irreparable harm from a government sale of Amadea below her appraised value was speculative. The judge further noted that the government has spent about $32 million on transporting and maintaining Amadea. (The government seized her in Fiji in March 2022 and sent her to San Diego, where she currently sits.) Simultaneously, he noted it’s spending about $850,000 per month to maintain her. “A stay would injure the government—and thus, the public interest,” he wrote.
Finally, he denied the request to block the government sale of Amadea below a certain price. He also denied the request to have it post a bond to secure the $230-million valuation. The judge indicated that fair market value isn’t necessarily the same as the appraised value. Instead, it’s a reflection of what a person is willing to pay under the circumstances.
A related decision still remains to be made by the judge. In a counterclaim to Khudainatov’s and Millemarin’s filing, the DOJ requested having them post a $10.37-million bond to cover its costs if they want to delay the sale.
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