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COURT INJUNCTION HALTS SOTHEBY'S AUCTION OF GOLD RUSH TREASURE
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(December 9,1999) Potential bidders in New York were shocked on the afternoon of December 7th when the injunction against the auction was announced. Gold treasures in the sale had toured the country, catalogs had been distributed, bidders were gathered
(December 9,1999) An injunction against the sale was issued last week by the 4th U.S. Circuit Court of Appeals in Virginia preventing the actual sale of this, the insurors' share of the S. S. Central America's gold treasure. The New York Times website on December 8th quoted David Redden, an executive VP of Sotheby's, "We were notified this evening that discussions had broken down and that the sale had to be canceled."

The discussions he referred to were between the putative owners of this portion of the treasure, the insurors who had been granted some 8% of the entire salvaged gold after years of wrangling in the courts - in discussion, presumably, with Central America Discovery Group, Tommy Thompson's organization which successfully raised this fantastic Gold Rush-era treasure from its watery grave 8,000 below the surface of the Atlantic, off the coast of Carolina.

Our archives have brought you some of this fantastic story, and in August we wrote that this sale was to happen in December. Little did we know that the squabbling over this 3-ton gold treasure would continue on, and since the court records are sealed by consent of both parties, we're not likely to know the whole story for quite a while.

John Dannreuther, a noted scholar in the field of California territorial gold issues, traveled to New York for this auction, and spent the day of Dec. 7th examining the coins and gold bars. That evening he found out that the auction he was planning on attending the next afternoon had been canceled.

"It is frustrating to finally see all the bars and coins up close, and get pumped up for the auction, and then hear that the sale is off. I was ready to bid, for myself and for others, and I was left at the altar," said Dannreuther.

Suffice it to say that the (caution: our euphemisms ahead) "secretive, energetic, and ever-vigilant" Tommy Thompson found something not to his liking about this sale of treasures, granted by court order to the insurors group, and he found a judge willing to postpone this long-awaited sale.

Now, let's think for a minute about what it takes to put on an auction. A company of long and strong reputation such as Sotheby's announces an auction event in good faith, schedules the facilities, cataloging, and publicity for the sale. In this case, a beautiful color catalogue was produced, with photos and much historic research, and detailed descriptions of the lots of gold nuggets, and 1850's-era gold coins and bullion bars.

Also in this case, the material toured the U.S. and London amidst much fanfare, as a treasure of this size from the California Gold Rush era has never been seen before. Articles appeared in at least three national publications that we saw in the few days before the sale. Hundred of collectors and interested parties traveled from all over to New York in the past few days to see the material and bid on the lots. Hundreds of other potential bidders and buyers were represented by proxy and mail bids.

"There were at least 400 people at the cocktail party which Sotheby's put on. Think of all the money Sotheby's spent, and time and expense people went through to be there," Dannreuther said from his office in Memphis, Tennessee, this morning.

There's no doubt that every buyer with a serious interest in this field was either in New York, or was represented by agents ready to bid on their behalf. Lots had been displayed and examined at Sotheby's New York showrooms, and less than 24 hours before the first lot was to be called, the injunction was announced, the sale was off.

If Thompson's intent was to anger every serious collector of Gold Rush material, he couldn't have done a better job.

Despite Thompson's obvious intelligence, and his proven engineering prowess, he has consistently proven clueless in the field of public relations. As we have stated before, it's no easy thing to bring such a large and significant historic holding to market, artfully and skillfully, in a way that enlarges rather than floods that market. And time and again, Thompson seems to work against his own best interests. In seeking to control everything, he has let what was once a fascinating story about a historic treasure, degenerate into a litigious farce about money, secrecy, and paranoia.

As for the original investors, the CADG folks who supported Thompson with their $millions back in 1985 when the treasure hunt began? Still, they have yet to see a dime.

But one day the surviving members of that original group will come to their senses. They will realize that a successful wildcatter in the oil fields, once he's struck a gusher, should not be your first choice as director of marketing.


 

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