Team New Zealand boss Grant Dalton will brief members of the Royal New Zealand Yacht Squadron next week on negotiations towards the next America's Cup, amid rumours of a possible legal challenge if an attempt is made to move it away from New Zealand.
On Tuesday evening Dalton is due to meet with members of the squadron alongside commodore Aaron Young, just two days before the period of exclusive negotiations with the Government is set to expire.
Young said the meeting was a forum to "give the members an update as to what's been going on in the last few months".
The meeting could see members discuss whether the Auld Mug, the world's oldest international sporting competition, could be moved offshore.
Even before Team NZ defeated Luna Rossa to win the 36th America's Cup in March, the syndicate had already confirmed they were considering taking the next regatta offshore, with documents suggesting they were seeking interest from cities around the world.
Victory in March kicked off three months of exclusive negotiations with the Government over a further defence in Auckland.
But talks appear to have stalled. While both sides have refused to comment while good faith negotiations are underway, the Herald has been told negotiators appointed to represent the Crown in talks with Team NZ have been told their bid was unsuccessful.
Whether Team New Zealand can take the event offshore appears to be the subject of debate among lawyers.
Team New Zealand were formed for the RNZYS's pursuit of the America's Cup, which was established in the 19th century and raced between yacht clubs.
One Auckland lawyer said they were of the opinion that the decision on the location of the America's Cup was not something which could be delegated by the RNZYS under the Deed of Gift which sets the rules for challenges.
The lawyer believed a number of law firms may have provided similar advice to the RNZYS, but declined to discuss the situation publicly as it may jeopardise attempts by some members of the squadron to ensure the America's Cup stays in New Zealand.
Young suggested the future location of the Cup was a decision to be made "together" by the squadron and syndicate. His preference remained to keep the event in Auckland.
"The squadron is the trustee of the America's Cup but there is an agreement that the squadron has had and does have with our representative team, Team New Zealand, and so therefore it's really a decision that we all make together," Young said.
"We've said all along that we'd like the event to be in New Zealand. I don't think we've made any secret of that. We've got to work through that process and see if we can make that happen."
Young had heard talk of possible legal challenges but nothing had been raised directly with him.
"There's lots of opinions. At the end of the day the squadron has an agreement with Team New Zealand and we'll work together to try and come up with the best outcome, not only for the event but the best chance for us to retain the America's Cup.
"I've heard lots of stories but no one's come to me with anything specific, but the squadron has its own legal advice as any business probably does."
A spokesman for Team New Zealand said Dalton would update squadron members about the negotiation process as he had throughout the process. It would not include discussing the outcome of negotiations with the Crown "because it is prior to the end of the exclusive negotiation period".