A receiver will oversee the operations of Amistad America Inc., the troubled nonprofit that operates the Connecticut-based replica of the slave vessel Amistad, a court ruled Thursday.
New Haven, Conn., attorney Katharine Sacks has full control of the company, Judge Antonio Robaina ruled Thursday in the Superior Court for the Judicial District of Hartford. "She will have all the responsibilities of day-to-day operations," said Robert Blanchard, spokesman for Attorney General George Jepsen.
Blanchard said Sacks, who has run a law practice since 2001 and has extensive experience as a court-appointed receiver, will work with Jepsen's and Gov. Dannel Malloy's offices, the Office of Policy & Management, the Department of Economic and Community Development, city officials in the Amistad's home port of New Haven, and other stakeholders in an effort to deal with Amistad's debts and rebuild the organization.
Thursday's order bans the current operators from business transactions and resolutions pertaining to governance or budgeting.
State officials are poring through four years' worth of audits of the organization by accounting firm CohnReznick LLP that chronicled a spiraling financial collapse by the nonprofit even as the state pumped grant money between 2009 and 2011. According to New London newspaper The Day, Connecticut has spent nearly $8 million of taxpayer money on the ship.
According to one state official, the nonprofit has defaulted on "hundreds of thousands of dollars of debt."
Connecticut has frozen payments on Amistad's $359,000 annual subsidy pending a review of the audits.
The future of the Amistad, a replica of the slave ship that was central to a celebrated civil rights case in the mid-1800s, is in question after Ocean Classroom Foundation Inc., of Damariscotta, Maine, which Amistad America hired to operate and insure the schooner for the last two years, said it would close at the end of the month. Amistad needs insurance to keep running.
In addition, the Internal Revenue Service revoked Amistad America's tax-exempt status in August 2012, alleging failure to file tax returns for three straight years.
"Success is not guaranteed, but today's action is a necessary first step and one that can give the state the confidence needed to continue expending funds allocated to the ship's operations," Jepsen said in a statement. Amistad's substantial challenges, he added, include a suitable governing structure and identifying reliable funding courses.
Assistant attorney generals Karen Gano and Mark Kohler, head of the special litigation department, are assisting Jepsen.
In court documents, Jepsen's attorneys alleged that Amistad America's operations were inconsistent with state requirements for charitable organizations. While saying they were unaware of any intentional malfeasance or misappropriation, the attorneys added that "the existing directors and officers have demonstrated an inability to properly manage the affairs of the Amistad America Inc., in the current circumstances."
Amistad America's four trustees confirmed their support of receivership. "The Board of Trustees and operational staff will work in full cooperation with the appointed receiver," they said in a court filing.
Connecticut officials expect the ship to remain open. It is scheduled to sail to New London for public tours this weekend.
The vessel was constructed at Mystic Seaport in 1999 to replicate the 19th-century Spanish slave schooner and educate the public about the 1839 uprising by African slaves against the Amistad crew. It led to a U.S. Supreme Court ruling - landmark at the time -- that freed the slaves.
The story inspired the namesake 1997 movie that Steven Spielberg directed.
