By Tim McGlone
The Virginian-Pilot
© November 29, 2008
NORFOLK
After 15 years of legal wrangling in the federal courts, a judge is getting set to decide the fate of thousands of artifacts plucked off the ocean floor around the Titanic wreck site.
U.S. District Judge Rebecca B. Smith has indicated that she's leaning toward giving title of the artifacts to the company that has cared for them and displayed them in exhibitions around the world. For those 15 years, the federal court has held tight reins over what can be done with the property.
But before making a final ruling, Smith has said, the company must convince her that the historical pieces will not be sold or destroyed. To appease her, the company has been hammering out covenants and restrictions aimed at preserving the pieces.
But the company, Premier Exhibitions Inc., along with its subsidiary, RMS Titanic Inc., has come under increasing fire this year as its stock price has plummeted while expenses have soared.
Questions are being raised about the health and future of the company, which has been salvaging artifacts from the wreck site since 1987. The federal government, which must sign off on the covenants, has raised concerns about what would happen if Premier went bankrupt.
Arnie Geller, president and CEO of Premier and RMS Titanic, is facing an uprising by stockholders because of sagging profits and a near-record-low stock price. Ironically, Geller helped orchestrate a company coup about 10 years ago for the same reasons.
Chicago-based Sellers Capital LLC, a hedge fund run by venture capitalist Mark Sellers, is Premier's majority shareholder. Sellers issued a news release earlier this month calling for Geller's resignation; new members of the board of directors; and vast changes in company operations.
His chief complaints include what he called Geller's excessive salary and compensation - this year worth $1.26 million - at a time when the company's stock has fallen 55 percent, to around 60 cents a share.
Geller has refused to step down and has balked at the idea suggested by Sellers to "monetize" the Titanic assets. In other words, Sellers wants to sell them.
The 5,500 artifacts under Premier's control are estimated to be worth more than $100 million. But Smith, the Norfolk federal judge, has made it clear that the artifacts can never be sold on the free market. The company has tried to sell them to museums, but none has stepped forward with an appropriate price.
In an interim order that Smith filed earlier this year, she wrote that her final order with the covenants "would ensure that the RMS Titanic and its artifacts are preserved as an international treasure for posterity."
Company officials said they were disturbed by Sellers' statements, according to Robert McFarland, a Virginia Beach attorney who represents the Atlanta-based Premier/RMS Titanic.
"These are not our artifacts to sell," McFarland said earlier this week.
In a Nov. 18 court filing, the company tried to assure Judge Smith that Sellers was out of line.
"Mr. Sellers' statements about monetizing the company's Titanic assets were unauthorized and improper," the company wrote to the judge. The company sent Sellers a letter stating that the board "disapproved and disavowed" of his "unauthorized comments."
Sellers, in a news release earlier this month, backed away from those statements but said he still plans to go forward with his proxy fight.
Some investors in RMS have long sought to reap large profits from the artifacts of arguably one of the most famous ships in the world. The company has relied on exhibitions as its chief source of income, but upkeep of the artifacts grows each year. Salvage trips to the North Atlantic cost millions as well.
The company recently signed a 10-year contract to exhibit some of the artifacts at the Luxor hotel and casino in Las Vegas. It also has exhibits in five cities.
The Titanic struck an iceberg and sank on its maiden voyage in April 1912, killing more than 1,500 passengers and crew. Its wreckage is 400 miles southeast of Newfoundland, scattered at a depth of about 2-1/2 miles.
About 700 people survived, but only one is known to still be alive. Millvina Dean, who was 9 weeks old when she was rescued from the sinking ship, lives in England. She recently sold off some of her personal Titanic mementos to help pay for her care in a nursing home.
The Virginian-Pilot
© November 29, 2008
NORFOLK
After 15 years of legal wrangling in the federal courts, a judge is getting set to decide the fate of thousands of artifacts plucked off the ocean floor around the Titanic wreck site.
U.S. District Judge Rebecca B. Smith has indicated that she's leaning toward giving title of the artifacts to the company that has cared for them and displayed them in exhibitions around the world. For those 15 years, the federal court has held tight reins over what can be done with the property.
But before making a final ruling, Smith has said, the company must convince her that the historical pieces will not be sold or destroyed. To appease her, the company has been hammering out covenants and restrictions aimed at preserving the pieces.
But the company, Premier Exhibitions Inc., along with its subsidiary, RMS Titanic Inc., has come under increasing fire this year as its stock price has plummeted while expenses have soared.
Questions are being raised about the health and future of the company, which has been salvaging artifacts from the wreck site since 1987. The federal government, which must sign off on the covenants, has raised concerns about what would happen if Premier went bankrupt.
Arnie Geller, president and CEO of Premier and RMS Titanic, is facing an uprising by stockholders because of sagging profits and a near-record-low stock price. Ironically, Geller helped orchestrate a company coup about 10 years ago for the same reasons.
Chicago-based Sellers Capital LLC, a hedge fund run by venture capitalist Mark Sellers, is Premier's majority shareholder. Sellers issued a news release earlier this month calling for Geller's resignation; new members of the board of directors; and vast changes in company operations.
His chief complaints include what he called Geller's excessive salary and compensation - this year worth $1.26 million - at a time when the company's stock has fallen 55 percent, to around 60 cents a share.
Geller has refused to step down and has balked at the idea suggested by Sellers to "monetize" the Titanic assets. In other words, Sellers wants to sell them.
The 5,500 artifacts under Premier's control are estimated to be worth more than $100 million. But Smith, the Norfolk federal judge, has made it clear that the artifacts can never be sold on the free market. The company has tried to sell them to museums, but none has stepped forward with an appropriate price.
In an interim order that Smith filed earlier this year, she wrote that her final order with the covenants "would ensure that the RMS Titanic and its artifacts are preserved as an international treasure for posterity."
Company officials said they were disturbed by Sellers' statements, according to Robert McFarland, a Virginia Beach attorney who represents the Atlanta-based Premier/RMS Titanic.
"These are not our artifacts to sell," McFarland said earlier this week.
In a Nov. 18 court filing, the company tried to assure Judge Smith that Sellers was out of line.
"Mr. Sellers' statements about monetizing the company's Titanic assets were unauthorized and improper," the company wrote to the judge. The company sent Sellers a letter stating that the board "disapproved and disavowed" of his "unauthorized comments."
Sellers, in a news release earlier this month, backed away from those statements but said he still plans to go forward with his proxy fight.
Some investors in RMS have long sought to reap large profits from the artifacts of arguably one of the most famous ships in the world. The company has relied on exhibitions as its chief source of income, but upkeep of the artifacts grows each year. Salvage trips to the North Atlantic cost millions as well.
The company recently signed a 10-year contract to exhibit some of the artifacts at the Luxor hotel and casino in Las Vegas. It also has exhibits in five cities.
The Titanic struck an iceberg and sank on its maiden voyage in April 1912, killing more than 1,500 passengers and crew. Its wreckage is 400 miles southeast of Newfoundland, scattered at a depth of about 2-1/2 miles.
About 700 people survived, but only one is known to still be alive. Millvina Dean, who was 9 weeks old when she was rescued from the sinking ship, lives in England. She recently sold off some of her personal Titanic mementos to help pay for her care in a nursing home.
