RMS Titanic Inc News

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Trent Pheifer

Hey everyone,

I received this article Mary Ann Whitley today.Artifacts Donation Very interesting, from a quick read through, it looks like a pretty good idea. I have never been Mariners' Museum in Newport News, but I have heard great things about it, seems as thought they would be in good hands. The process all seems very complicated! What are your thought on the subject?

Its a bit of a catch 22 here....If these artifacts are given to the VA museum, Gellar profits , RMSTI shareholders get burned, big time....

If the artifacts stay on the road, they suffer wear and tear, but the shareholders may still someday make some sort of return on their investment if Gellar is deposed, and Gellar may face justice for his crimes.........

What will be in the best interest of the artifacts? Strip away the politics and infighting, how will these artifacts be best served?

What do you all think?

I really dont know the answer at this point, seems every plan has a bad consequence or alterior motive...

I just hope if I have kids, and they have kids, the artifacts will be in a museum where they can be viewed and appreciated, and not collecting dust in the attic of a desendant of someone who bought an artifact at auction....

I dont know what the endgame will be- I want it all in a museum but when, where, and donated-or sold-by whom are the big questions....

Tarn Stephanos
This indeed is a tricky situation. Since I am not aware of half of the behind the scenes details, it is a hard call to make. It would be marvelous to see them housed all together, but I say that not as a shareholder, who stands to lose quite a lot.
IMHO it would be nice if they went into negotiations to take the exhibit and let it tour for the 5-10 years, placing the profit into a trust fund to be distributed to the shareholders at the end of the duration. Then the museum would be able to take it without any strings or possible hard feelings attached to it.
We'll see.....

Gavin Murphy

I am no expert in salvage law, and even less US law in general, but something has bothered me from a legal standpoint. In the event RMST applies for a salvage award and is granted same by the Norfolk court, who pays? I suppose one way would be for a third party to buy its lien, as it were, because WSL and any successor (i.e. insurance co. with subrogated rights) has abandoned any title to ownership in the vessel and therefore will not/cannot pay. If this is true, just as well it is a salvage matter and not a finders case. Otherwise, RMST may actually have been granted absolute title to the artifacts, much to the chagrin of many on this board.



Dave Shuttle

Your discussion all borders right around the main issues. Some are legal in nature as Gavin has inferred and some are monetary in nature as Tarn has inferred.

First the artifacts need a permanent home. Almost everyone agrees with that stance. RMST has been the custodian and has, with varying degrees of success through the years, maintained the collection under supervision of the Norfolk Court. Now it's time to find a permanent home for Titanic's artifacts and the Newport News Mariner's Museum (NNMM) announcement has brought positive feedback from all sources as a sound program and good facility to house the artifacts forever more.

Now the question becomes: How does all this work? Well the Richmond Appellate Court laid down the briefest of guidelines last April when they declared that RMST did not own the artifacts, but that RMST was entitled to a salvage lien against the artifacts that could be exercised at some future time either when RMST's role of salvor came to an end, or during the continuing salvage process in a series of payemnts over time. The latter seems extremely complicated. The first option will likely receive RMST's total attention.

So how will the business of all this transpire? RMST has twice applied for approval of a proxy statement to hold a shareholder meeting to relinquish salvage rights. The SEC has twice held up approval of the language of the proposed proxy form. The Norfolk Court has eluded to RMST that such a shareholder vote is needed before motion can be made to relinquish and that approach seems correct because the Court does not want to act against the will of the shareholders of RMST. But as of now that avenue seems to be at an impass.

RMST now announces a plan to transfer the artifacts to NNMM in return for tax credits and to relinquish salvor status to the US governement for additional tax credits. The problem is that how can tax credits be utilized when a company is already declaring huge losses and has no profit against which to utilize tax credits? This plan cannot work as it has been outlined.

What is needed for this plan to work is for some corporate entity like a General Motors or General Electric or Microsoft to "donate a sum of money" say $100 million (to correspond to the value of the artifacts) to NNMM so that NNMM can purchase the arttifacts. Then governmental tax credit of perhaps $150 million is given to the corporate entity as thanks for their philanthropic effort. The shareholders of RMST get the $100 million to be divided as a distribution per share for their long term investment efforts, NNMM gets the artifacts, the corporate entity gets the tax credits and lots of good PR for their actions.The Norfolk Court satisfys the salvage lien from the monies generated to purchase the artifacts. The Court retains jurisdiction over the wreck site and can appoint a salvor as needed. The proposed NOAA guidelines prohibit further salvage unless in conjunction with the Court. Everyone is happy.
Mr. Shuttle:

First, thank you for your informative post. I only wish your contributions were not so infrequent...;-) Afterall, your say in this anti/pro mixed relation is one of great importance. Owing to your personal connection.

