The last US presidential yacht, Sequoia, has been sold for zero dollars after an investment group won a lengthy court battle over the vessel – which remains listed as a national historic landmark but has become “home to raccoons” as it languishes in dry dock.
Presidents from Herbert Hoover to Jimmy Carter once entertained dignitaries and diplomats on board the 104-foot wooden yacht or simply sought refuge there from the Oval Office. But Carter had it sold at auction in 1977 for $286,000.
It changed hands several times, and was used to conduct entertaining and sightseeing tours of the Potomac river from its dock in Washington DC, with four-hour charters costing $10,000 plus food and drink.
But most recently it has lain rotting at a shipyard in Deltaville, Virginia.
Delaware judge Sam Glasscock ruled on Monday that FE Partners – an investment entity formed by Washington DC-based Equator Capital Group and members of India’s wealthy Timblo family – could exercise an option to acquire the Sequoia at an adjusted option price of zero.
“The Sequoia, an elderly and vulnerable wooden yacht, is sitting on an inadequate cradle on an undersized marine railway in a moribund boatyard on the western shore of the Chesapeake, deteriorating and, lately, home to raccoons,” Glasscock noted.
Monday’s ruling stems from a dispute involving a $7.5m loan from FE Partners to the boat’s owners, Sequoia Presidential Yacht Group LLC, led by Washington lawyer and businessman Gary Silversmith.
The agreement gave FE Partners the right to exercise an option to purchase the yacht for $7.8m in the event of a default.
After a lengthy dispute in which Sequoia tried to stop FE Partners exercising its purchase option, the judge found that the loan was fraudulently induced and eventually reduced the price to zero after deducting expected repair costs, including replacing the wooden hull, and other liabilities.
The judge rejected Silversmith’s contention that it would cost only about $310,000 to address problems outlined in Coast Guard inspections and to get the Sequoia floating again.
“Today the court ruled that the lender can buy the Sequoia with a credit bid that essentially allows them to not pay any additional money at closing,” Silversmith said. “Of course we are disappointed. We remain ready, willing and able to pay off the lender in full but unfortunately it appears that we will be denied that opportunity.”
FE Partners general counsel Richard Graf said: “FE Partners is committed to restoring and preserving the Sequoia in cooperation with the US Coast Guard so that future generations of Americans will be able to enjoy the storied past of this magnificent yacht.”
With the Associated Press
