Delaware court finally decides fate of presidential yacht

The years of Delaware court fights over the presidential yacht, USS Sequoia, appear to be over.

But the-once stately vessel, called by some "America's most famous boat," has spent the time rotting in a Virginia shipyard and will likely require millions of dollars in repairs and possibly an exterminator before it can safely set sail again.

The good news is that its new owners won't owe a penny to the previous owners following a long Chancery Court battle over possession of the historic ship.

The judge in the case, Vice Chancellor Sam Glasscock III, wrote a 21-page opinion released this week that sums up the poor vessel's recent plight.

"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," wrote Glasscock in the opinion.

It was a sad state for a ship where Franklin Roosevelt and John F. Kennedy, among other presidents, hosted dignitaries and friends.

Glasscock ruled that FE Partners, a Washington, DC investment group that specializes in historic ship restorations could purchase the Sequoia at an adjusted price of zero dollars. The decision capped years of legal wrangling over ownership and finally, the purchase price of the ship. The vessel was owned by Sequoia Presidential Yacht Group LLC. Washington Attorney Gary Silversmith was the principal owner and offered the vessel for charters along the Potomac River until it was pulled for repairs.

“FE Partners is committed to restoring and preserving the Sequoia in cooperation with the U.S. Coast Guard so that future generations of Americans will be able to enjoy the storied past of this magnificent yacht," said Richard Graf, general counsel of FE Partners in an email.

Earlier this year, marine experts estimated the cost of repairing the national landmark to seaworthy condition ranged from an estimated $400,000 to upwards of $4 million if the hull has to be significantly rebuilt.

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Once that work is complete, the value of the repaired and seaworthy former presidential yacht would be between $7.8 million and $13 million, said Earl McMillen III, founder of McMillen Yachts in Newport, Rhode Island.

The historic yacht, designed by John Trumpy and built at the Mathis Yacht Building Company of Camden, New Jersey, in 1925, is in dry dock in Deltaville, Virginia.

The yacht had earlier been awarded to FE Partners, LLC, based on another Chancery Court decision.

In this latest decision, Glasscock was asked to decide the value of the yacht and whether the former owner, Sequoia Presidential Yacht Group LLC was owed money for the vessel.

The deal was complicated because FE Partners loaned money to the Sequoia Group to make repairs. If the loan soured, FE had an option to purchase the yacht for $7.8 million.

It was Glasscock's task to assess the costs and outstanding debts. He concluded that FE Partners owed the Presidential Yacht Group, owned by Washington attorney Gary Silversmith, nothing in exchange for the yacht.

"I find under the contracts that Silversmith was obligated to maintain the vessel such that it was safe, structurally sound and fully equipped for its intended use as a Potomac River cruise vessel," Glasscock wrote.

Instead, he found there was little evidence that happened, based on testimony from Silversmith's expert.

"I am left with only one side’s expert reports and testimony that bear on the question of the cost of Silversmith’s obligation to maintain the Sequoia ... Silversmith did not direct his expert to do an inspection that would allow him to answer the pertinent question, which is what would it take to put this vessel" in shape to meet the loan contract provisions, Glasscock wrote.

Meanwhile, FE Partner's experts told a sad tale of the condition of the yacht, describing rotting wood and a structural decline that was so significant it changed the shape of the hull.

For the last year and a half, the Sequoia has been on blocks in the boatyard. Initially, it was protected from the elements by shrink wrap but that covering was removed.

The damage done while dry stored is a fraction of what already haunts the vessel. McMillen said there is extensive rot in the hull and several of the structural blocks which make up the hull are cracked. It should have new wiring, new plumbing and new marine-grade air conditioning.

His total estimated cost to repair the boat ranged from $3.9 to $4.2 million.

He recommended it be slid onto an ocean-going barge and shipped to Rhode Island for repairs. The area has the expert shipwrights needed to do the work, he said.

In her present condition "would you ever put passengers on her?" asked an attorney for FE Partners.

"No," McMillen said.

"Would you ever put her in the water?" the lawyer asked.

"No," McMillen said.

Silversmith, during the court hearing, questioned whether there weren't capable boatyards along the Chesapeake Bay where the work could be done at less cost.

Restoring and repairing wooden boats is "a lost art," McMillen said. "I think, quite frankly, that's why they don't build wooden boats anymore. They are wonderful works of art."

The Sequoia's history makes it more than just an aging wooden boat. Franklin Delano Roosevelt hosted Winston Churchill on its deck; John F. Kennedy celebrated his last birthday on board the Sequoia; and Richard M. Nixon spent a night in 1974 with a bottle of whiskey at a shipboard piano before he resigned the presidency.

The 104-foot wooden vessel has changed hands several times in recent years since President Jimmy Carter had it sold at auction in 1977 for $286,000.

It fell into disrepair before it was purchased and restored by its current owner, Silversmith, a Washington lawyer and real estate developer. Silversmith said he paid $1.9 million in 2000, and sank millions into repairs.

Silversmith operated the boat for charter on the Potomac River for many years. He said that he had been maintaining and caring for the boat all along and even took it to the Chesapeake Maritime Museum in St. Michaels for repair. The boat was regularly hauled out of the water for maintenance.

Silversmith did not respond to a request for comment. His attorney declined to comment. FE Partners expect to issue a statement later Tuesday.

Contact Molly Murray at (302) 463-3334 or mmurray@delawareonline.com. Follow her on Twitter @MollyMurraytnj.