Officials of Group That Restored Presidential Yacht Named in Suit
WASHINGTON (AP) _ A Washington bank has filed a $17 million lawsuit against officials of the nonprofit organization that bought and restored the presidential yacht Sequoia, alleging that they committed fraud.
The suit, filed in U.S. District Court by the National Bank of Washington, is the latest blow for the group that has been struggling to finance restoration of the 63-year-old vessel. The yacht was to have been turned over to President Bush in November. The ship is sitting in drydock in Norfolk, Va., with the project’s liabilities of nearly $10 million outweighting assets by more than $3.8 million, according to the suit.
The suit asks for the $2.3 million the bank lent to the Presidential Yacht Trust, as well as interest, attorney’s fees and punitive damages.
Named in the suit are R. Josh Lanier, executive director of the trust, and John N. Mcguire, chairman of the trust’s board of trustees.
In November, according to the suit, Maguire executed a ″preferred ship mortgage,″ under which the trust granted him a $4.1 million mortgage because he provided the funds to buy the vessel and pledged his own assets as collateral for the $4.2 million loan from Signet Bank.
The mortgage to Maguire, the suit alleges, constituted a fraudulent transfer. ″John Maguire has already invested in excess of $4 million and made the trust viable for as long as it was,″ said Ben Cotten, an attorney for the trust. He said the bank knew Maguire had a prior lien when the loan was made.
Officials of the bank and its attorneys declined comment on the suit.
″The ship floats, but the suit doesn’t,″ John Flannery, an attorney for Lanier and Maguire, said Wednesday. ″It’s all wet.″
The bank earlier filed two suits against the trust itself in District of Columbia Superior Court.
The trust purchased the vessel for $1.5 million and spent $3.5 million on an overhaul. The trust has been in default on its loan since May, according to court papers.