A Bermuda Stock Exchange-listed company has become embroiled in a lawsuit in Florida concerning the fate of a Bahamas film studio where the second and third Pirates of the Caribbean movies series was shot.

Ashby Corporation Ltd., which has been listed on the BSX since 2002, is the owner of Gold Creek Studios, which was developed from a former US Air Force Base in the East End of Grand Bahama in 2000.

KYC News reported this week that Ashby and associated companies are being sued in Miami by Nevada-registered Bahamas Film Studios Inc., as successor in interest to BVI-registered Media Underwriting Ltd., which claims it was swindled out of $2 million by the Ashby group in an offshore “alternative financing” arrangement in which alleged Ashby owner Ross. N. Fuller allegedly agreed to sell a major stake in the financially-troubled movie studio group in return for assistance with paying his group’s burgeoning debts.

“Ashby not only failed to deliver under the terms of the deal but is “imminently closing another sale” of its stock to Bahamas-registered Bahamas FilmInvest International Ltd., according to the plaintiff,” the KYC report said.

According to the complaint, Ashby Corp. bought 100 percent of the shares of Gold Creek Enterprises Ltd. from Hans J. Schutte, a resident of the Netherlands, in 2003. Some-time after the transaction, the shares of Gold Rock were assigned to either Finpac or Mr. Fuller in his individual capacity. The complaint alleges that Mr. Fulelr controls both Finpac and Ashby.

The studio ran into financial difficulties soon after and was unable to repay its debts of some $13.5 million, its running costs of $100,000 per month or a $30 million commitment to finish developing the property.

Subsequently, the complaint send, the studio’s lenders arranged for Monaco businessman Bjorn Monteine, as controlling shareholder of Mediator Underwriting Ltd., to buy the business through a reverse takeover and take it public in the US, using a US shell corporation.

Mediator would assume responsibility for the bank loans, the studio’s running costs and would locate a financial backer for the second phase of the development.

In return, Ashby would get a 16 percent stake in the public company.

Mediator alleged in the claim: “Ross Fuller made multiple misrepresentations in the July, 2005 Agreement including the omission to disclose to Mediator that Gold Rock owed over $1 million in immediate urgent debts on the date of execution.

“Mediator fully complied with the terms of the July 2005 Agreement, and assumed that the shares of Ashby Bahamas had been delivered on August 15, 2005, the date of the closing, to the offices of his attorney, Arvesu, and thus began to focus on arranging for the public offering and commenced assuming all of the corporate financial obligations of Gold Rock.”

the claim also alleged that while Mediator moved to find a backer and a shell company and transferred $2 million to Gold Rock, Fuller failed to transfer the shares and removed all of the Gold Rock’s financial records from its Freeport office.

“It has now become apparent that Ross Fuller never intended to transfer the shares of Ashby Bahamas to Plaintiff,” the claim states. “Ross Fuller simply intended to design a contract whereby Mediator would clean up millions of dollars of Gold Rock’s debts, pay off Finpac and Jonas Pettersson’s debts to AIG Private Bank, and provide working capital so that Gold Rock could comply with its agreement to serve as the film studio for Disney for the Pirates of the Caribbean production from September 2005 to February 2006.

“Fuller created a scheme where Mediator would provide a financial rescue for the Gold Rock project and receive no consideration in return. Mediator’s attorney, Arvesu, facilitated Fuller’s scheme and negotiated, prepared and recommended execution of this one sided agreement to the detriment of his client.”

The plaintiff wants the court to issue an order:

[bul] Preventing Ashby from transferring its stock to Bahamas FilmInvest International Ltd. or “any other party”;

[bul] Declaring that the agreement between Bahamas Film Studios Inc. and Ashby is “valid”;

[bul] Requiring the defendants to “immediately transfer” the shares of Ashby Bahamas to the plaintiff; and

[bul] Requiring the defendants to pay damages of $2 million, representing the amount that the plaintiff claims to have already transferred to Fuller’s group.

Fuller and the Ashby Group defendants have applied to have the complaint against them dismissed on jurisdictional grounds, KYC News said.“In one court filing, Fuller and his group also gave an indication as to how they will defend the complaint should they lost the jurisdictional battle, claiming that the plaintiff in the action breached their agreement when it “failed to have a public company place the shares, failed to assume the $9,950,000 First Caribbean bank debt, failed to pay the EUR $3.6 million to AIG Private Bank (and further failed to establish that it had the ability to pay the entire debt), failed to obtain a financial backer for $30 million, and only sporadically, after continuously missing deadlines, paid operating expenses”.

Fuller’s Ashby Corporation Ltd. was incorporated in Bermuda on August 16, 1999 and its address is given as “c/o” First Bermuda Securities on the website of the Bermuda Stock Exchange, where Ashby’s shares are listed but have never traded.

Ashby’s shares are also listed on the Pink Sheets market in the United States, where their closing price on December 1, 2006 was two cents per share.

On its website at www.ashbycorporation.com, Ashby Corp. currently identifies its directors as Hans J. Schutte, chairman and CEO; Michael Collyer, Vice Chairman; James R. Reed, who is a New York City-based attorney; Michael Schroter, and Jeffrey Conyers, the latter two of whom are senior officers and owners of the First Bermuda Group, with Conyers also currently serving as Deputy Chairman of the Bermuda Stock Exchange.

The information appears to be out of date, however, since Ashby issued a press release on April 19, 2005 in which it announced the “recent deaths” of Schutte and Collyer. The release also stated that Fuller had been appointed as Chairman and “Kevin Jackson” as a “replacement director”.

Ashby’s entry on the Pink Sheets’ web-site contains only one name under “officers”, that of Reinald Curiel, who is described as the company’s Chief Financial Officer.

Last week, Ashby received permission from the BSX to delay filing its annual results for 2005 and more recent interim results. Ashby said the extensions were requested by the company due to delays caused in the return of documents the Company had provided to a third party.

Also on December 5, Ashby said it had received two independent offers for Gold Rock Creek Enterprises and said Company was reviewing the offers to determine which is in the best interest of the Company and the long term goals of its Bahamas subsidiary.

The statement said a decision was expected within the week and Mr. fuller said the sale could be “eight figures” o rmore than $10 million before payoff of the subsidiary’s debt.

“Mr. Fuller indicated that it was in the best interest of Ashby shareholders to dispose of their Bahamian assets because of capital needs of the parent,” the statement said. “Mr. Fuller assures the shareholders of his continued personal financial support of the parent during this transition period.”

Ashby embroiled in Florida court dispute