Lawsuit alleges America's Cup organizers unfairly rejected African American sailing team and breached trustee duties by self-dealing
The latest America's Cup controversy arose with a complaint filed in state court in New York City on Dec. 12, alleging that the Golden Gate Yacht Club (GGYC), defender of the coveted sailing trophy and orchestrator of the prestigious international regatta in San Francisco, unfairly rejected an African American sailing team's bid to compete as a defender candidate.
In a move that piqued the interest of close observers in the sailing world, the suit also takes things a step farther by challenging the legitimacy of including lucrative waterfront development deals into GGYC's December 2010 agreement to host the 34th America's Cup in San Francisco.
The suit invokes a 159-year-old document, the America's Cup Deed of Gift, drafted after the schooner America won the treasured Cup — affectionately known as the Auld Mug — in a match off the coast of England in 1851. Executed under the laws of New York since the schooner sailed under the New York Yacht Club, the deed establishes the America's Cup trust, and sets out guidelines that every recipient of the cup must abide by. The suit holds that accepting the cup made GGYC a trustee under the deed, and "each club holds the Cup as 'trustee for the benefit of all potential challengers.'"
Because GGYC set up its own America's Cup Event Authority, which stands to profit from San Francisco real-estate development deals without sharing surplus revenue among competitors, the lawsuit charges that the yacht club violated its fiduciary duties as trustee.
"It is clear that GGYC is strictly forbidden from using its possession of the Cup and its attendant duties as trustee ... in a manner that directly benefits itself, any of its members, or any third party," asserts the complaint, filed by Madison Avenue law firm McDermott Will & Emery LLP. "The law strictly prohibits self-dealing by a trustee."
BLACK SAILING CREW
The lawsuit was filed on behalf of African Dispora Maritime (ADM), a North Carolina nonprofit organization founded by sea captain Charles Kithcart, who developed his skills as a mariner under former America's Cup sailors and continues to pursue an ambitious dream.
Kithcart says he's convened a sailing team to compete in the America's Cup that includes African American Olympian sailors, and held discussions with a prominent Rhode Island yacht designer, David Pedrick, about constructing a qualifying vessel for his team. Pedrick, who's designed America's Cup racing yachts before, confirmed to the Guardian that he was willing to work with ADM.
GGYC accepted and later refunded ADM's $25,000 application fee, but rejected the nonprofit's proposal to enter the race, saying it wasn't satisfied Kithcart's team would have the necessary resources to compete. Kithcart claims to have a fundraising strategy for his America's Cup bid ready to go, but his anticipated support appears to hinge upon being accepted as an America's Cup competitor.
"You create a groundswell with the public," he said. "This is the essence of our organization: It's going to excite people's imagination. Money can be generated, and there are people who will fund things."
Kithcart's vision extends beyond just racing in the elitist tournament, since that alone "doesn't fulfill any of the social needs that are not only apparent, but glaring."
ADM's mission, he explained, is to train African American youth as competitive sailors, cultivate youth interest in math and science as it applies to nautical skills, and make a splash on the world stage by breaking into a predominantly white sport with a black-led team, á la the Jamaican bobsledders from the film Cool Runnings.
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