The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Stellar Waste’s principal is seeking a Supreme Court Order to prevent David Kosoy’s Sterling Asset Management from selling a West Bay Street real estate project, as he bids to recover his alleged $2.019 million investment.

Dr Fabrizio Zanaboni, in legal filings obtained by Tribune Business, is claiming that the previous legal debacle surrounding the development originally known as ‘Allure’ or ‘The Palms’ meant he never received the two units he purchased.

The 5.295-acre property, located just east of Caves Heights on New Providence’s northern shore, has been embroiled in litigation - and undergone a succession of owners - since Dr Zanaboni made his purchases in 2008.

It was ultimately acquired by The Ocean Terrace by Sterling Ltd, a unit of Mr Kosoy’s Nassau-based Sterling Financial Group, in July 2014, and subsequently twice-mortgaged to a group affiliate for $3 million and $4.5 million, respectively.

Dr Zanaboni’s company, Leo International Holdings, and its attorneys, Ian Cargill & Company, in June 2, 2016, court filings are seeking an emergency injunction to prevent Sterling from “working on the property and exercising its power of sale to dispose of the property”.

There is nothing to suggest that Sterling and its affiliates, or Mr Kosoy and his executives, have any responsibility for - or connection to - Dr Zanaboni’s inability to realise his investment and gain possession of the units he allegedly acquired.

The Stellar principal allegedly purchased the Grand Penthouse 2 and Unit 3002 properties, respectively, for $1.25 million and $875,000 from the original developer, North Andros Assets.

Yet the court documents indicate the injunction bid is merely the first step in a wider action that Dr Zanaboni is planning to launch imminently against Sterling and all former owners of the project, in his bid to gain compensation.

He has joined forces with Allure (Bahamas), the former third-party developer for ‘The Palms’, which entered into a joint venture with the first owner, North Andros Assets, to develop the 1.45 acre tract at the property’s front.

Allure (Bahamas) is seeking to recover the $99,033 is allegedly spent on furniture and electronics to outfit the two units purchased by the Stellar principal.

Dr Zanaboni and his firm have been embroiled in several business controversies related to Stellar Waste’s proposal to construct, and operate, a $650 million waste-to-energy plant at the New Providence landfill.

The company was at the centre of the so-called ‘Letter of Intent’ controversy, which resulted in the resignation of former parliamentary secretary, Renward Wells, and almost derailed its proposal.

Stellar has clung on, though, and remains ‘in the game’. Yet Dr Zanaboni was then subjected to a probe by the House of Assembly’s Committee of Privilege, after he was recording suggesting that MPs from both major political parties had requested financial contributions from himself and Stellar to finance constituency activities.

Tribune Business sources yesterday suggested that some of those comments, particularly where Dr Zanaboni said “I spend enough money and don’t want to be taken as a fool again”, related to frustrations over his investment in ‘The Palms’.

An affidavit sworn on behalf of Dr Zanaboni’s Leo International Holdings by Deneyka Basden, a legal secretary with Ian Cargill & Company, alleged that North Andros Assets never provided them with the Declaration of Condominium - the document that would have established The Palms’ existence - despite promising to do so when the purchase was made in 2008.

Alleging that The Ocean Terrace/Sterling should have known of this and other woes after doing due diligence on the property, Ms Basden explained why an urgent injunction was being sought.

“The urgency of the application, which justifies it being made ex-parte, is that said property has had four previous owners since 2005, the said property changing ownership three times in two years between 2012 and 2014,” she alleged.

“I am advised, and verily believe, that in the circumstances there is real and immediate risk that [The Ocean Terrace by Sterling Ltd] may sell the said property and further deprive the first plaintiff of their two units and/or the $2.019 million paid in escrow to the purchases thereof, and deprive the second plaintiff of $99,033 for the purchase of furniture to outfit the two units.”

Cordell Funding, the Miami-based lender to North Andros Assets, ultimately took possession of the property via a Supreme Court Order in 2012.

It subsequently conveyed the site to The Palm West Bay Ltd, a firm owned by its shareholders. This was the entity that sold the project to The Ocean Terrace by Sterling Ltd

Ms Basden alleged that efforts to settle with North Andros Assets had proven fruitless, and her clients had been “caught up in a situation in which they were blind-sided” by all the litigation impacting the project.

An earlier legal action by Dr Zanaboni and Leo International Holdings to recover their investment “fell by the way” due to numerous changes of attorneys and the other ongoing litigation involving ‘The Palms’.

Mr Basden also alleged that Dr Zanaboni/Leo and Allure would be prepared to give a financial undertaking to compensate Sterling and its Ocean Terrace affiliate, should they obtain the injunction but lose the case. She acknowledged that sales might be lost.

Tribune Business has reported extensively on the Allure ‘controversy’ since it first reared its head in 2010. The saga has ensnared a number of prominent Bahamians, including former PLP Senator and accountant, Philip Galanis; noted QC and attorney, Thomas Evans; and a host of Nassau’s most prominent commercial litigators representing various parties in the case.

There is nothing to suggest that Mr Galanis and Mr Evans have done anything wrong in relation to the ‘Allure’ issue,

Yet it has been another situation that threatened to damage the Bahamas’ reputation as an attractive second home and foreign direct investment (FDI) destination, with buyers such as Dr Zanaboni having purchased units and yet to receive them or the return of $1 million-plus sums.

Sterling Financial Group, meanwhile, has been in expansion mode, just recently launching its own private bank and trust subsidiary in the Bahamas.

Mr Kosoy has also partnered with developer Jason Kinsale for the 38-unit Paradise Island condominium project, ‘Thirty|Six’.

And Sterling also provided the mortgage financing to fund the acquisition and upgrade of the former Nassau Palm hotel on West Bay Street.