Iain Stuart Yardley
Member
Until I read this report I had no idea that RMS Titanic Inc had cut into the hull of Titanic to retrieve artefacts. I don't usually get involved in the salvage discussions but was just surprised that they had been allowed to penetrate and damage the wreck even further when I thought that it was generally agreed (?) that recovery of artefacts would only take place in the debris field.
This is the URL but for some reason it comes up error. http://www.dailypress.com/business/local/dp-38815sy0jan10,0,5568145.story?coll=dp-business-localheads
I have copied and pasted the relevant part of the report pertaining to the cutting of the hull.
TITANIC'S SALVAGER TAKING ON WATER?
Firm, some shareholders bickering over progress
by Peter Dujardin
Daily Press (Hampton Roads, Virginia)
January 10, 2004
NORFOLK -- Billions of underwater microbes eat at the steel RMS Titanic at the bottom of the north Atlantic Ocean - removing, by some estimates, up to 800 pounds of metal a day from the great ship. That's up from 200 pounds a day a few years ago.
But RMS Titanic Inc., the Atlanta-based company that's been legally designated the salvager for the 1912 wreck site, has made no efforts to get court approval to raise the actual vessel, beyond the mere artifacts it's allowed to bring to the surface now.
"The microorganisms eat the steel to get the iron out of it, and as the new hungry microbes are born, the rate of destruction keeps going up and up," said David Shuttle, a Pennsylvania resident, company shareholder and trustee of the Titanic International Society. "We need to tell the court that we're losing stuff that's significant for history."
The failure to press the courts on that issue is just one of a host of blunders that the current management team of RMS Titanic has made in recent years, Shuttle says.
A group of dissident shareholders now suing the company says the current management team knowingly defied a court order and cut into the ship's hull to remove artifacts, hurting the ship's - and the company's - integrity.
They say the managers have lined their pockets with exorbitant salaries and paid their friends for worthless studies. They also contend that when the current management took over the company during a hostile takeover in 1999, the managers misrepresented the number of shares that they controlled.
Those are the kinds of accusations now at the center of several legal struggles - including a $40 million lawsuit brought by shareholders against RMS Titanic Inc. and current management. The trial was supposed to get started in Norfolk federal court next week, until a federal judge postponed it. A hearing will be conducted Jan. 29.
"We have to rid ourselves of a management team that has done nothing in our best interests as a company ever since they illegally took over the company," said Shuttle, who is working with the plaintiffs in the case.
RMS Titanic officials, including chief executive officer Arnie Geller, referred calls to attorney Robert McFarland of McGuire Woods' Norfolk office.
"We have addressed all of those contentions, and we believe the evidence absolutely refutes those charges," McFarland said. "There was no cutting into the hull after the court order. There are no exorbitant salaries. They are being paid very close to what the former management was paid."
The hostile takeover, he added, was legal in every respect.
The shareholders say the current management team is mostly to blame for the company's stock woes. The stock closed Friday at 33 cents a share, down from more than $3 a few years ago. The company, which has eight employees, made only $800,000 in profit in fiscal 2003. That's up from a loss in 2001 but down from a $5 million profit in 1999.
The RMS Titanic Inc. salvage company first laid claim to the site in 1987, when it brought 1,500 artifacts to shore in Norfolk. In 1994, the Norfolk court declared RMS Titanic the official salvager for the wreck.
The company has since held several salvage operations, collecting about 6,000 artifacts, less than a tenth of the total number in the debris field. Three men at a time plunge to the Titanic wreckage in a French-owned submersible and lift the items to the surface using robotic equipment.
In 1999, Ohio resident Joe Marsh, the company's largest shareholder who invested more than $5 million into RMS Titanic, was unhappy with the way things were being done. He owns about 19 percent of the company, which together with other shareholders was enough to wrest control from the former managers.
But the team he helped install has done little to improve the company's fortunes, shareholders say.
The company makes its money by leasing its artifacts out to traveling shows, sponsored by media giant Clear Channel. That's the source of the $800,000 in profit in 2003. But other, bigger plans - including selling artifacts to various museums around the world, but not as one collection - were prohibited by the federal courts, which ruled that the company does not own the artifacts and can't sell them to whomever it wants.
The Norfolk court would likely approve a sale of the artifacts to an accredited museum as one unified set of artifacts. But a deal to sell it to The Mariners' Museum in Newport News was stymied a year ago when a judge observed in part that it didn't give enough return on investment to the shareholders.
