Bloomberg: Seized Russian superyacht faces sale over "excessive" upkeep

The US asked a judge for permission to sell a $300 million superyacht that allegedly belongs to Russian billionaire Suleiman Kerimov and was seized under sanctions imposed in the wake of the war in Ukraine.

The 348-foot (106-meter) Amadea was seized in Fiji in April 2022 at the request of the US government, which has been paying $600,000 a month since for upkeep, Bloomberg reports.

That monthly tab includes $360,000 to pay the crew, $75,000 for fuel and $165,000 for maintenance, waste removal, food and other expenses, the US said in court papers filed on February 9 in Manhattan. The costs are “far from modest” and the public shouldn’t have to pay them while a court considers whether to order forfeiture of the vessel, according to the government.

The dispute is the result of a Justice Department task force targeting assets, including yachts, planes and luxury real estate of wealthy Russians who have been sanctioned in connection with the war in Ukraine. The US hopes that by seizing the property of Russian leaders and the wealthy people around them, it can influence their behaviour, or at least punish them for backing the war.

One issue the court will have to work out is who actually owns the lavishly appointed boat.

The US says Kerimov is the owner, and claims he violated sanctions by making payments that went to US companies or passed through the US financial system. But Eduard Khudainatov, the former head of Russian oil producer Rosneft, says that he’s the actual owner of the boat.

Lawyers for Khudainatov, who hasn’t been sanctioned by the US, said in a statement that their client would reimburse the US for the cost of maintaining the Amadea — which already totals about $20 million — if it is returned to him. The lawyers called the seizure “unlawful.”

The US claims Kerimov used a series of shell company transactions to hide his ownership, but is the Amadea’s “beneficial owner,” meaning he exercises control and enjoys the rights of an owner.

While the US rejects Khudainatov’s claim, it says that he should pay for the maintenance while the forfeiture fight drags on. Because Khudainatov isn’t paying, the government says it’s entitled to sell the Amadea to end the “excessive” cost.

Amadea, which features six decks and a helipad, has spent months docked in US custody, after it was sailed from Fiji to Honolulu and on to San Diego. Fijian authorities seized the boat at the request of the US.

Kerimov, 57, is worth $9.1 billion, according to the Bloomberg Billionaires Index. He built his wealth by making major bets on Russian companies across a variety of industries after the fall of the Soviet Union.

In addition to the monthly payments, the Justice Department said it is paying a $1.7 million annual insurance bill this month. And Amadea is scheduled to go into dry dock for repairs in March, at a cost of $5.6 million, according to the US. The $600,000 per month will be suspended during dry dock.

The case is US v. M/Y Amadea, 23-cv-09304, US District Court, Southern District of New York (Manhattan).