By Joseph Ax
NEW YORK, Jan 11 (Reuters) - A lawyer who owns the former
presidential yacht has filed a lawsuit against a company
accusing it of a "dastardly plan" to force him into financial
distress and acquire the boat at a discounted price.
The Sequoia was the presidential yacht for five decades,
serving presidents from Herbert Hoover to Jimmy Carter until it
was decommissioned in 1977. Gary Silversmith, a lawyer and
developer who bought it in 2000, describes it in his lawsuit as
"possibly the most important piece of Americana not owned by the
United States government."
Silversmith filed a lawsuit this week in Manhattan Supreme
Court against FE Partners, asserting the company deliberately
withheld part of a $5 million loan to Silversmith and then
falsely claimed he defaulted in an effort to take control of the
boat. The loan terms permitted FE to purchase the yacht at a
discounted price if he failed to pay back the loan.
"Defendant developed and then instituted a dastardly plan to
wrest control of the Sequoia from plaintiffs," the lawsuit said.
Silversmith is seeking an order preventing FE Partners from
buying the yacht.
In a statement, Richard Graf, an attorney for FE Partners,
said the lawsuit was "grossly inaccurate and without merit."
According to the boat's website, the Sequoia was the site of
various historical moments, including John F. Kennedy's final
birthday party and high-level cabinet and diplomatic meetings.
Silversmith acquired the yacht in 2000 and spent millions to
Following the economic downturn, Silversmith had difficulty
affording necessary repairs and secured a loan to help cover
capital costs from FE Partners, a company controlled by a
wealthy Indian family, the Timblos, the complaint said.
They agreed on a $5 million loan that included an option to
buy the yacht for $13 million. The deal also allowed FE Partners
to buy the yacht for $7.8 million in the event of a default.
According to the lawsuit, FE Partners was obligated to pay
S3.9 million in the loan's first installment but only gave him
$2.5 million, ensuring that he would have trouble meeting his
FE Partners then asserted in numerous notices that he had
defaulted, claiming variously that Silversmith had failed to pay
off certain debts, was late in paying his employees and allowed
guests to bring prostitutes on board, all allegations
Silversmith denied in the complaint. The company informed
Silversmith it planned to exercise its option to buy the yacht
for $7.8 million.
"Defendant's actions are motivated by nothing more than
overwhelming avarice and the malicious desire to wrest the
Sequoia from Sequoia LLC for the benefit of the Timblo family,"
the complaint claimed.
Graf, the lawyer for FE, said the company would fight
Silversmith for control of the yacht.
"It is our intent to preserve the Sequoia Presidential Yacht
-- and other historically significant antique vessels -- so that
future generations of Americans will be able to enjoy and
appreciate these treasured American artifacts," he said.
The case is The Sequoia Presidential Yacht Group v. FE
Partners, New York State Supreme Court, New York County, No.
For Silversmith: Larry Hutcher and Joshua Krakowsky of
Davidoff Hutcher & Citron.
For FE Partners: John Vukelj of DLA Piper.
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