The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian businesses and individuals have joined forces to launch a $1.113 million damages claim against Jamie Dingman, son of world-famous entrepreneur, Michael, over his failed attempt to build a Nassau restaurant empire.

Companies, including the Wulff Road-based Tile King and FYP (For Your Place), together with former employees, associates and investors, are alleging that Mr Dingman “defrauded” them and “stole money and services” in his bid to develop a Bahamian hospitality business.

Their lawsuit, filed in the southern New York courts on Monday, claims that Mr Dingman has effectively abandoned them and “fled the Bahamas altogether”, refusing to pay what he owes to creditors and investors.

It alleges that he has stopped communicating with them, and is “hiding out in his girlfriend’s apartment in downtown New York City” in a bid to escape both his Bahamian creditors and ex-employees, plus foreign associates he either hired to assist him or induced to invest in the Nassau-based restaurants.

Mr Dingman’s efforts to build a Nassau-based restaurant and hospitality business included taking over the iconic Traveller’s Restaurant in western New Providence via a lease arrangement.

That venture failed and the property shut again, until members of the Bain family, its owners, re-opened it again this summer.

He also leased two units in the Klonaris brothers’ Elizabeth on Bay plaza on Bay Street for two other restaurant formats, both of which have also closed.

Tribune Business also revealed how Mr Dingman leased the Beach Club Cafe from Sandyport’s developers, viewing this as his “signature property”. The venture never opened, and the lease was pulled.

The lawsuit alleges that FYP and Tile King are owed more than $8,000 for building materials and supplies delivered to Mr Dingman’s businesses, but which were never paid for.

Other Bahamian businesses suing Mr Dingman via this lawsuit include the People First (Bahamas) employment agency, which claims to be owed more than $160,000.

Then there is Young Digerati (YNG), a small Bahamian-owned business, which lost more than $3,000 on a promotional event it wanted to hold at Mr Dingman’s Island Smoke House because the venue had been left “uninhabitable”.

“When YNG Group confronted Dingman about the situation, he dismissed their concerns, asking: ‘What are you gonna do? Sue me?’,” the lawsuit alleged.

The individual Bahamians suing Mr Dingman, include Jason Rolle, his former general manager, who claims to be owed $46,113 in unpaid salary and benefits, plus Tyrone Adderley, a contractor due more than $2,000 for work on the Beach Club Cafe at Sandyport.

The lawsuit also discloses that among those induced to invest in Dingman’s failed businesses is Atlantis public relations chief and radio host, Ed Fields.

He is alleged to have invested $25,000 in the Traveller’s Restaurant business, in return for an equity stake in Out West Hospitality, the holding company for Mr Dingman’s Nassau restaurant ventures. Mr Fields, though, is not named as a plaintiff in the lawsuit.

The action, obtained by Tribune Business, suggests that Mr Dingman expanded too far, too fast, and Out West Hospitality’s financial position steadily worsened to the point where it became unsustainable, leading to the eventual collapse.

The ‘abandoned’ Bahamian creditors/investors alleged that Mr Dingman used his family name and connections to launch his planned Nassau empire, with the lawsuit making every effort to connect him to his heritage.

“Defendant James T. Dingman is a child of wealth and privilege,” the lawsuit alleged.

“Dingman’s grandfather, James E. Dingman, was vice-chairman of AT&T. Dingman’s father, Michael D. Dingman, is an investment banker who renounced his US citizenship in 1995 and relocated his family to the Bahamas.”

It added: “In or around late 2012, after working for businesses owned or controlled by his father, Dingman set out to build his own empire. He announced plans to establish a Bahamian hospitality conglomerate that would own and operate a network of restaurants, bars, hotels, and other venues.....

“To fund the development of these businesses, Dingman exploited the Dingman family name and social connections. Dingman solicited investments from US citizens located in New York and elsewhere.

“In his communications with US investors, Dingman repeatedly lied about where their money was going and what they would receive in return. Indeed, Dingman promised investors ownership interests in Out West Hospitality that exceeded 100 percent of the Company’s equity. However, no one but Dingman and his agents ever received any stock.”

Claiming that Dingman misused some of the investors’ monies “to support his lavish lifestyle”, the lawsuit alleged: “Dingman also repeatedly lied to vendors and employees in the Bahamas. Dingman falsely promised payments for past-due and future invoices in order to induce vendors and employees to continue to provide Out West Hospitality and its purported subsidiaries with services and supplies.

