$163m at stake in Reeves dispute

By EUGENE BINGHAM

Former Team New Zealand lawyer Sean Reeves was paid $1.3 million in his brief but controversial career with rival America's Cup syndicate OneWorld.

But his pay packet is paltry compared with what OneWorld fear they will lose if the Reeves saga sinks their campaign - their entire investment of $163 million.

Documents obtained by the Weekend Herald reveal how Reeves became involved with the Americans just weeks after the last cup race in March 2000 and began recruiting designers and sailors even before he was employed by Seattle-based OneWorld.

Reeves said in an affidavit that he started his recruiting drive - which cost Team NZ key figures including sailor Craig Monk and designer Laurie Davidson - in "approximately April 2000".

He signed his first contract with the new team in June 2000.

But under that deal, he was paid US$29,000 ($63,000) for consulting work he had done in March 2000, said an affidavit by OneWorld chief executive Gary Wright.

He was then paid monthly fees of US$40,000 to US$60,000 until March last year, said Wright.

Several months after Reeves left the syndicate, OneWorld accused him of trying to sell some of their secrets to another team, Oracle Racing.

Reeves, a former Olympic sailor, filed counterclaims accusing OneWorld of having Black Boat designs and other technical data that they had no right to.

The claims have reached the cup's powerful arbitration panel, which is now considering whether OneWorld improperly obtained New Zealand secrets. The panel has the power to expel teams.

In papers filed this month, Wright has claimed his team are suffering financially and that their morale has been dealt a blow by the saga.

"Ultimately, the harm could be [the] loss of OneWorld's investment, which will likely total approximately US$75 million [$163 million]," said Wright.

The impact on the team's potential sponsors was also "real and substantial".

"While difficult to ascertain or quantify, such harm could easily run into millions of dollars."

Wright also said bills were already mounting.

"Investigating, analysing and responding to Reeves' breach of confidentiality, plus dealing with other teams and the ... arbitration panel, has in fact taken hundreds, if not thousands, of hours for OneWorld's personnel.

"The financial harm to OneWorld for this time alone likely exceeds US$500,000 [$1.1 million].

"Reeves' breaches of confidentiality have in fact impacted [on] the morale and efficiency of the ... team."

In a submission filed on Reeves' behalf, his lawyer, Guy Michelson, accused OneWorld of contradicting themselves under oath by initially claiming they could not set out any actual damages but then three weeks later setting out their losses.

The court case is not expected to go to trial until about April next year - after the cup.

- Additional reporting: Nick Perry

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