Investors Want to Sink Columbus Exploration Bankruptcy ...

By Patrick Fitzgerald

A pair of investors who sunk $1.5 million into treasure hunter Tommy Thompson?s bid to salvage tons of gold and silver from a wrecked steamship off the Carolina coast want a judge to toss a bankruptcy case filed last month against the explorer?s company, Columbus Exploration.

The investors claim the involuntary bankruptcy filing is nothing more than a sham, the ?creditors? having filed a petition ?as part of an orchestrated effort? with Thompson to avoid the appointment of a state receiver for the company and an affiliate.

The investors?former Ohio Co. President Donald Fanta and the company that owns the Columbus Dispatch newspaper?say the creditors are ?closely aligned? with Thompson and filed the bankruptcy petition in ?bad faith.? They want Judge Peter Walsh of the U.S. Bankruptcy Court in Wilmington, Del., to dismiss the case.

One of those creditors, Columbus lawyer Richard Robol, rejected the investors? claims.

?This is just one more frivolous motion by the two lone members who have done so much to hurt the company,? Robol said in an emailed statement. ?The overwhelming majority of members have rejected such personal vendettas and attacks on the company. The creditors look forward to presenting the evidence to the Delaware Court and will consult with their counsel about obtaining sanctions against the Dispatch and Mr. Fanta.?

Robol, who claims Columbus Exploration owes him more than $2 million for legal work, has a long history with Thompson, representing his companies since the 1980s, according to the investors.

Indeed, this isn?t even the company?s first trip to bankruptcy court. Columbus Exploration filed for Chapter 7 in March 2012. The Dispatch claimed the 2012 bankruptcy was also merely an effort to delay the Ohio litigation, and the case was dismissed in May.

The bankruptcy is simply the latest litigation involving Thompson, an engineer and undersea explorer who in the 1980s found the wreck of the SS Central America, a U.S. mail steamer that went down off the North Carolina coast in 1857 with 18 tons of gold.

By 1990, Thompson had recovered more than three tons of gold, silver and other treasures, estimated to be worth at least $100 million. He later sold some of the gold to a Californian mint for $52 million. He?s been fighting with investors and former employees ever since. The Dispatch has a rundown of the saga?here.

Thompson disappeared six months ago. An Ohio judge has issued an order for his arrest.

Judge Walsh scheduled a hearing for April 24 to consider the investors? bid to dismiss the case.

Write to Patrick Fitzgerald at patrick.fitzgerald@dowjones.com.

Source: http://blogs.wsj.com/bankruptcy/2013/03/18/investors-want-to-sink-columbus-exploration-bankruptcy/

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