R.M.S. Titanic, Inc. v. Wrecked & Abandoned Vessel

924 F. Supp. 714
CourtDistrict Court, E.D. Virginia
DecidedMay 10, 1996
DocketCivil Action 2:93cv902
StatusPublished
Cited by14 cases

This text of 924 F. Supp. 714 (R.M.S. Titanic, Inc. v. Wrecked & Abandoned Vessel) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
R.M.S. Titanic, Inc. v. Wrecked & Abandoned Vessel, 924 F. Supp. 714 (E.D. Va. 1996).

Opinion

MEMORANDUM OPINION AND ORDER

CLARKE, District Judge.

At issue before the Court is a challenge to its Order of June 7, 1994, granting salvor-inpossession status to R.M.S. Titanic, Inc. For the reasons stated from the bench and elaborated on more fully, below, the Court’s ruling from the bench being made a part hereof, the Court DENIES Joslyn’s Motion requesting a rescission of the June 7,1994 Order.

I. PROCEDURAL HISTORY

On August 23, 1993, RMS Titanic, Inc. (RMST) filed a verified complaint asking the Court to declare it to be the sole and exclusive owner" of any items salvaged from the RMS TITANIC (TITANIC). 1 As required *716 by the Court, notice to other potential salvors and interested parties was given via publication. Liverpool and London Steamship Protection and Indemnity Association (LLSP) was the only party to file a claim. RMST and LLSP subsequently entered into a settlement agreement, and the Court dismissed LLSP’s claim with prejudice. Because there were no other outstanding claims against the vessel, the Court éntered an Order on June 7, 1994, conferring salvor-inpossession status of the TITANIC to RMST and granting it the exclusive rights over any items salvaged from the TITANIC while it remained salvor in possession. 2

Following the entry of this Order, RMST successfully completed a salvage expedition to the TITANIC during the 1994 “weather •window.” 3 On August 10, 1994, RMST presented its Periodic Report of Salvor in Possession on the Progress of Recovery Operations to the Court. The Court entered an Order filing the Periodic Report, and also noted that RMST had previously conducted successful salvage operations in June of 1987 and June of 1993. Order of Aug, 10, 1994. While the present action was pending in this Court, RMST filed a second periodic report.

On February 20,1996, John A. Joslyn (Joslyn or Intervenor) filed a motion pursuant to Rule 60(b) of the Federal Rules of Civil Procedure asking the Court to rescind its order naming RMST salvor in possession of the TITANIC. Joslyn claimed that RMST’s status should be rescinded because it has failed to diligently salvage the TITANIC, has evidenced no intention to salvage it in the future, and, at this time, is financially incapable of utilizing its rights. In its response, in addition to refuting Joslyn’s claims, RMST asserted that Jóslyn hád no standing to bring his motion. Thus, before the Court could hear the merits of the claim, the Court was obliged to resolve the issue of the Joslyn’s standing. By Order of April 1, 1996, the Court held that Joslyn did have standing and that, even if he did not, the Court had the power to reconsider its prior Order either sua sponte under Rule 60(b) of the Federal Rules of Civil Procedure or under its inherent power to modify and interpret its original order. See Order of Apr. 1,1996.

An evidentiary hearing was held from April 29 to May 1, 1996. The Court heard testimony from a number of witnesses concerning both RMST’s salvage-related activities -since its 1994 expedition and RMST’s present financial situation.- Because the summer “weather window” was approaching and a quick determination of the parties’ status was necessary, the Court ruled from the bench after closing arguments. The Court more fully discusses the basis for its ruling below.

II. FINDINGS OF FACT

A. RMS Titanic, Inc.

RMST, the present salvor in possession of the RMS TITANIC is incorporated in Florida and is a public corporation with sixteen million outstanding shares. The largest shareholders of RMST include Titanic Ventures Limited Partnership (TVLP) (with approximately 43% of the shares), Mr. Arnold Geller (with approximately 12% of the shares), and Mr. William Gasparrini (with approximately 12% of the shares). TVLP, the largest shareholder, is a Connecticut limited partnership with one general partner and fifteen limited partners. Another corporation, Oceanic Research and Exploration *717 (ORE), a Delaware corporation, is the general partner of TVLP. 4

Mr. George Tulloeh, the current president of RMST, testified that since its inception, RMST has lost $9.8 million. 5 RMST also has a number of outstanding liens and encumbrances against certain TITANIC artifacts. A Virginia law firm has a lien against two artifacts located in Virginia for legal services rendered. These two artifacts are to be exhibited in the Tidewater, Virginia area until the attorneys’ fees are paid. RMST also has an agreement with Eleetricité de France (EDF), the conservator of the 1987 artifacts, which gives EDF the right to exhibit fifteen TITANIC artifacts for ten years in lieu of collecting $70,000.00 which RMST still owes EDF for its conservation work.

In addition to the attorneys’ fees owed for litigation over salvage rights, RMST has also been a party in at least two other actions. Although one of these lawsuits has been dropped, RMST’s potential liability in the other is unclear.

Additionally, RMST has a number of outstanding debts. It still owes money to LP3, a conservation laboratory in France, for past conservation efforts. Moreover, Mr. Stéphane Pennee, the director of LP3, testified that to merely store and preserve the artifacts currently at LP3 will cost RMST an additional $23,000.00. RMST also has a few “friendly” debts, which their creditors are not collecting at the moment. In fact, Mr. Tulloch’s testimony, which was uncontradicted, indicated that these creditors may prefer to be official sponsors of RMST-run TITANIC events in lieu of being repaid.

Despite its debt load, RMST remains a financially viable entity. Although RMST appears to have little cash on hand, RMST presented evidence that it has a number of exhibition contracts signed or pending. A few companies have also signed contracts with RMST to obtain advertising rights. A contract for the production of a two-hour documentary is also pending. RMST, through its marketing partner, has been making money through the sale of videos and coal. See discussion infra part II.B. Finally and most significantly, RMST’s marketing partner has organized two cruises to the wreck site in order to generate income to finance the 1996 salvage operations. 6 Ticket prices range from $1,800 to $6,950. As of the date of the hearing, 60% of the cabins had been booked on one ship and 10% had been booked on the other. 7 Michael R. Giorgio, the marketing company’s chief financial officer, testified that RMST would net $2.4 million dollars from the cruises. He also testified that if the receipts for the cruise sales are insufficient to cover IFREMER’s 8

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Bluebook (online)
924 F. Supp. 714, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rms-titanic-inc-v-wrecked-abandoned-vessel-vaed-1996.