The Tribune

BY NEIL HARTNELL

TRIBUNE Business Editor

nhartnell@tribunemedia.net

AN EXPLORER owned by the billionaire proprietor of Walker’s Cay wrongly withheld a contractor’s 25-30 percent share of sunken treasure in Bahamian waters valued at billions of dollars, a US court has ruled.

Reed O’Connor, chief judge in North Texas, found on October 21, 2026, that Carl Allen and his Allen Exploration outfit had breached their agreement with Dan Porter, principal of Florida-based Maritime Research & Recovery, by failing “to divide treasure that is past due” following its recovery from a Spanish galleon that was wrecked on the Little Bahama Bank some 370 years ago.

His 68-page decision, which has been obtained by Tribune Business, details how the first underwater exploration and salvage licence issued by The Bahamas in almost two decades descended into an acrimonious battle featuring lurid allegations - which Judge O’Connor found unproven - of drug smuggling and breaches of this nation’s Customs and other laws (see other article on Page 1B).

The North Texas chief judge also warned that the court will supervise the division of artifacts recovered from the Nuestra Senora de la Maravillas, said to have been carrying an estimated $1.5bn worth of treasure when it wrecked, and “appoint a receiver if necessary” should Allen Exploration and Maritime Research & Recovery (MRR) not agree what the latter is due.

However, Maritime Research & Recovery and Mr Porter did not have it all their own way. For Judge O’Connor, in what was described as ‘findings of fact and conclusions of laws’ rather than a judgment, found they had breached the confidentiality deal signed with Mr Allen and misappropriated “trade secrets” by wrongly retaining - and refusing to return - his exploration business plan.

And he also dismissed Mr Porter’s claims that Allen Exploration had defamed his reputation through letters written to the director of the National Museum of The Bahamas and Bahamian Immigration director, accusing him of “misappropriating company funds and dishonest conduct” and of “stealing from the company [and] violating several aspects of Bahamian law”.

The ruling reveals that the Government’s share of the 2020 treasure recovery was $454,487 with the division and payment completed on August 10, 2021, just before the general election that brought the Davis administration to office. This then increased to $3m for 2021 and 2022 combined, with the Government receiving a further $359,189. Its four-year total share was $3.814m

Among the witnesses called to give evidence on the dispute, which covers five years’ worth of treasury recoveries from 2020 to 2024, was Dr Michael Pateman, recently named as executive chairman at the Antiquities, Monuments and Museums Corporation (AMMC), and the curator and director at Allen Exploration’s Grand Bahama-based Bahamas Maritime Museum.

The latter museum was established to showcase recoveries from the Nuestra Senora de la Maravillas, which sank in Bahamian waters in January 1656 and has been the subject of numerous salvage and treasure hunting expeditions. None have found the “golden Madonna”, made on the then-King of Spain’s orders, and which the galleon was supposed to be carrying when it sank.

Mr Allen, who owns Walker’s Cay, the private island destination at Abaco’s northern tip, obtained the necessary recovery licence from the Bahamas government to search for the vessel on June 15, 2020. He had previously received his other approval, an exploration permit, on July 25, 2019, from the then-Minnis administration covering 6,545 square miles of Bahamian waters.

“This was the first time in 18 years that The Bahamas had issued a recovery licence for any shipwreck in any part of its jurisdiction. Under the licence, Allen Exploration agreed to share approximately 25 percent of any recovered artifacts with the Bahamian Government,” Judge O’Connor recorded.

Mr Allen, described as a “successful businessman and philanthropist”, who divides his time between Dallas and The Bahamas, was said to have first met MRR’s Mr Porter during Hurricane Dorian relief efforts that year. “Allen and Dan Porter joined forces in the treasure hunting contract at the heart of this case,” the judge noted.

James Sinclair, a marine biologist, former MRR shareholder and personal friend of Mr Porter, sent him documents on the Nuestra Senora de la Maravillas project, which resulted in him formally meeting Mr Allen and Allen Exploration management, including its president, Preston Paine, in late October 2019.

This led to Mr Porter signing a services agreement whereby MRR would work on the search for artifacts located in Bahamian waters in return for Allen Exploration paying all its expenses and giving it a 30 percent share of all treasure recovered after the Government had taken its 25 percent cut.

“During this time, Dan Porter bought a house in The Bahamas for his daughter, Allie Fulton, which Allen Exploration agreed would be used as the operations base for the recovery,” Judge O’Connor wrote of the Freeport-based property.

“Allen Exploration initially offered to use their island, Walker’s Cay, for the base of MRR’s operations because it had a marina, an electrical generation station, and was owned by Mr Allen and his wife.

“Dan Porter convinced Allen that the island was not the right choice because there were no convenience, grocery, auto parts or marine equipment stores on it, and it was not that much closer to the Maravillas than the house.”

However, challenges with MRR’s Allen Exploration tie-up first emerged in 2021. “Pursuant to the parties’ agreement, Dan Porter and MRR performed extensive salvage operations, including more than 100 trips to sea and excavation of thousands of search areas, recovering gold, silver, gemstones and other valuable artifacts in the 2020 season,” Judge O’Connor wrote.

