Superior Court Judge Wayne L. Peterson on Monday denied a Los Angeles company's bid to seize America's Cup Organizing Committee cash and assets in order to settle a $310,000 contract dispute.
Peterson instead ordered the ACOC and Los Angeles-based E. J. Helicopter to enter binding arbitration before April 8.
The court challenge in San Diego won't impede the ACOC's ability to stage the ongoing yacht races, ACOC Vice President Jay Belbey said. "The immediate (cash) needs of ACOC have been and for the foreseeable future will continue to be met," he said.
Although financially troubled ACOC's cash flow remains tight, the committee will continue to stage the daily races and operate a downtown media center for reporters, Belbey said.
Most of the funding needed to finance race management and the media center is coming directly from the San Diego Unified Port District and ACOC sponsors, Belbey said.
The contract dispute that ended up in court Monday erupted late last year when a lack of funds forced the ACOC to transfer America's Cup television rights to the Challenger of Record Committee, which includes foreign racing syndicates competing for the America's Cup.
The CORC, which is now producing the television feed being broadcast by ESPN and television networks around the world, has renegotiated contracts that the ACOC had arranged with a number of suppliers, including E. J. Helicopters.
However, the CORC contract with E. J. Helicopters was $310,000 less than a $1-million contract previously signed by ACOC officials, according to Charles Harris, E. J. Helicopter's attorney. The ACOC is contractually obligated to make up the $310,000 difference, he said.
In a statement released Monday, ACOC officials said they have been willing to enter arbitration since late last year, when the dispute erupted.
Harris described Peterson's decision as "disappointing . . . but, given the short fuse on arbitration (proceedings), we may be able to get . . . damages within a short period of time."
Disgruntled creditors have filed two other lawsuits against the ACOC, Belbey said. Both suits, which date from 1991, revolve around contractual disagreements between the ACOC and suppliers, he said.