Wednesday, February 4, 2009

What's in YOUR 401(k)?

This year's C-PORT convention is over. It was fairly well attended, although it seemed to me like too many yellow shirts dashed for the doors at the conclusion of their conference on Friday, just as C-PORT was getting started. In this photo, John Aydelotte uses his new spyglass to scan the hallways for wayward TowBees. ARRGH!

There are a few things that came up during the conference that I am compelled to comment on - especially the touchy subject that was on the agenda for Sunday morning: Salvage. I commend Terry Hill and the conference organizers for once again scheduling a topic that historically has potential to deteriorate from discussion to food fight. (I ducked some rotten apples myself a few years ago...)

The salvage panel included Mr. Doug Wager, a surveyor and insurance adjuster with many years of experience. During his closing remarks, he suggested that marine salvors perhaps expect too much for their work. He said "Too many salvors expect to retire off of one job," and he indicated that those kinds of invoices were unacceptable from his point of view (and, by association, from the insurance industry's point of view). The context of this remark was within his comments about ethics and our choice of the marine assistance industry to make our living. (Program note: nary a doughnut was tossed, not even a cracker!)

Now, I infer from these comments that Mr. Wager feels that a proper, i.e ethical salvage award would not be enough money for a guy to actually retire on. To this sentiment I have two words: Cherry Valley.

Skip Strong was the captain of the Cherry Valley, and his masterful seamanship saved a space shuttle fuel tank (and the tug that was towing it) from certain destruction. Indeed, he was so skilled that there was virtually no damage to any of the vessels involved. The story of this salvage is widely regarded as perhaps the penultimate example of a pure salvage in admiralty law, and the final figure of $4.7 million is probably the highest dollar amount ever awarded in any salvage case. The 25 crew members of the Cherry Valley shared $1,752,642 between them, in differing portions. Keystone, the company that owns the Cherry Valley, got the other $3 million. Captain Strong personally received about $287,000 for his share. The job took 2 days.

On the final page of his book, Captain Strong writes: "My wife Annie and I could now start to look for a house in earnest." Strong didn't retire, but his award made it possible for him to resign as a ship's captain, buy a house and he now works as a harbor pilot in Maine.

Does Mr. Wager thinks Captain Strong is a greedy pirate who was able to purchase a house with ill gotten gains? I don't know, but based on his comments to the C-PORT members, I have to wonder if he would object to the Cherry Valley award - 12.5% of salved value, a percentage that is quite common in our recreational salvage cases.

The story of Captain Strong's efforts to save a tug and her barge is one of skill, courage and extraordinary seamanship, and the salvage award that prevailed was argued, appealed and litigated at the highest levels of our courts. The case of the Cherry Valley is a modern affirmation of the concepts behind Blackwall and SalCon89. I don't see anything in there about retirement.