Reeves v OneWorld: The outcome

The Seattle United States Federal District Court have made their ruling

Thursday September 26th 2002, Author: Bob Ratcliffe, Location: United States
The United States Federal District Court in Seattle ruled today in favor of OneWorld Challenge LLC, Challenger for the 2003 America's Cup, in its case against their former attorney, rules advisor, and operations manager, Sean St. Leger Reeves. The Court ruled that there was absolutely no question of fact as to whether Reeves had wrongfully breached his obligations to OneWorld by retaining and disclosing OneWorld's confidential information.

The case, which was scheduled to go to trial in the April of 2003 was decided summarily without the need for a trial, and Judge Barbara Rothstein found that "Reeves did in fact disclose information that was confidential thus breaching the terms of the Confidentiality Agreement without justification or excuse."

The Court also rejected Reeves argument with respect to the enforceability of the liquidated damages provision in his contract and reinforced its previous ruling that the provision was reasonable and enforceable and that OneWorld was entitled to liquidated damages and to its attorneys fees. The exact amount of the liquidated damages remains to be determined but the Court indicated that the amount should be between $240,000 and $314,000 USD. Legal fees will amount to approximately $500,000 USD.

"The truth has prevailed and it is great to have this chapter of the OneWorld story behind us," said Gary Wright, OneWorld CEO. "I can now dedicate 100% of my personal attention to getting behind this great team of sailors as they go out and race on the Hauraki Gulf. I am proud of the team of people assembled here, they are consummate professionals and I am forever grateful to all of them for standing behind us as we wrestled with all of the difficult issues raised by Reeves' false and malicious allegations."

Although the Court did not have the testimony before it when it reached its decision, the ruling comes on the heels of deposition testimony last week by Reeves' own expert confirming that OneWorld's design package was not a copy of or even similar to previous Team New Zealand yacht designs. Reeves provided OneWorld's stolen design package to his design expert, Robert Perry, along with the lines plans for Team New Zealand's 2000 winning yachts. After making his comparison of the plans, designer Robert Perry testified, "it became quite obvious that we're looking at very different boats."

"That should put to rest once and for all that Laurie Davidson did not provide OneWorld with work that he had done for Team New Zealand in the previous America's Cup," said Gary Wright.

OneWorld's motion to hold Reeves in contempt of court for his repeated abuses of the Court's orders and procedures remains to be determined - as does the issue of whether Reeves will be prosecuted criminally for perjury and other violations of US federal law. The Court, did, however, impose a permanent injunction against Reeves requiring him to return all OneWorld confidential information and preventing him from making any further disclosures. A violation of the injunction could expose Reeves to additional sanctions and findings of contempt.

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