The American Club is accused of terminating coverage of a troublesome ship controlled by George and Stathis Gourdomichalis to avoid having to pay an eight-figure claim, according to a new lawsuit in the ongoing Adamastos abandonment saga.

In the $18.5m lawsuit, Munich Re-backed Great Lakes Insurance has alleged that the New York protection and indemnity club and the Gourdomichalis brothers conspired to abandon the 73,500-dwt Adamastos (built 1995) after it was detained by Brazilian authorities in 2014.

At the time, George Gourdomichalis was a director at the American Club, where he is now chairman.

The American Club and the Gourdomichalis brothers "have continued to operate with impunity, despite unconscionably abandoning the vessel, its contractual partners and its cargo in Brazil and leaving nearly $20m of covered claims to be unpaid", lawyers said in a complaint filed by Great Lakes in a New York federal court on Monday.

George Gourdomichalis declined to comment for this story, saying he had not read the lawsuit. American Club chairman and chief executive Joseph Hughes did not immediately return TradeWinds' request for comment.

The Adamastos was chartered to operator Pacific Gulf Shipping Co in April 2014, then sublet to Integris and then Japanese Marubeni Corp to ship soybeans from Brazil to Japan and Singapore.

But the ship was seized on 5 August when a port state inspection in Brazil found 42 deficiencies. The next day, the ship broke free of its moorings and ran aground with nearly 60,000 tonnes of soybeans onboard.

According to internal emails cited in the complaint, American Club executives acknowledged the incident was of "great concern" due to the size of the claims and the extent of the Adamastos' issues.

Big claim

The figure, at first expected to be more than $25m, would have added up to several years' worth of overall claims faced by the American Club, the smallest insurer in the International Group of P&I Clubs. It would have exceeded the $10m claim cap, leaving the remainder to be picked up by the International Group.

Great Lakes' lawyers said that in January 2015, Gourdomichalis-controlled Phoenix Shipping & Trading sent a letter to the Greek government, saying it had ceased operating the Adamastos, which the brothers owned.

Brothers: George (left) and Stathis Gourdomichalis. Photo: TradeWinds

The next day, the American Club terminated coverage, citing the change in management, court records show.

The Brazilian government declared the ship abandoned in February 2015, leaving the cargo to be sold to a third-party salvor. Pacific Gulf, Integris and Marubeni filed arbitration in London to recover damages later found to be $18.5m.

Meanwhile, American Club executives Donald Moore and Dorthea Ioannou, both accused of being in on the scheme, were promoted. George Goudomichalis became chairman in 2018.

The Great Lakes lawsuit is at least the fourth in the ongoing legal battle over the Adamastos' abandonment.

Last December, Pacific Gulf filed a $22.6m lawsuit seizing the 52,500-dwt Vigorous (built 2005) in connection with the case. The 30,778-dwt Fearless (built 2001) was seized in February in a lawsuit in Houston federal court in an attempt to obtain security to cover claims.

Both cases are ongoing.

In a third case, Pacific Gulf accused the American Club of withholding documents in the Vigorous' arrest case to protect the Gourdomichalis duo.

The club was able to get the subpoena quashed, arguing the request was too broad and the documents contained confidential information.

The club has in the past argued its treatment of the Gourdomichalises was business as usual.

"The club is simply supporting a member in good standing as it would any member, regardless of whether that member was represented on the board, under the terms of the member's insurance coverage," Hughes wrote in a letter to TradeWinds in January.