A Russian oligarch’s luxury superyacht could be snapped up for a fraction of its £240m value.
The US seized the Amadea in 2022 after American authorities said it belonged to sanctioned Russian billionaire Suleiman Kerimov.
He denies that and fellow Russian businessman Eduard Khudainatov, who is not sanctioned, insists he is the owner.
Khudainatov has filed multiple legal claims seeking to reclaim the yacht, which boasts eight cabins, a VIP stateroom and a helipad.
None have been successful, and with its upkeep bills estimated at £450,000-a-month, US authorities are reportedly keen to get rid of the 106-metre boat.
It is currently being sold in a sealed bid auction that closes on Wednesday.
Ahead of its sale, Paul Stephan, a law professor at the University of Virginia, branded the boat a ‘floating lawsuit’ and said it may attract entrepreneurs looking for a deal.
‘Some entrepreneur with an appetite for risk might find a price that makes the gamble worthwhile,’ he added.
The risk in buying it lies in the fact that should the boat move outside the US, local courts may recognise Khudainatov’s ownership claim and return it to him.
His legal team is continuing to fight the case and has vowed to try and regain ownership of it through foreign courts if necessary.
Mr Stephan said the ‘principal legal risk’ would be if other jurisdictions recognise the US court judgment.
This is because foreign courts will accept the judgement ‘if it aligns with their values, assessment of facts, etc., but not otherwise,’ he added.
He explained: ‘A creative lawyer could come up with arguments that might succeed even in a strong rule-of-law jurisdiction such as the UK: (1) does US civil forfeiture procedure satisfy standards of fair process? (2) did the US court deny the nominal owner his day in court? (3) are the US sanctions against public policy?
‘Countries that are not inclined to accept the US sanctioning regime and have less independent courts might be even more inclined to reject the US judgment. Good luck sailing into Hong Kong or Macao, for example.
‘In each instance, it would add risk to the transaction and at least make it more expensive, if not unattainable.’
And even if the boat is never seized, any new owner will be ‘deterred from sailing anywhere, or allowing the boat to travel to, where a threat of a legal dispute over title exists’, he said.
Publicity surrounding its ownership may also lead to additional scrutiny on its new buyer, even if it is bought through proxy, he added.
Adam Ford, Khudainatov’s lawyer, also claimed that the yacht will not attract a ‘fair market price’.
This is ‘because ownership can, and will, be challenged in courts outside the United States, exposing purchasers to years of costly, uncertain litigation’, he added.
In a statement, Mr Ford of the law firm Ford, O’Brien Landy, said: ‘We are aware that the United States plans to auction the M/Y Amadea – property that lawfully belongs to Mr Khudainatov. The sale is improper and premature; we retain title and are actively appealing the forfeiture ruling.
‘If our appeal succeeds, the government must repay the vessel’s full value. We doubt it will attract any rational buyer at fair market price, because ownership can, and will, be challenged in courts outside the United States, exposing purchasers to years of costly, uncertain litigation.
‘Recent judgments in European and Caribbean courts have already penalised buyers who acquired assets through illegitimate seizures, including Russian-owned superyachts. Prospective bidders should study those precedents carefully.
‘Should the government press ahead simply to staunch the mounting costs it is imposing on the American taxpayer, we will pursue the sale proceeds, and any shortfall from fair market value, once we prevail in court.’
Bidders must place £7.45m in escrow and prove a net worth of at least £370m to qualify for the auction, according to the website.
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