I stand intrigued with your mentioned, $100 million appraisal of said TITANIC artefacts.
Now, having realized the great expense at not only salvaging (100K per dive or as Mr. Tulloch noted, "...five dollars a second") but also conserving these precious few *five per-cent* of TITANIC's wreck...

...I ask then who is responsible for such denotion of a monetary value?

How do you place value on
the only item retrieved from the most celebrated tragedy in history, that bears such a papable and significant bond? I am speaking of the restaurant check.

You can look at and touch these other silent witnesses and supported with the public noterity that they have attained, conclude that they are from TITANIC.

The restaurant check in itself tells you it is from TITANIC and bears the likeness of it's association with tragedy. One that, if it were an only artifact representing this tragedy,
could exemplify all that it was.

Where do you begin to determine a monetary value on this *only known* example in the entire world?

Michael A. Cundiff

Dave Shuttle

Artifact valuation

Hi Michael,

When I used the $100 million valuation figure in the previous post, I meant that figure only for purpose of example. I have no idea of the value of the entire collection. Attempts have been made to value the collection for insurance purposes. I even spoke with an appraiser hired by RMST following the Chicago artifact theft of the diary initially thought to belong to Howard Irwin. But I'm not sure a true appraised value exists for the entire collection. Also, does that value change with intent? Certainly an insurance valuation might be different than appraisals attempting to estimate sales value for the recovered artifacts. Then one must consider auction value when a hatband commanded $53,000 US at the Aldredge auction in Southampton at the BTS convention last week. So no real accepted value exists that I am aware of.

Now comes a proposal to place the artifacts in Newport News. And along with that comes the possibility of a salvage lien against the artifacts. How will the Norfolk Court decide on a value of the collection when addressing these matters? How would the US government decide on proper tax credit as proposed by the RMST plan? There are so many unanswered questions and parties involved will invariably dispute money figured for sometime to come as is natural when positioning within a business dealing. Some artifacts are priceless in the eyes of history because they are irreplaceable such as the cherub that has been recovered. Others are quite common and would attract much less value such as the wealth of dinnerware that has been recovered and much more remains to be possibly recovered.

Again, my figure was merely meant to arbitrarily set an example for the purpose of discussion of the Newport News business deal. Real values may vary from that figure by great amounts in real life.

Gavin Murphy


Thanx for this post. But one thing should be kept in mind, even in an "example". I think it unlikely that the gov't would give a tax credit greater than the value of the artifacts. Surely the taxpayers of America would have a problem with this.

As I have said before, you may not be a lawyer, but you sure fool me. Maybe you should........
For all of you following the exploits of the company, they filed an SEC filing today. The third paragraph states:

"While both the potential donation of the Company's salvor-in-possession status and the potential donation of the Company's artifact collection are at an early stage of development, the Company's Board of Directors endorses both donation initiatives. Prior to the April 14, 2003 hearing, the Board of Directors unanimously agreed to revoke, rescind and void the Board's prior resolution regarding the unilateral relinquishment of the Company's salvor-in-possession status. "

SO RMSTI isn't giving up salvor status after all.

It's as we figured.

Gavin Murphy


Help me here. Correct me if I am wrong. RMSTI may not give up its salvage rights, but it MAY lose them by not protecting the wreck, not taking salvaging action on a regular basis (it has now been 3 yrs.) and general acquiescence.

If so, then are these alleged salvaging operations really illegal per se?

Yes. Until the court announces that RMSTI is no longer the salvor in possession, the wreck is still the company's to salvage and protect.

Understand the big scenario. The company, for three years has new management, and that management has butted heads (my words) with the court over many issues. At the same time, an SEC investigation is underway to determine if that change in management was legitimate. And now a shareholder derivative in the same courtroom challenges decisions of this management in a very strong way.

The court has recognized the rights of the shareholders on more than one occassion. It is my belief that the Judges may recognize that no major changes in company status should be made until the allegations have been heard and the management is found innocent or guilty of the allegations.

But legally, as stated in the November hearing, the court assigns the rights and they haven't removed the rights nor the responsiblities from RMSTI.


Gavin Murphy

Thanx for this Bill. You say "And now a shareholder derivative in the same courtroom challenges decisions of this management in a very strong way."

In company law in Canada and UK, shareholders have an oppression remedy from alleged bad managment decisions.

What is the difference? Or is it simply semantics? Trust me, I know nothing of US law.

I think the ideas of the Canadian rememdy are similar to the US derivative idea. I by no means am an attorney, so don't take this as a legal analysis. In the US, from what I've read and been told, the shareholders can effectively sue the company on behalf of the company. The part I find most appealing is that any proceeds won by a derivative suit go back into the company funds. The litigant receives no direct benefit (no $$) from the suit. If his company does well, he and all the shareholders then benefit.
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