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Ohio company wins rights to treasure of 1857 shipwreck embroiled in decades-long legal battle

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CINCINNATI - A fugitive treasure hunter's company has lost its bid to stop deep-sea explorers from bringing up gold and other artifacts from a ship that sank off the South Carolina coast in 1857 and has been the subject of legal fights for nearly 30 years.

In a ruling Wednesday, federal Judge Rebecca Beach Smith declared that an Ohio company, Recovery Limited Partnership, has the salvage rights to the ship, the SS Central America.

Smith rejected arguments from another Ohio company, Columbus America Discovery Group, that it had exclusive rights to the shipwreck under a court order and that Recovery Limited was trespassing and should be held in contempt of court.

Smith ruled that when the court order was issued, Columbus America acted as Recovery Limited's agent, and that relationship means that Recovery Limited has the salvage rights.

Operating under a court-appointed receiver, Recovery Limited has contracted with a Florida company and has been recovering treasure from the shipwreck since April. It has recovered at least 1,000 ounces of gold but the exact details of the operation have been kept secret under a court seal.

Milt Butterworth Jr., recently named president of Columbus America, said the company had hoped for an evidentiary hearing before Smith ruled.

"The decision is disappointing," he said in a statement. "In the days ahead we'll be considering options," which could include an appeal of Smith's decision.

Ira Kane, the court-appointed receiver of Recovery Limited, was out to sea Thursday as part of the ongoing recovery of the Central America's treasure and could not be reached for comment.

The ship was in operation for four years during the California gold rush. It sailed into a hurricane in 1857 and sank in one of the worst maritime disasters in American history; 425 people were killed and thousands of pounds of gold sank with it.

Wednesday's ruling is the latest in a decades-long legal saga involving the ship.

The fight began after Tommy Thompson, a marine engineer from Defiance, Ohio, assembled a team of experts, developed new technology and persuaded dozens of investors to give him $12.7 million to find the Central America, which sat untouched on the bottom of the Atlantic Ocean for more than a century.

Thompson delivered on his promise, finding the shipwreck in 1988 and recovering hundreds of pounds of gold. But the victory was short-lived. Dozens of insurance companies sued to claim the gold, arguing that they had insured it in the 1800s, though they had no proof and had done nothing to help find it.

That fight lasted more than a decade and ultimately went in Thompson's favour.

The gold was later sold for about $50 million, which Thompson's supporters say ended up going mostly toward legal costs and repaying loans.

Investors and crewmen who helped find the gold but saw no windfall from the sale filed their own lawsuits against Columbus America, and both cases are pending.

A warrant for Thompson's arrest was issued in 2012 after he repeatedly failed to show up in court, and he has been wanted since.

The current recovery efforts may be the first time investors see profit from the Central America since they put money toward the venture in the late 1980s and early 1990s, though some have since died.

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Follow Amanda Lee Myers on Twitter at https://twitter.com/AmandaLeeAP

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