State Land Board Approves Settlement to Remove Wreckage of The New Carissa

Photo of New Carissa taken February 4th 1999 spinreel.com

(SALEM) - The State Land Board on Tuesday approved settlement of an appealed lawsuit by Green Atlas Shipping Company, which will enable the state to remove the wreckage of the New Carissa, the cargo ship that ran around near Coos Bay in February 1999.

Under the settlement, the State of Oregon will receive approximately $22.1 million to pay for removing the wreckage and to cover legal expenses.

"I'm pleased with this settlement, because it enables us to begin making plans to remove the wreck of New Carissa from a beautiful stretch of beach," said Governor Ted Kulongoski, chair of the Land Board. "This settlement allows the Land Board to carry out its responsibility to keep the coastline clean and safe for our citizens and visitors."

The New Carissa ran aground on Feb. 4th, 1999, near Coos Bay. Despite efforts to remove the vessel, portions of the bulk cargo ship remain on the Oregon shore.

After lengthy negotiations during 2001 and 2002, the Department of State Lands (DSL) sued Green Atlas, the owner of the ship, to force removal of the wreckage from Oregon's beach. DSL and the State Land Board oversee the area within three miles of the shore for public navigation, recreation, fisheries and commerce.

At the conclusion of a lengthy trial in November 2002, the Department of State Lands won a favorable jury verdict against Green Atlas. The verdict required payment of $25 million to enable the state to remove the stern section that remains on the beach. A portion of the judgment will help pay for attorney fees and other costs associated with the trial.

Green Atlas deposited the money in a Department of Justice (DOJ) account pending an appeal, which Green Atlas filed in December 2002. Oral arguments were scheduled for next month.

The settlement, which both parties approved, contains the following provisions:

1) The parties agree that of the approximately $27.1 million held in the DOJ client trust account, $5 million will be released to Green Atlas Shipping Co., and the balance will be paid to the State of Oregon in settlement of the pending lawsuit.

2) The $5 million will be released to Green Atlas Shipping upon its withdrawal of its appeal of the case, and entry of a final judgment dismissing the appeal.

3) The State of Oregon will receive the balance of the amount held in the DOJ client trust account (approximately $22.1 million). The State intends to use most of the funds it receives, approximately $19 million, including the cost of a supervisory contractor and contingency funds, to remove the remaining wreckage of the New Carissa. The state will use the remaining monies (approximately $3.1 million) to pay DSL's legal costs.

4) Green Atlas Shipping will assist DSL in developing a contract for the removal of the wreckage.

Secretary of State and Land Board member Bill Bradbury praised the settlement, noting the shipwreck occurred in his former state senate district, and that "this sends a strong message that we care about preserving the natural beauty of our beaches in Oregon."

State Treasurer and Land Board member Randall Edwards said, "Removing the ship's wreckage has been the goal since the ship ran aground, and I'm pleased that we are finally able to fulfill this commitment to maintain the beauty of our coastline."

Also during Tuesday`s meeting the Land Board approved DSL's request to appear before the September 2006 Legislative Emergency Board to obtain expenditure limitation of $19 million to remove the remaining wreckage of the New Carissa from the Oregon shore.