Russian Oligarch’s Yacht Is Costing $1 Million a Month; Here’s Why US Is Struggling To Sell It
Eduard Khudainatov, one of Russia's oligarchs and the former CEO of Russia's state-owned oil company Rosneft, is hardly in the news. However, that changed when the US authorities identified him as the proxy owner of two mega-yachts -- the 459-foot Scheherazade, and the 348-foot Amadea.
The battle over the 348-foot Amadea began in April 2022 when the Department of Justice found that the mega-yacht was actually owned by sanctioned Russian gold mogul Suleiman Kerimov, and said that Khudainatov acted as a "clean, unsanctioned straw owner." Amadea was later seized by the US authorities from the Russian oligarch in Fiji.
Khudainatov appeared to own the ships on paper and concealed the true owners -- President Putin and Kerimov. The government mentioned that his disguised ownership of Amadea was made possible through shell companies and other owners.
Now, the U.S. Department of Justice is seeking permission to sell the $230 million yacht Amadea, due to the "excessive costs" of maintenance and crew. The DOJ also mentions that Kerimov had been looking to sell Amadea for years.
"This is not a situation in which a court would be ordering the sale of a precious heirloom that a claimant desperately wishes to keep for sentimental reasons," the government said in filings.
The U.S. is currently spendng about $1 million per month as the maintenance cost for the mega-yacht. It reportedly takes $600,000 per month for running, $360,000 for the crew, $75,000 for fuel, and $165,000 for maintenance, which includes waste removal, food, and other expenses. They also pay $144,000 in monthly pro-rata insurance costs and special charges including dry-docking fees, at $178,000, bringing the cost of maintenance to a total of $922,000 to be precise, as per CNBC.
To avoid getting captured, a $250 million yacht of one of Russia’s wealthiest oligarchs is sailing at full speed towards Australia. The vessel ‘Amadea’ is longer than a football field, it has a dedicated party deck with 20,000 watts of speakers and a cinema with a popcorn machine pic.twitter.com/KnXtGDYIZP
— Michael (@JaMtoka) April 10, 2022
"It is 'excessive' for taxpayers to pay nearly a million dollars per month to maintain the Amadea when these expenses could be reduced to zero through interlocutory sale," the government said in recent court filings.
However, in recent court filings, Khudainatov’s attorneys have objected to the selling of the yacht, saying the sale could lead to a distressed sale price, and also that the maintenance cost was nothing considering the value of the yacht.
DOJ: At the request of the United States, Fijian law enforcement executed a seizure warrant freezing the $300 million Motor Yacht Amadea, a 348-foot luxury vessel owned by sanctioned Russian oligarch Suleiman Kerimov. The yacht is now in Lautoka, Fiji. pic.twitter.com/hIWTrq0ift
— Eamon Javers (@EamonJavers) May 5, 2022
The costs that the government is incurring shed light on the legal challenges of seizing as well as selling assets owned by Russian oligarchs after the country invaded Ukraine. Ursula von der Leyen, President of the European Commission, said that the EU really should use the profits from more than $200 billion of frozen Russian assets to fund Ukraine’s war effort. Her comment represents the collective sentiment and many wanted the yachts, private jets, and mansions of Russian billionaires frozen in the hope of putting pressure on the Russian President.
As per CNBC, even if the yacht is sold, the proceeds will not go to the U.S. government, as the money will be held while Khudainatov and the government continue their battle in court. This luxury yacht featured a lobster tank, a hand-painted piano, a swimming pool as well as a huge helipad. It was built in 2017 by the German company Lurssen and is the 63rd-largest yacht in the world.