Cup Committee Ordered to Pay $178,898 Debt

Superior Court Judge Wayne L. Peterson on Monday ordered the cash-strapped America’s Cup Organizing Committee to pay $176,898 to a disgruntled supplier, throwing into doubt the organization’s ability to continue managing the sailboat races now in progress.

ACOC is “taking steps to satisfy” the writ, said ACOC spokeswoman Jane Eagleson. “ACOC continues the business of managing and conducting the 28th defense of the America’s Cup.”

“We do not want to shut down the races,” said Charles Harris, E. J. Helicopter’s San Diego-based attorney. “But we’ve got a signed order that gives them 48 hours to come up with cash . . . and that order also allows us to have the U.S. Marshals seize (ACOC) assets valued at $176,898.”

“We’ll be doing something on Wednesday,” Harris said. “By that time we’ll have a good handle on what (assets) they’ve got.”

Peterson on Monday granted E. J. Helicopters a “writ of attachment” against ACOC in the amount of $176,898. The writ was granted after a court-approved arbitrator ruled that ACOC owed E. J. Helicopters $176,898. The company, which had been contracted to provide helicopter services to ACOC during the races, originally had sought $310,000.

“Since the time we made our first claim in November, they have yet to offer us a dime,” Harris said. “They’ve stalled us and put us off; they’ve told us they don’t owe us. But the handwriting’s on the wall, the court says they owe it.”

In a related development, ACOC officials Monday said that Warren Pateman, an Australian who has been operating a for-profit travel agency for the America’s Cup Organizing Committee, was arrested earlier this month by Immigration and Naturalization Service agents and charged with failing to secure a proper U.S. work permit.

Pateman, who subsequently was released on his own recognizance, has been prohibited from playing an active role in the day-to-day management of any U.S.-based company, including the America’s Cup Services Travel Desk, INS spokesman Rudy Murillo said Monday.

Pateman will be allowed to remain in the United States provided he “doesn’t violate the terms of his visa and as long as he leaves when his visa expires on May 26,” Murillo said.

Earlier this year, Pateman’s for-profit travel agency sparked protests from some members of the tourism industry who felt that Pateman was steering business toward companies in which he had a financial interest. Pateman at the time defended his operation and denied any improper activities.

Cup committee officials said Monday that the Travel Desk’s ability to serve clients would not be impaired by Pateman’s legal difficulties.

“As far as we’re concerned, the business is running as it was licensed to do,” Eagleson said. “Indeed it is providing services that were licensed. Warren’s situation has not affected its ability to provide day-to-day services.

Although INS rules prohibit Pateman from taking an active role in managing the company, the Australian is allowed to retain an ownership stake in the company that he helped to create to provide Cup-related travel services. And, he is allowed to earn “passive” income generated by the company, Murillo said.

Pateman, who was not available for comment Monday, earlier told the San Diego Business Journal that he was sorry for any “embarrassment” that his arrest might cause the ACOC. Pateman also reportedly linked the arrest to a mistake on his part.

But Murillo said that INS records indicate that Pateman “knew what he was doing. . . . It almost looks like he intended” to stay in the country and run a company on his limited, six-month visa.

Pateman, who arrived in the United States last May, extended his visa “just days” before it was to expire, Murillo said. “And, he had it extended for six months, so it expires just days after the races end,” Murillo said.

Murillo described Pateman’s visa difficulties as a “clear-cut” violation. “The visa prohibits hands-on supervision of employees, which he was doing, and the generation or earning of income . . . which he was doing,” Murillo said.

Before establishing the travel business, Pateman had served as marketing director for America’s Cup Services, the ACOC’s for-profit marketing arm. Last year, ACS licensed the travel desk to Pateman’s for-profit company after the organization was hit by a severe cash shortfall.

Eagleson also said that Jay Belbey, the Cup committee’s business affairs director, had resigned from the organization effective April 7. Belbey’s duties are being assumed by three other top Cup committee executives, Eagleson said. Belbey was not available for comment on Monday.