Peter Dujardin can be reached at 247-4749 or by e-mail at [email protected]
This is the URL but for some reason it comes up error. http://www.dailypress.com/business/local/dp-38815sy0jan10,0,5568145.story?coll=dp-business-localheads
I have copied and pasted the relevant part of the report pertaining to the cutting of the hull.
TITANIC'S SALVAGER TAKING ON WATER?
Firm, some shareholders bickering over progress
by Peter Dujardin
Daily Press (Hampton Roads, Virginia)
January 10, 2004
NORFOLK -- Billions of underwater microbes eat at the steel RMS Titanic at the bottom of the north Atlantic Ocean - removing, by some estimates, up to 800 pounds of metal a day from the great ship. That's up from 200 pounds a day a few years ago.
But RMS Titanic Inc., the Atlanta-based company that's been legally designated the salvager for the 1912 wreck site, has made no efforts to get court approval to raise the actual vessel, beyond the mere artifacts it's allowed to bring to the surface now.
"The microorganisms eat the steel to get the iron out of it, and as the new hungry microbes are born, the rate of destruction keeps going up and up," said David Shuttle, a Pennsylvania resident, company shareholder and trustee of the Titanic International Society. "We need to tell the court that we're losing stuff that's significant for history."
The failure to press the courts on that issue is just one of a host of blunders that the current management team of RMS Titanic has made in recent years, Shuttle says.
A group of dissident shareholders now suing the company says the current management team knowingly defied a court order and cut into the ship's hull to remove artifacts, hurting the ship's - and the company's - integrity.
They say the managers have lined their pockets with exorbitant salaries and paid their friends for worthless studies. They also contend that when the current management took over the company during a hostile takeover in 1999, the managers misrepresented the number of shares that they controlled.
Those are the kinds of accusations now at the center of several legal struggles - including a $40 million lawsuit brought by shareholders against RMS Titanic Inc. and current management. The trial was supposed to get started in Norfolk federal court next week, until a federal judge postponed it. A hearing will be conducted Jan. 29.
"We have to rid ourselves of a management team that has done nothing in our best interests as a company ever since they illegally took over the company," said Shuttle, who is working with the plaintiffs in the case.
RMS Titanic officials, including chief executive officer Arnie Geller, referred calls to attorney Robert McFarland of McGuire Woods' Norfolk office.
"We have addressed all of those contentions, and we believe the evidence absolutely refutes those charges," McFarland said. "There was no cutting into the hull after the court order. There are no exorbitant salaries. They are being paid very close to what the former management was paid."
The hostile takeover, he added, was legal in every respect.
The shareholders say the current management team is mostly to blame for the company's stock woes. The stock closed Friday at 33 cents a share, down from more than $3 a few years ago. The company, which has eight employees, made only $800,000 in profit in fiscal 2003. That's up from a loss in 2001 but down from a $5 million profit in 1999.
The RMS Titanic Inc. salvage company first laid claim to the site in 1987, when it brought 1,500 artifacts to shore in Norfolk. In 1994, the Norfolk court declared RMS Titanic the official salvager for the wreck.
The company has since held several salvage operations, collecting about 6,000 artifacts, less than a tenth of the total number in the debris field. Three men at a time plunge to the Titanic wreckage in a French-owned submersible and lift the items to the surface using robotic equipment.
In 1999, Ohio resident Joe Marsh, the company's largest shareholder who invested more than $5 million into RMS Titanic, was unhappy with the way things were being done. He owns about 19 percent of the company, which together with other shareholders was enough to wrest control from the former managers.
But the team he helped install has done little to improve the company's fortunes, shareholders say.
The company makes its money by leasing its artifacts out to traveling shows, sponsored by media giant Clear Channel. That's the source of the $800,000 in profit in 2003. But other, bigger plans - including selling artifacts to various museums around the world, but not as one collection - were prohibited by the federal courts, which ruled that the company does not own the artifacts and can't sell them to whomever it wants.
The Norfolk court would likely approve a sale of the artifacts to an accredited museum as one unified set of artifacts. But a deal to sell it to The Mariners' Museum in Newport News was stymied a year ago when a judge observed in part that it didn't give enough return on investment to the shareholders.
Peter Dujardin can be reached at 247-4749 or by e-mail at [email protected]
