The Tribune

• Seek injunction on Nygard Cay, Union Wharf proceeds

• Ex-minister, MP claim ‘more than 95%’ of bill unpaid

• Claim propeties collectively valued at some $84m

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Three Bahamian attorneys have acted to prevent Peter Nygard fleeing The Bahamas without paying a collective $14m legal bill for representing him in multiple court cases.

The trio, two of whom are an ex-Cabinet minister and former MP, are all seeking Supreme Court injunctions to prevent the accused sex trafficker from abandoning The Bahamas - and themselves - by taking the multi-million dollar proceeds generated from selling his former Nygard Cay home and other real estate assets out of the jurisdiction without settling his debts.

Algernon Allen and Keod Smith, together with Carlton Martin, all allege that the troubled fashion designer has paid “no more” than five percent on separate seven-figure legal bills due to them. This is despite Mr Smith asserting, in his March 31, 2021, statement of claim that Mr Nygard could realise as much as $84m from selling off his remaining Bahamian property assets.

Besides alleging that Nygard Cay is “presently being sold” for $59m, Mr Smith and his two colleagues all placed a $25m valuation on Bay Street’s Union Wharf property while claiming that it was “believed to be beneficially owned” by the embattled Canadian tycoon who remains jailed in his homeland as he bids to fight extradition to New York over sex trafficking and other charges.

The Union Wharf property, which is presently listed for sale by multiple realtors including Mosko Realty, McCarroll Real Estate and HG Christie, was acquired in the mid-2010s by a Barbados company called Galaxy Group.

However, when the purported $10m purchase of Pioneer Shipping’s former home was revealed, it was immediately suspected that Mr Nygard was behind the purchase - not least because Eric Gibson, one of his Nygard Cay estate managers and brother of ex-Cabinet minister, Shane, was named as a Galaxy Group director.

The assertions by the three attorneys add further weight to the Nygard ownership claims, with the trio fearing the fashion designer is about to leave them holding these unpaid bills despite defending him in numerous legal battles brought by the Save the Bays environmental group and his Lyford Cay neighbour, Louis Bacon. 

Mr Martin, in his March 31, 2021, statement of claim, alleged that over the near three-year period from August 21, 2018, to now he had been place on a retainer requiring him to work nine hours per day for Mr Nygard over a 952-day period.

This translated into 8,568 hours at a rate of $1,000 per hour, which works out to $8.568m. “The plaintiff has not been paid more than 95 percent of his fees,” Mr Martin alleged. Assuming he has been paid for 5 percent of his work, this translates into an unpaid $8.14m legal bill.

As for Messrs Smith and Allen, they, too, allege they have “not been paid” more than 95 percent of their legal bills owing. Mr Smith, who said he was required to work five hours per day for 952 days, translating into 5,760 hours at a $750 rate, is owed $4.104m using the same calculation formula, while Mr Allen is due the least at just over $1.8m.

Collectively, the trio are owed around $14m in unpaid legal fees, hence their eagerness to ensure payment before Mr Nygard disposes of his remaining Bahamian assets and spirits the proceeds out of this jurisdiction to help fight his Canadian and US legal battles.

Mr Allen yesterday confirmed to Tribune Business that the legal papers obtained by this newspaper are genuine, and that he and the others had all filed actions on March 31 this year. The trio are all using the same law firm, C. A. Dorsett & Company.

Suggesting that these issues are typically resolved by out-of-court settlements without having to go to trial, Mr Allen nevertheless admitted “there’s some real concern” as to whether the trio will be paid given that Mr Nygard’s global fashion empire remains in the hands of receivers while the man himself is in a Canadian jail cell.

He added that they were “dealing with a client who is very highly compromised at this time, and may not have the ability to pay the fees, but for the sake of matters that are Bahamian we want to ensure the correct legal processes are in place to at least allow us to succeed if there’s any sale of property and the like.

“It’s been rather sad that it’s come to this, but that’s the reality of this situation. Unfortunately, there have been at least 14 other law firms which have experienced similar difficulties that I know of,” Mr Allen said, adding that the attorney trio were “not hovering like vultures” but simply seeking what was contractually due to them.

