Salvor Wins Title to Shipwreck Gold

In this in rem action filed by Recov­ery Limited Partnership in this long­standing contest over salvage rights to the gold-laden wreck of the S.S. Cen­tral America, which sank off the coast of South Carolina in 1857, the Norfolk U.S. District Court grants RLP a sal­vage award of 100 percent of the fair market value of the items recovered in RLP’s 2014 recovery operations, but denies prejudgment interest; the court also grants RLP title to the ar­tifacts recovered in the 2014 salvage operations, as the salvage award can only be satisfied by the a conveyance of title.

Salvage award

There is no doubt that RLP has es­tablished the three threshold require­ments for a salvage award: a marine peril, voluntary rendering of the sal­vor’s services and success of the sal­vage efforts. RLP’s efforts have been successful in recovering approximate­ly 16,000 artifacts from the wreck site in an archaeologically sensitive man­ner.

The court must make a rough ap­proximation of the value of the sal­vaged property. In assessing the re­liability of the appraisals, the court notes the significant experience of the appraisers, who testified in detail at the evidentiary hearing about their processes and conclusions. The court considers their valuation methods to be sound and reliable, while recogniz­ing the difficulty associated with valu­ing the recovered items and the fluc­tuating market not only for gold and silver, but for the artifacts. The court finds $48,215,425 to be an appropriate approximation of the fair market val­ue of all the items – gold and artifacts – recovered during RLP’s 2014 salvage operations.

The court further finds that RLP’s data collection, preservation and con­servation efforts with regard to the wreck of the S.S. Central America, and the items salved, weigh strong­ly in RLP’s favor in determining the salvage award. The court finds RLP is entitled to a salvage award of 100 percent of the fair market value of the items recovered in the 2014 oper­ations.

Title award

A judicial sale would be inadequate to fully reward RLP for its salvage ef­forts. The appraised fair market val­ues accepted by this court assumed these rare items would be marketed to appropriate buyers, through experi­enced auction houses and numismatic dealers, and that the historic prove­nance of the items would be promoted. The separate categories of artifacts and gold appeal to different audienc­es that do not necessarily overlap, and the court agrees that the items need to be marketed individually. The U.S. Marshal is simply not properly equipped with the necessary resourc­es and expertise to perform the nec­essary pre-sale processes. RLP and its team of experts are experienced with the conservation and marketing efforts required, and understand the appropriate sales channels for the ar­tifacts and gold. Given the addition­al curation, grading and marketing necessary to obtain the fair market value of the salvaged items, the court finds that a judicial sale would be in­adequate to pay RLP its full salvage award.

The court grants RLP title to the items salvaged in the 2014 recovery operations, as listed in the inventories filed with the court.

Recovery Ltd. Partnership v. The Wrecked & Abandoned Vessel S.S. Cen­tral America (Smith) No. 2:87cv363, Aug. 31, 2016; USDC at Norfolk, Va.; James L. Chapman IV for plaintiff. VLW 016-3-419, 33 pp.