“Despite the operation’s successes, the parties began to have disagreements. In April 2021, Dan Porter threatened to quit because Allen Exploration attempted to reduce his recovery percentage. Allen Exploration represented to Dan Porter that a foundation established to benefit middle school children on behalf of the Allen family would take a cut of the treasure.

“Dan Porter, acting on behalf of MRR, agreed to a reduction from 30 percent to 25 percent. On April 21, 2021, the services agreement was amended to reflect this modification. As of the trial date, not only has the foundation never taken any of the treasure, the foundation does not exist.”

The services agreement was then terminated four months later, on August 19, 2021, after it emerged that Mr Porter and MRR had signed an agreement with a rival salvager for “shipwreck exploration in Bahamian waters” back in 2015. The area covered by that deal overlapped with Allen Exploration’s search area licensed by the AMMC in 2019.

MRR’s earlier deal contained “non-compete and non-circumvention” clauses and, to deal with the rival explorer’s threat to initiate legal action over its breach, Allen Exploration and Mr Porter agreed to terminate their written agreement and continue their relationship through a newly-created corporate vehicle that would conceal their ongoing partnership.

Judge O’Connor described this as “business as usual:, and added: “Per Allen Exploration’s records, MRR’s share also remained the same after the 2021 termination. The Bahamian government received 25 percent of the points, and the post-government pool (75 percent) was allocated among Allen Exploration, MRR and Mr Sinclair.”

He wrote: “In July 2024, Dan Porter believed that he was mapping the Maravillas debris trail to the sterncastle and that he was getting closer to the fabled golden Madonna. Right after finding three silver bars, which he believed to be a trail leading to the sterncastle, within the strike zone of the season, Dan Porter was called to a mandatory meeting.

“During the July 9, 2024, mandatory meeting, [Mr] Allen accused Dan Porter of mistreating the crew and using the crew to build the house [in Freeport]. Allen told him he had friends in the Department of Justice who had reports that Dan Porter stole gold coins in Florida.

“This was the first Dan Porter had heard of these allegations. Until this time, no one at Allen Exploration ever notified MRR that it believed MRR misappropriated or stole funds. Allen refused to offer any artifact division and demanded that Dan Porter accept only 60 percent of MRR’s contractual share,” Judge Allen added.

“Dan Porter rejected the demand, but by the end of the two-and-a-half hour meeting they agreed Dan Porter would continue working and that he would send Allen Exploration an accounting of what division of artifacts he thought was fair.” However, Mr Porter was then told on August 1, 2024, that MRR’s recovery services would not be needed after September 1, 2024.

“On September 5, 2024, Allen gave Dan Porter an ultimatum: Release the boats he used to Allen Exploration by 10am or he would get no division,” Justice O’Connor wrote. “By September 8, 2024, the relationship had collapsed. Allen decided that ‘the only way the Maravilla treasure [would] be broken up [was] over [his] dead body’.

“He wrote: [T]hey will have to sue in Texas . . . . I am personal friends with the governor [Greg Abbott], the lieutenant governor, and the attorney general Ken Paxton. I can assure you this will go to the top. All three are big followers and support what we do. Ahh, I do love a good home game. Stay tuned.” Mr Paxton is now the Republican candidate battling for a Senate seat in the US mid-terms.

Mr Allen’s optimism may have been partially ill-founded. Setting out both parties’ positions, Judge O’Connor said: “Plaintiffs [MRR] contend that the agreement to divide artifacts at 25 percent was never truly terminated.

“Accordingly they seek the 25 percent share owed to them. They assert claims for breach of contract and breach of fiduciary duty related to this time period. Dan Porter also brings a claim for defamation related to statements made about him.

“Defendants contend that plaintiffs are owed nothing. They argue Dan Porter lied to them from the beginning, there was no agreement to share artifacts after 2021, and they demand the return of their confidential information. They claim Dan Porter was being paid to look, but not to find, and he was constantly proposing more ways for him to be paid more money.”

Judge O’Connor rejected Allen Exploration’s arguments that the agreement with MRR was “void” because it made “several material misrepresentations” along with “omissions” and non-disclosure, including the failure to divulge Mr Porter’s past US criminal convictions for money laundering and drug trafficking, finding this was “not material” to their relationship.

And, while Allen Exploration argued that MRR’s claims for a share of the recovered treasure post-August 19, 2021, were “barred” because no oral or implied agreements promising such replaced the written deal, “the evidence demonstrated that after the termination of the written services agreement, nothing changed”.

“In fact, when plaintiffs’ counsel asked Allen: ‘During those five years, Allen Exploration continued to take the benefit of all of those vessels, and all of that know how and all of that risk from Mr Porter and the boats he brought, correct?’, Allen answered: ‘Yes’,” Judge O’Connor wrote.

