Discoverers of Blackbeard's flagship sue state for $8M

The company that discovered the wreck of the pirate Blackbeard's flagship filed an $8.2 million lawsuit against the state in Superior Court Monday morning, alleging North Carolina officials breached their contract with the company over the site.

Posted 3:13 p.m. Jul 27, 2015 — Updated 9:20 p.m. Jul 27, 2015

RALEIGH, N.C. — The company that discovered the wreck of the pirate Blackbeard's flagship filed an $8.2 million lawsuit against the state in Superior Court on Monday morning, alleging North Carolina officials breached their contract with the company over the site.

Under a salvage permit from the state, Florida-based Intersal Inc. found the Queen Anne's Revenge in 1996 about a mile off the coast of Atlantic Beach. In several agreements with the state since then, the company gave up rights to treasure and artifacts in exchange for shared rights to photos and video, potential artifact tours and proceeds from replica sales.

The lawsuit filed in Wake County Superior Court accuses the state of violating several parts of those agreements, including improperly displaying thousands of images from the Queen Anne's Revenge site and not including the company in plans for commercial video opportunities. It also says state officials have been dragging their feet over the operations of a business panel, which would determine how the two parties might share potential revenue.

"We feel like we've been good faith partners from beginning to end," Intersal Board Chair John Masters said in a phone interview Monday. "We've gone above and beyond to follow the rules, and we don't feel like we've gotten the same courtesy back."

Masters said his company, which he took over following the death of his father Phil in 2007, spent "a considerable amount of money" finding the QAR with the idea that replica and media rights would bring some return.

"Like it or not, this process is costing us money and we feel like we've done it in good faith," Masters said. "Intersal is committed to protecting its rights"

Off North Carolina's coast, lure of sunken treasure fades

Aside from conduct over the Revenge site, Intersal says in the filing that state officials have demonstrated "a pattern of obstruction, delay and failure" during the renewal process for the salvager's permit to hunt for El Salvador, a 1700s-era Spanish treasure ship believed to have gone down in an area near Cape Lookout.

The Department of Cultural Resources would not make anyone available for an interview Monday, instead providing a written statement.

"The many treasures entrusted to the North Carolina Department of Cultural Resources are owned by the people of this state," DCR spokesperson Cary Cox wrote. "The Department acknowledges Intersal Inc. and Mike Daniel’s discovery of Blackbeard’s shipwrecked flagship, the Queen Anne’s Revenge, off the North Carolina coast in 1996, but denies any breach of contract occurred."

Intersal calculated the $8,187,000 lawsuit based on the improper use of more than 2,000 photos of the Revenge site and more than three hours of video.

"We believe that amount will go up once we get to discovery," Masters said.

It’s the second time the company has sued the state. In May, Intersal dropped a $14 million suit against Cultural Resources filed in the Office of Administrative Hearings, saying it would bring the case to federal court instead.

Intersal executives say a federal filing may still be a possibility.

"Intersal does have intellectual property and rights involved in this project and we feel like our rights have been violated," Masters said. "We are going to do whatever we need to do to protect our rights and our interest and our intellectual property."