The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The company purporting to own $22 million, which Czech authorities allege instead belongs to Lyford Cay financier Viktor Kozeny, has suffered at least a temporary setback in its efforts to take possession of the funds after its attorney failed to attend a New York court hearing.

New York Supreme Court filings, which have been obtained by Tribune Business, detail how attorneys for Landlocked Shipping, the Turks & Caicos company alleging that the $22 million belongs to it, failed to attend a hearing on its ‘motion to dismiss’ the case being brought by the Czech authorities.

Landlocked’s attorney, James Nesland, explaining why he missed the December 5, 2012, hearing, said he received no notification of the date because he had failed to file a ‘notice of appearance’ on the matter. And he also claimed that the New York courts had an incorrect e-mail address for him.

Mr Nesland is seeking a new court date on December 19, 2012, and detailed how events played out last week in his filings.

The documents said: “In fact, Mr Nesland only became aware of the hearing when he received a call from plaintiff’s counsel during the hearing. Apparently, the court had asked plaintiff’s counsel to contact Mr Nesland to inquire after his whereabouts.

“Mr Nesland explained that he had not received notice of the hearing, and asked counsel to convey this to the court along with his apologies. Counsel [for the Czech authorities] stated that he would ‘do nothing of the sort’, and said that he would only tell the court Mr Nesland would not be attending the hearing.

“Of course, since Landlocked’s attorney was not present, it is certain what was actually conveyed to the court.”

And Mr Nesland added: “Landlocked’s motion to dismiss involves the potential disposition of over $22 million. Counsel would not have missed the opportunity to present oral argument and respond to the court’s questions if he had received notice.’

Attorneys have previously denied that Mr Kozeny has any ownership interest in Landlocked Shipping, arguing that the $22 million - generated from the sale of a house in Aspen, Colorado - does not belong to him.

This newspaper revealed earlier this year how Harvard Holdings, the Czech entity Mr Kozeny is accused of asset stripping in the mid-1990s, had moved to seize the funds, which had been frozen in New York bank accounts.

Harvard Holdings had successfully obtained an Order to maintain the freeze until court hearings to determine the matter, fearing that the collapse of the US government’s efforts to extradite Mr Kozeny to face money laundering and bribery charges relating to the privatisation of Azerbaijan’s oil industry would result in their release to Landlocked Shipping.

The Czech authorities want the $22 million to help meet a $410 million judgment against Mr Kozeny in his homeland, but they face a fight to seize it.

Mr Nesland alleged in a series of earlier affidavits: “[Harvard] seeks to enforce the judgment against Landlocked on the grounds that it purportedly is Mr Kozeny’s alter ego.

“It is undisputed, however, that the funds belong solely to Landlocked Shipping Company, not Mr Kozeny.... Putting aside that Mr Kozeny is neither a legal nor beneficial owner of Landlocked, nor its alter ego,” the claim failed to meet New York’s Recognition of Foreign Country Money Judgments Act.

In legal arguments on why the New York court should unfreeze the funds, Landlocked’s attorney said the state’s southern district court had previously rejected the US government’s claim that Mr Kozeny was ‘the real owner’ of the company and former Colorado house.

Instead, Mr Nesland argued that Mr Kozeny’s mother, Dr Jitka Chvatik, was the “sole beneficial owner” of Landlocked and the house. He produced affidavits from both Dr Chvatik and Ervine Quelch, Landlocked’s Turks & Caicos administrator, to back this up.

“[Harvard] has presented no evidence from any witness with personal knowledge showing that Mr Kozeny is the legal or beneficial owner of Landlocked,” court documents allege.

“Thus, it has not shown that it probably will succeed in enforcing the Czech Criminal Judgment against Landlocked.

“[Harvard’s] claim that Landlocked is Mr Kozeny’s alter ego is based on 12-year-old, non-binding findings that a federal judge in Colorado made when he issued a preliminary injunction - that he later lifted - after his order’s key conclusions were disproved. Such ‘findings’ do not remotely satisfy [Harvard’s] burden to prove that it probably will succeed on its claim against Landlocked.”