“After the August 2021 termination, the parties continued their relationship on substantively the same terms, with Dan Porter providing vessels and operations management and Allen Exploration paying stipends, charter fees and expenses.

“This was consistent with the ‘paper termination’ plan and the formation of a successor arrangement as documented by counsel’s contemporaneous communications.” As a result, the judge rejected Allen Exploration’s argument that there was no “implied agreement” because the new company both parties talked about forming was never created.

And he also rejected Allen Exploration’s claim that the recovery share percentages were never agreed, referring to e-mail communications involving Dr Pateman. “In April 2023, Michael Pateman sent Dan Porter a 2022 artifact spreadsheet to get Dan Porter’s opinion before dividing the treasure with the Government,” Judge O’Connor wrote.

“The only reasonable inference for this is that Dan Porter also had an interest in the recovery. On June 25, 2024 - almost a year later- Paine forwarded an e-mail from Michael Pateman regarding 2021 and 2022 divisions to Allen, and in that e-mail, he discussed a percentage for MRR.”

“The total value of the 2021 and 2022 divisions is $8.86m. The Bahamas got the $3m pendant (33.8 percent of the total), Allen Exploration got $5.86m (66.2 percent of the total). Half of $5.86m ‘goes to the foundation’, so Dan gets 30 percent of $2.93m = $879,000 and Jim gets 2 percent of $2.93m = $58,600. In artifacts of course,” the e-mail said.

“I think we should tell Dan and Jim which artifacts they get. Last split Dan took all of the easily saleable items. Michael, can you help us determine what Dan gets. Michael also has some ideas about a replacement for Dan. Not that we would replace him, but so we can at least have some leverage. I think he should reimburse us for most of the expenses he incurs before he gets his cut.”

Judge O’Connor then interjected: “Allen, seemingly out of nowhere, responded, ‘Dan is getting zero’.” Then, just two days before the July 9, 2024, meeting at which Mr Allen attacked Mr Porter, “Michael Pateman e-mailed Paine about giving Dan Porter a 30 percent division” in a message titled “2021 and 2022 division”.

“I’ve updated the 2021 and 2022 master spreadsheet to include a section for Dan (MMR) and Jim (JS). The spreadsheet is set up to keep track of the total division as artifacts are selected from each category,” Dr Pateman wrote.

“I calculated the percentages as we previously discussed. After Allen Exploration and the Government’s division, Allen Exploration and the foundation divide the remaining in half. Then, based on the new total for Allen Exploration, Dan receives a 30 percent share of that collection and Jim a 2 percent share of that collection.”

Judge O’Connor found Allen Exploration and Mr Porter never agreed a reduction from the latter’s 25 percent share of remaining recoveries once the Bahamian government had taken its cut. “Allen Exploration’s attempts to reduce the share further confirm that the 25 percent obligation existed and that Allen Exploration was trying to negotiate it away,” he found.

“The parties had a clearly defined continuing agreement at 25 percent… Thus, the Court finds that the implied agreement continued with the same terms as the service agreement of a 25 percent artifact division. The essential terms of the implied agreement are established.. the percentage is 25 percent of the post-government share.”

As a consequence, the US judge found Allen Exploration to be in breach of contract. “Allen Exploration did not convey MRR’s 25 percent share of the 2021 pre-termination recoveries and, having found that Allen Exploration’s fraud in the inducement claims fail, Allen Exploration has no basis for withholding MRR’s share,” he found.

“Further, internal Allen Exploration e-mails indicate that there was no question that the 2021 division should have happened…. Thus, MRR succeeds on its claim against Allen Exploration for breach of the written services agreement.”

As for the division of recovered treasure spoils after the two sides’ written deal ended in August 2021, Judge O’Connor said Allen Exploration’s “unilateral refusal to divide artifacts after the implied agreement and scheme to get rid of Dan Porter is well documented” via the July 9, 2024, confrontation and termination of MRR’s services, plus the demand for the latter’s boats.

“Allen’s position became clear - Dan Porter was not going to get anything,” Judge O’Connor wrote, adding that the evidence showed the US billionaire investor was “dangling the prospects of a division over Dan Porter’s head to squeeze Dan Porter out of the project out of dislike for MRR’s investors and/or Dan Porter”.

The judge added: “Allen Exploration has not distributed the treasure and continues to refuse to. This comes as no surprise, because AEX failed to distribute another contractor’s artifacts before…. even though it had already been divided with the Bahamian government…. This circumstance corroborates Allen Exploration uses artifact distribution to obtain benefits it is not entitled to.

“Having considered all the evidence, plaintiff has proven Allen Exploration is in breach of contract for failure to divide treasure that is past due. The last treasure division was for the 2020 treasure recoveries and, under the contract, MRR is entitled to 30 percent of the post-government recoveries through April 28, 2021, and 25 percent thereafter.

“This entitlement covers the 2020 season and the 2021 pre-termination recoveries under the written services agreement, and all recoveries from the August 2021 termination through the 2024 season under the implied contract. The court retains jurisdiction to supervise and approve the division and appoint a receiver if necessary.”