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‘Albany owns it now, OK?’

• Move to draw main developer into South Ocean dispute

• Controversial investor: Why ‘renege’ on my agreement?

• Confirms 384-acre property caught in legal action ‘halt’

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A controversial Austrian is moving to draw Albany’s principal investor into a multi-million dollar legal battle over his rival bid to acquire the neighbouring South Ocean resort property.

Documents obtained by Tribune Business reveal that Dr Mirko Kovats, a Lyford Cay homeowner with permanent resident status in The Bahamas since 2017, has gained a US judge’s approval to serve subpoenas on the Tavistock Group in a bid to uncover any communications with the Government over his own South Ocean development plans.

Tavistock Group is the primary vehicle for multiple worldwide investments by Bahamas-based billionaire, Joe Lewis, and is Albany’s principal developer. The two properties are south-west New Providence neighbours, and Dr Kovats says he is seeking to uncover why South Ocean’s current owner would “renege” on a purported 2014 deal to sell the 384-acre site to himself, ditching him in favour of a rival agreement with Albany’s investors.

The Austrian’s filings detail how he has been able to “halt” Albany’s plans to develop South Ocean, one of New Providence’s last remaining large-scale resort parcels, by initiating legal action currently before the Bahamian Supreme Court against the property’s current owner/vendor, the Canadian Commercial Workers Industry Pension Plan (CCWIPP).

“I have been able to halt the purchase and development of the property [South Ocean] by the Tavistock Group... for the time being by the filing of the legal action against the Canadian pension plan and its trustees,” Dr Kovats alleged in a January 13, 2023, filing with Florida’s middle district court.

Setting out the rationale for seeking to serve subpoenas, he claimed: “I believe it would be relevant to this litigation to discover what, if any, communications Tavistock Group may have had with the Canadian pension plan such that it would renege on the purchase agreement that Bahamas Island Consortium had with it, and eventually lead to the agreement that was subsequently entered into between the Canadian pension plan, Tavistock Group and the other joint venture partners more recently to develop the South Ocean property.

“I believe that the Tavistock Group may have been in communications with the Bahamian government such that they [the Government] have linked the approval of the Treasure Cay property development with demands on me to scale back on my development plans for the South Ocean property to benefit and accommodate the Tavistock Group-owned Albany development.”

Dr Kovats’ conspiracy-laced inference was not supported by any evidence. The reference to Abaco’s Treasure Cay property alludes to the Judicial Review action, which he has already launched against the Government seeking an extraordinary $3.127bn in damages after it refused to grant the necessary approvals for that separate acquisition.

The Austrian is alleging that the Government is linking the two resort disputes together rather than treating them as separate issues. He claims that he has already slashed the size of his proposed South Ocean development by 60 percent, from 1,600 rooms to 640, “in order to accommodate” Albany.

US magistrate judge, Daniel Irick, granted Dr Kovats’ bid to serve the subpoenas on Tavistock Group on February 1, 2023, although he left the door open for the latter to subsequently challenge his order. The action was initiated in Florida’s middle district court on the basis that Tavistock Group is domiciled there.

Multiple sources have suggested that the Austrian investor often resorts to strong-arm legal tactics in a bid to obtain leverage in business disputes. He is alleging that a $70.5m deal to purchase South Ocean was agreed with CCWIPP on June 25, 2014, but that the Canadian pension fund subsequently breached a binding sales agreement by failing to consummate the deal.

Documents included among Dr Kovats’ Florida legal filings show South Ocean was subsequently placed back on the market, and advertised for sale, on March 28, 2017, by CBRE, the international real estate firm. Greg Cottis, the Austrian’s Bahamian attorney, submitted an “as is” offer to acquire the project for $21.25m, a sum almost 70 percent less than what he offered in 2014, on the April 28, 2017, bid deadline.

However, it apparently took Dr Kovats more than three years to find out his offer had been unsuccessful. He wrote to Paul Weimer, CBRE’s senior vice-president, on Friday, June 19, 2020, saying: “Having asked several times, but I never give up. Any news regarding acquisition? As you know, always interested. Let me knew.”