The three statements of claim, largely similar in nature, allege that the trio were all retained as members of Mr Nygard’s Bahamian legal team at an August 21, 2018, meeting at the Green Parrot restaurant on East Bay Street. All were to work together and communicate on various matters involving the fashion designer’s deepening legal woes.

Illustrating just how demanding Mr Nygard was as a client, they said he attended four four-hour meetings with the group at Mr Allen’s law firm where “special emphasis was put on the team working together and without distraction by other legal services or services unconnected with the retainer”.

However, payment issues swiftly emerged. Both Mr Martin and Mr Smith said that while they were paid for the first seven months of their retainers, the sums received fell short of what was due, and in the former’s case there was “at least a $2,000” gap.

Despite pressing for further payments they allege their efforts have been unsuccessful, even as Mr Nygard’s Privy Council appeal against his committal to jail for contempt of court is now “at stake” - an action that is estimated to cost a further $3.5m in legal fees.

Mr Smith, calling for payment of his legal fees to be secured or guaranteed, said: “This securing of fees should be done out of the proceeds of sale of Nygard Cay, which is presently being sold at about the price of $59m.

“The purpose of the sale of Nygard Cay is, among others, to put the defendant [Nygard] in a financial position to be able to pay the fees of his legal teams in Canada and the US with respect to his extradition proceedings in Canada and the prosecution of his racketeering proceedings in the US.”

The latter case, Mr Smith said, was intended to vindicate Mr Nygard’s assertions that he was the victim of false claims or charges being brought against him. And, besides Nygard Cay, Mr Smith said the fashion tycoon’s other remaining Bahamian asset is “a prime tract of waterfront land about 1,000 feet east of the junction of East Street and Bay Street, which is not in the name of the defendant and is on the market for sale”.

This, is Union Wharf, which Mr Smith and his fellow attorneys all said has “an approximate value” of $25m. “This property is in the name of a company [Galaxy Group], the issued shares of which are believed to be beneficially owned by the defendant,” Mr Smith asserted.

“Consistent with the defendant’s active intention to sell off all his real estate holdings in The Bahamas, the defendant is aggressively seeking a sale of this last parcel of land he holds in The Bahamas.”

The valuations attached to Mr Nygard’s assets seem somewhat high, especially given that realtors are listing Union Wharf at $15m. And Save the Bays, which is also seeking to seize Nygard Cay and sell it to settle legal fees it is owed, had that property appraised for just $14m in late 2018.

However, this newspaper subsequently revealed that a Bahamian real estate company briefly showed Nygard Cay on its website with a massive price tag of $59m. The listing, though, was very quickly taken down.

Mr Smith, meanwhile, and the other attorneys all voiced fears that Mr Nygard “would never pay his fees” unless the Supreme Court intervenes. Besides an injunction on transferring any sales proceeds outside The Bahamas before the legal fees are settled, they also want the sums owed to be set aside in a Bahamian bank account that is under their joint control and that of Mr Nygard.

Mr Smith’s statement of claim, which alleges he never received a single cent from Mr Nygard in 2020, and last received a payment in 2019, also details the legal work he performed for the fashion tycoon since first being hired in 2010.

Besides defending Mr Nygard against Save the Bays, it also details how Mr Smith was to go on the offensive against the former’s perceived enemies, including his arch nemesis, next door neighbour Louis Bacon.

Mr Smith was to receive “a bonus if he were to able to figure out the basis for saving Nygard Cay from being quieted [acquired] by Bacon or seized by the Bahamian government on the basis that Peter Nygard had illegally expanded Nygard Cay”.

The former PLP MP was also tasked with proving that Mr Nygard had received legal permission from the Government to expand his home, as well as coming up with evidence that Mr Bacon was guilty of doing the same without approvals.

And Mr Smith was also charged with “conceiving the basis of a criminal complaint against Louis Bacon and 159 others addressing a conspiracy to injure Nygard”.