“By fall 2013, Dingman and Out West Hospitality had defaulted on their payroll, vendor and rent obligations. Employees quit, service providers stopped performing, and landlords terminated leases. By August 2014, not a single one of Out West Hospitality’s restaurants, hotels and other businesses was operational.”

The lawsuit alleged that Mr Dingman operated his businesses via a ‘Peter paying Paul’ model, with monies shuffled between bank accounts belonging to the various restaurant formats, in a bid to hide the true financial position.

“Ultimately, creditors, investors, and staff learned their payments were not – as Dingman had claimed – delayed due to travel schedules, banking technicalities, liquidity issues, or the challenges of doing business in the Bahamas,” the action claimed.

“When Dingman’s victims finally understood that Dingman never intended to pay them at all and began to demand answers, Dingman stopped answering their phone calls, stopped returning their e-mail messages, and eventually fled the Bahamas altogether, hiding out in his girlfriend’s apartment in downtown New York City.”

Mr Dingman allegedly incorporated the six restaurant companies - BahaMex; 25 North; Traveller’s Beach Restaurant; the Island Smoke House; Galley Sports Bar; and the Daiquiri Factory - between December 18, 2012, and September 6, 2013, via his attorneys at Graham, Thompson & Co.

Out West Hospitality was formed as the holding or parent company for all these entities, with its ownership placed in two nominee companies - Grahamco and Nomco - both of which are allegedly controlled by Mr Dingman.

Several Americans who were either hired by Mr Dingman to be part of Out West Hospitality’s management team, or as consultants, alleged that no valid Bahamian work permits were obtained for them.

“Though Dingman had assured all of his non-Bahamian employees.... that he had procured the necessary work permits for them, he never did so, making it particularly difficult for these employees to recover their unpaid wages in the Bahamas,” the lawsuit alleges.

One Kirk Bouffard, alleged that he was induced to invest his entire $130,000 life savings in Out West Hospitality after Mr Dingman promised he would receive a 33 per cent equity stake in the business. A Dingman family friend, Frank Valdez, injected $695,000 for a similar ownership share.

“Though Dingman signed leases for BahaMex and 25 North in February 2013, his primary focus in launching his hospitality brand was the opening of the Traveller’s, a restaurant that reclaimed the name and location of an iconic Bahamian establishment that had been closed since 2012,” the lawsuit alleged.

“With expenses mounting, Dingman turned to his business partners for additional funding. From in or about January 2013 through in or about August 2013, at Dingman’s urging, Bouffard made additional cash investments into the project to help cover a range of operational expenses, including payroll, rent, construction supplies, and corporate formation fees.”

Although Traveller’s was “still struggling to get off the ground”, Mr Dingman allegedly forged ahead with the Island Smoke House’s opening in August 2013.

“In or about August 2013, Bouffard expressed concern to Dingman about Dingman’s decision to proceed with the opening of the Island Smoke House before addressing the substantial financial difficulties he was having launching the Traveller’s. Bouffard reminded Dingman that he had invested his life savings in the Traveller’s,” the lawsuit claims.

Bouffard exited his partnership with Mr Dingman the following month, but the latter never returned his funds as allegedly promised.

“In October 2013, Dingman retained People First to recruit, manage and handle payroll for the personnel working at the Traveller’s restaurant,” the lawsuit alleged.

“In or around November 2013, Dingman, Out West Hospitality and the company’s purported subsidiaries were already falling behind on payments and the Traveller’s staff was threatening to walk out.

“By this time, Dingman had already fallen well behind on rental payments for two other restaurants he had tried to get off the ground, 25 North and Baha Mex, properties whose leases he had signed in February 2013,” the action claimed

“Though 25 North had briefly opened for business, BahaMex was never operational. The landlord of these properties made numerous, failed attempts to collect the outstanding amounts and ultimately evicted both businesses, changed the locks, and rented the spaces out to new tenants.

“The evictions caused additional liabilities for Out West Hospitality because various vendors were unable to recover equipment they had delivered to those businesses.”

Apart from Mr Fields, the lawsuit alleges that Mr Dingman was also able to solicit a $50,000 investment from another Bahamian resident and family friend, Lenjohn van der Wal.

Mr van der Wal, too, is not listed as a plaintiff in the lawsuit, but the action claims that the purported share purchases in Mr Dingman’s businesses were never registered in the Bahamas as they should have been.