This drew a terse response from Mr Weimer, who said simply: “Albany owns it, OK, now.” Dr Kovats, though, in his January 2023 legal filings questioned why CCWIPP had ultimately ditched him for a new deal with Albany/Tavistock Group when he had beaten the latter out to be selected as preferred bidder in 2014.

“At the time of the original bidding for the South Ocean property in 2014, one of the competitive bids came from a joint venture between the Tavistock Group, which developed Albany, and Och-Ziff, the hedge fund and asset manager with over $40bn in worldwide assets,” the Austrian alleged. “As previously advised, my bid through Bahamas Island Consortium was selected as the preferred bidder, leading to the purchase agreement which the Canadian pension plan reneged on.”

CCWIPP, which is being represented by Graham, Thompson & Company, sought to have Dr Kovats’ action struck out on the basis it was “frivolous, vexatious and amounts to an abuse of the process of the court” because there was never any legally binding sales contract between the two for South Ocean. However, acting justice Tara Cooper-Burnside declined to do so and the matter is now headed for a full trial on the claim’s merits.

The concern here for The Bahamas is that prime tracts of real estate, extremely valuable for driving future resort development, investment and job creation, face being potentially tied-up for years in expensive, time-consuming court fights. The Canadian pension fund, which took over South Ocean after Ron Kelly defaulted on his loan repayments, then closed it in 2004 has been seeking to exit its last remaining Bahamas resort investment for almost two decades.

Besides Tavistock Group and Mr Lewis, Albany’s principals also include golfers Ernie Els and Tiger Woods, and singer Justin Timberlake. The Tavistock Group subpoena is merely the latest stop in Dr Kovats’ subpoena tour, which has already taken him to the Delaware and south Florida courts. In the latter, he has also persuaded a judge to approve subpoena service on Southern Cross and its affiliates, the group owned by Australian golfer, Greg Norman.

And, in Delaware, he is seeking to obtain evidence from CBRE and Electra America, the failed Grand Lucayan purchaser. The latter, through, its attorneys, indicated in February 1, 2023, court filings that it also intends to provide documents in response to Dr Kovats’ request. This newspaper, though, was told that Albany and its principals have not walked away from the deal, and are instead watching and waiting to see how the legal battle with the pension fund plays out.

Dr Kovats has attracted controversy in Austria throughout his business and investing career, despite building his publicly-listed industrial group, A-Tec Industries, into a conglomerate that once featured over 70 companies and more than 10,000 employees, with turnover pegged at more than one billion euros.

Numerous companies he was involved with early in his business career became insolvent, and Dr Kovats has faced numerous civil lawsuits during his business career, being criminally indicted twice. He was sentenced to six months’ probation in 2000 by the Vienna High Court over the bankruptcy of a nightclub he had invested in. Dr Kovats was also charged over another nightclub insolvency in 2007, although he was never convicted.

Tribune Business’s own research also found that Dr Kovats and a fellow executive were fined by Austrian regulators in 2012 for providing misleading information to the capital markets, thus harming investors. Following a two-year period of turbulence that began in 2011, A-Tec moved to restart business activities in 2013, after undergoing a reorganisation.

Comments

Baha10 1 year, 5 months ago

The print version of this Auricle was hard to follow this morning and now it is obvious why when comparing to Online version … no less than 28 lines are missing from where the Article broke from the Front Page of the Business Section … also are the repeated references to “controversial” not demonstrating reporting bias, much like the repeated mention of Kovats having received 6 month probation for something to do with a Night Club incident we know nothing about … compared to other Billionaires, if this is all he has in “his closet”, maybe we should direct him to one or more of the Casino Properties elsewhere in our Country, as he would appear “squeaky clean” to those we have welcomed and done business with over the course of the past 70 years … just saying!

Maximilianotto 1 year, 5 months ago

Isn’t this the guy who wrote „we are uncorrupt and unpolitical“? So he doesn’t understand how this place works? Just asking.

IslandWarrior 1 year, 5 months ago

Interesting, the battle of the 'God' is playing out in The Bahamas, right before our tiny 'poor eyes'; is anyone bringing hot popcorn?

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