Judge Dismisses Presidential Yacht Fight

     MANHATTAN (CN) – New York lacks jurisdiction to hear a fight over the former presidential yacht Sequoia, and an alleged attempt to save it from “the Russians,” a state judge ruled in dismissing the case.
     The Sequoia, built in 1925, served every president from Herbert Hoover to Jimmy Carter, who sold it in a symbolic gesture of government thrift. Congress designated it as a National Historic Landmark in 1987.
     Its current owners, the Sequoia Presidential Yacht Group and Washington, D.C.-based attorney Gary Silversmith, sued FE Partners LLC in New York County Supreme Court this month.
     The complaint accused FE Partners of a “dastardly plan to wrest control” of the iconic yacht.
     Michael Cantor, FE Partners’ director, responded on Tuesday with an affidavit accusing Silversmith of neglecting his debts, attempting blackmail of a debtor and mistreating his crew.
     “On February 10, 2012, Mr. Silversmith, an attorney whom I have known for approximately five years and who had invited me a number of times to attend events on his yacht, the U.S.S Sequoia (the ‘Sequoia’), sent me a copy of what he claimed was an unsolicited offer from Russia’s largest company, Gazprom, to purchase the Sequoia for $20,000,000,” the affidavit states.
     Silversmith forwarded that offer with the company’s proposal to dock the yacht in St. Petersburg, Cantor claims.
     “In a series of e-mails and phone calls that day, Mr. Silversmith explained that he thought the offer appeared serious and indicated that if it were serious he was inclined to accept it. But he asked me to put together an alternative investor group, which would be interested in keeping the Sequoia in the United States and willing to provide him with certain investment capital,” the affidavit states. “He stated that he did want [sic] to have to ‘sell to the russians [sic], and be a scoundrel,’ and was willing to ignore the Gazprom offer if I could provide approximately $5 million.”
     Cantor claims that he and his partners entered into negotiations, in the hope of “preserving the Sequoia and keeping it in the United States.”
     The parties entered into a $7.5 million loan agreement on July 3, 2012. Under the terms, FE Partners agreed to provide $5 million in initial proceeds divided into two tranches. One clause of the agreement allowed FE to buy the Sequoia at a discount if Silversmith defaulted, according to the lawsuit.
     Cantor says that he visited the Sequoia and met its then-Captain Sergio Cespedes, who is not a party to the lawsuit, two days after he made the first payment, to discuss how to maintain and restore the yacht.
     Silversmith missed this meeting because he “left the country for vacation during this critical period,” Cantor claims in the affidavit.
     “In Mr. Silversmith’s absence, the Sequoia crew spoke openly and freely, and informed me of numerous problems that plaintiffs had failed to disclose to FE Partners in advance of the loan closing,” the affidavit states.
     Cantor claims that Cespedes told him that the yacht had outstanding debts and that the crew had repeatedly not been paid.
     After this meeting, Cantor claims, he started sending default notices on the loan agreement, including one informing Silversmith that the Sequoia owed more than $104,000 to (nonparty) Gina Sanjines.
     “Unable or unwilling to pay the outstanding and previously undisclosed $104,000 debt, Mr. Silversmith appears to have attempted to try to blackmail Ms. Sanjines,” Cantor’s affidavit states. “On August 1, 2012, he wrote to Mr. Cespedes, asking him to convey to Ms. Sanjines that if she would not accept $80,000 as full repayment of the loan, Mr. Silversmith would call on an alleged contact at the White House, where I understood Ms. Sanjines was employed. Mr. Silversmith apparently also informed Mr. Cespedes that he had already discussed the matter with the Inspector General of the Internal Revenue Service – whom I understood was a frequent visitor to the Sequoia – and would pursue those contacts if she did not accept less than Ms. Sanjines was owed so that he could avoid defaulting under the loan agreement.”
     Judge Charles Ramos dismissed Silversmith’s case on Thursday, in a brief order citing CPLR 3211(a)(8), the New York City code governing jurisdiction.

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