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Dispute over $18m loan takes new twist

Par-la-Ville Carpark (Photo by Mark Tatem)

A legal dispute over an $18 million loan has taken another turn, with one defendant launching a cross claim against two others.

Last year, it was revealed that the New York-based Carlton Group — hired to secure an $18 million loan for Par-la-Ville Hotel and Residences Ltd (PLV) — had launched a claim over allegations that PLV had failed to pay a $900,000 commission.

In addition to PLV, developer Michael MacLean, Johann Oosthuizen, Wakefield Quin Ltd and Theodore Adams III were all listed as defendants in the matter.

According to new legal documents, filed in New York on May 5, Mr Adams has now launched a cross claim against both PLV and Mr MacLean over a breach of contract.

In the documents, Mr Adams claims that he had owned all issued and outstanding shares in PLV in July 2012, when Mr MacLean entered into a stock purchase agreement to buy 80 per cent of the shares.

Under the agreement, Mr MacLean would also be given a proxy from Mr Adams, giving him the right to the vote associated with Mr Adams’s shares.

The documents claim that Mr MacLean was supposed to pay Mr Adams in instalments timed to coincide with PLV receiving advances of loan proceeds from Mexico Infrastructure Finance LLC, with all payments to be completed by February 1, 2013.

The deadline was subsequently set back until July 1, 2015, with the purchase price of the shares increasing from $10 million to $14.8 million and MacLean paying extension fees to Mr Adams.

The legal documents then allege that while Mr Adams had fulfilled his obligations under the contract, Mr MacLean has yet to pay him the full purchase price.

The document called for a judgment against Mr MacLean and PLV, jointly and severally, in the amount of $11.8 million plus interest.

The documents claim that as part of the purchase agreement, PLV would indemnify and hold Mr Adams harmless of any liability arising from his former status as shareholder and officer of PLV, requesting that the courts find that Mr MacLean and PLV are liable to reimburse Mr Adams for any judgments against him in favour of the Carlton Group, along with associated attorney fees. The lawsuit is one of several surrounding the loan, which reportedly defaulted this year.

Mexico Infrastructure Finance subsequently launched legal action against both PLV and the Corporation of Hamilton, which guaranteed the loan, using the Par-la-Ville Car Park as collateral. As a result of the default, Mexico Infrastructure Finance exercised its rights to appoint joint receivers for the property.

Home Affairs Minister Sen Michael Fahy, who assumed stewardship of the corporation in January, has said that he and other parties are working to retrieve the funds and have the property released from receivership.

• It is The Royal Gazette’s policy not to allow comments on stories regarding court cases. This is to prevent any statements being published that may jeopardise the outcome of that case.