The Tribune

• By fashion mogul targeting Bahamas financial provider

• Claims ‘trickery’ cost him once-$40m yacht ownership

• $10m Nygard Cay ‘credit’ bid branded as non-starter

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Accusations that Peter Nygard “fraudulently” sought to seize assets he does not own have been exposed by a legal claim against a Bahamian financial services provider involving a once-$40m yacht.

The fallen fashion mogul, who is next week due to stand trial in Canada on multiple sexual assault charges, is alleging that IPG Family Office and its president and chief executive, Andrew Law, created a trust structure that was ultimately used to “wrongfully” remove him as the Mirage’s owner.

The rambling complaint, filed in Florida’s Broward County Circuit court on July 19, and which appears to have either been written by Mr Nygard himself or at least dictated by him, provides no real evidence or cause of action to back-up his demand that the yacht be returned to his possession although it frequently employs lurid language.

Potentially far more revealing, though, is a letter from the attorney representing the trusts at the centre of the dispute with Mr Law and IPG. Filed with Mr Nygard’s complaint, it asserts the fashion mogul has been attempting to seize or lay claim to assets he does not own in a bid to “deceive” the New York federal courts - where he still faces sex trafficking and racketeering charges - that he has sufficient means to support a bail application.

The letter alleges that the Canadian sought to raise a $10m credit line secured against his Nygard Cay property at New Providence’s northwestern tip, even though this was a non-starter due to the multiple liens and Bahamian court enforcement actions against it. It added that Mr Nygard’s claims to own property in Marina Del Ray, California, were “directly contradicted by years’ worth of his claiming Bahamian residency for beneficial tax purposes”.

Jason Masimore, an attorney with Kobre & Kim (UK), also set out in great detail why the former fashion mogul, who claimed he gave $5m to the Progressive Liberal Party’s (PLP) 2012 election campaign, had “no legal, beneficial [ownership] or other interests whatsoever” in three disputed trusts - the Elsinore Trust, Nygard Foundation and Hilkka Discretionary Settlement.

While all three had been “settled” by Mr Nygard, meaning he contributed the assets they contain, his role and status had changed sharply since this occurred. The Elsinore Trust, which was settled as an irrevocable discretionary trust on June 5, 2017, “expressly excluded” the fashion mogul from being a beneficiary or “obtaining any benefit directly or indirectly from it”.

The Nygard Foundation, declared on March 17, 2015, was an irrevocable charitable purpose trust where Mr Nygard resigned from the Board on April 1, 2020, amid mounting legal woes. The final of the three trusts, named after Mr Nygard’s late mother, had “excluded” him as a beneficiary on March 22, 2020. He had also resigned his directorship with the trustee, and status as a council member with the trust’s protector, both on December 22, 2019.

Kobre & Kim’s letter to Mr Nygard’s attorneys explained that trustees for the three trusts had declined to provide financial and other information on their status because the fashion mogul had no direct connection to them. “However, because of some of Mr Nygard’s recent actions about which you might be unaware, we also wanted to provide you some additional information,” Mr Masimore wrote.

“Recently, through various surrogates, Mr Nygard has been attempting to obtain assets to which he is not entitled.” These included the California-based Marina Del Ray property known as 1 Yawl Street, which the US federal authorities had deemed unfit for use as bail security since it had been identified as an asset for seizure if Mr Nygard is convicted.

“Mr Nygard falsely claimed in these communications that 1 Yawl Street is ‘where I have lived for the last 35 years of my life’. Not only is this false as a factual matter, but we understand it to be directly contradicted by years’ worth of his claiming Bahamian residency for beneficial tax purposes,” Kobre & Kim’s Mr Masimore added.

The letter detailed alleged efforts by Mr Nygard to claim, or take possession of, other assets to aid his legal battle including a $10m fund that did not exist. Then it added: “Mr Nygard has proposed a line of credit of $10m to be issued to him against Nygard Cay. Obviously there is no basis to issue a line of credit, as this property is subject to local enforcement proceedings.....

“We have no choice but to understand Mr Nygard’s confusing and untruthful communications as part of a fraudulent scheme to create the appearance of availability of various assets in support of a bail application to the US court similar to the misrepresentations he and his prior representatives made during his Canadian bail proceedings.”

That hearing saw the Canadian court find that Mr Nygard had paid-off a witness to provide false deposition evidence, and that he had threatened another “that if she was not on his side she was ‘going down’”. Mr Masimore concluded: “Mr Nygard should understand in no uncertain terms that the trusts and the individuals affiliated with the trusts are committed to ensuring that neither he, nor anyone acting on his behalf, obtain or use the trusts’ assets.”

Meanwhile, IPG’s Mr Law, a former managing director of Credit Suisse Trust (Bahamas), and also an ex-Association of International Banks and Trusts (AIBT) chair, declined to comment on the Nygard lawsuit when contacted by Tribune Business yesterday.

He explained via e-mail that neither himself nor IPG (International Protector Group) had seen or been served with the complaint. That is supported by the Broward County court docket, which shows that only Derecktor Florida, the boat yard where the Mirage is presently located, has been served with the necessary papers.

It is unclear whether the Broward County court has jurisdiction over Mr Law and IPG, whose Bahamas office is based in eastern New Providence at the Montague Sterling Centre. It specialises in estate and inheritance planning, helping to assist financial intermediaries in structuring their clients’ affairs, and provides so-called “protector services” to help watch over trustees and ensure settlors that trust assets are being properly managed.

Mr Nygard, meanwhile, is alleging that the Mirage - which he claims now has “a fair market value of less than $1m” after being valued at $40m just five years ago in 2017 - was snatched from his ownership “by means of trickery” via the trust structure created by Mr Law and IPG.

Asserting that he had “considerable wealth at the time”, the fallen fashion mogul and his attorneys are alleging that events leading up to the loss of the yacht’s ownership are “shocking” although this contention is not supported by evidence.

The lawsuit goes on to make colourful allegations such as “the slippery and opaque rules of trust management”; that the trusts had “become nothing but a playground for the trustee and his agents”; and that the case provides “a small glimpse into the Kafkaesque world of trust management”.

However, the only evidence Mr Nygard provides to assert his ownership claim are the yacht designs produced under his instructions and money, and the fact that the Florida repair yard took orders from himself. The yacht is now said to be “in a state of disrepair/disassembly”.

Whether the fashion mogul is again trying to claim an asset he has no ownership interest in, or rights to, is something the Broward Court will have to determine. However, he seemingly does not understand that, once a trust is settled, the settlor typically gives up control of the underlying assets as the price for obtaining the tax advantages. And Kobre & Kim’s letter makes clear he has already relinquished all roles and relationships with the three trusts.