The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Legal threats have slowed the sale of around $30m worth of Bahamian real estate that was acquired by the collapsed FTX crypto exchange’s property affiliate, it has been revealed.

The liquidators for its Bahamian subsidiary, in their latest report to the Supreme Court filed earlier this week, revealed that Ocean Terrace on West Bay Street east of Caves Village, as well as property at Old Fort Bay and the One Cable Beach development, are all the subject of potential legal proceedings although the latter appears headed towards resolution.

Brian Simms KC, the Lennox Paton attorney and partner, and the PricewaterhouseCoopers (PwC) duo of Kevin Cambridge and Peter Greaves, who are collectively overseeing the winding-up of FTX Digital Markets, described each case as “ongoing disputes which, though not yet formally commenced, are being addressed by the joint official liquidators and may result in court proceedings”.

In the case of Ocean Terrace, they said: “The joint official liquidators are aware of an allegation regarding a trespassing claim relative to all that ‘piece, parcel or lot of land containing 60 acres [including] Ocean Terrace (east of the Caves), West Bay Street” and demanding the joint official liquidators vacate the same.

“The joint official liquidators consider such claims, including the assertion of interest in the Ocean Terrace property, to be wholly unmeritorious and vexatious in nature. The joint official liquidators are considering taking legal action on behalf of FTX Property Holdings to ensure that any sale of the Ocean Terrace property can proceed securely and without interference.”

Tribune Business understands that one of the Ocean Terrace claimants is Dr Fabrizio Zanaboni, who headed Stellar Energy, the waste-to-energy entity behind a proposal for the New Providence landfall that was at the heart of the Renward Wells Letter of Intent (LOI) saga. Dr Zanaboni has launched legal action in relation to Ocean Terrace before.

The Old Fort Bay property, meanwhile, is understood not to be the house acquired for the parents of now-jailed FTX founder, Sam Bankman-Fried. “By a conveyance of May 19, 2022, Lots 5A and 5B in Old Fort Bay, Fincastle Island, were purchased by FTX Property Holdings for the sum of $9m,” the Bahamian liquidation trio wrote.

“By a letter dated January 31, 2024, the joint official liquidators were notified of a claim made on behalf of Burchfield Universal, which contests the title held by FTX Property Holdings. Burchfield asserts that the sale and conveyance by Old Fort Bay Company to the sellers in 2014 is void insofar as it relates to Lot 5B, on the basis that Lot 5B was included in Lot four.”

Burchfield is alleging that lot had previously been sold and conveyed by Old Fort Bay Company in 2007 to Burchfield. “Accordingly, Burchfield asserts that FTX Property Holdings has no title to Lot 5B, as the developer - and, subsequently, the sellers - had no title to Lot 5B that they could sell, given that land had already been sold to Burchfield,” the liquidators added.

“Burchfield has threatened to commence proceedings for possession, trespass and mesne profits. The joint official liquidators contest the merits of Burchfield’s claim, and are considering their legal options. The joint official liquidators have been in continued correspondence with Burchfield in connection with this matter.”

As for One Cable Beach, Mr Simms and his colleagues added: “On April 25, 2024, the One Cable Beach Association filed three fixed date claim forms in relation to arrears connected to three units nominally owned by Nishad Singh, Samuel Bankman-Fried and Zixiao Wang.

“The company considers that these units are properly assets of the company. The joint official liquidators have resolved the claims in relation to Units 209 and 112, and are in the process of seeking to resolve the litigation regarding Unit 311...”

Given that FTX Property Holdings paid $17.435m to acquire Ocean Terrace, and the One Cable Beach apartments were valued between $975,000 to $1.54m, when the $9m spent on the Old Fort Bay property is factored in it appears around $30m of the $256.3m worth of real estate acquired by the failed crypto exchange has been caught up in legal disputes.

Meanwhile, the FTX Digital Markets liquidators revealed which realtors it has selected to market and sell a property portfolio that is roughly 40-strong. They disclosed that sales agreements have already been signed for some properties, although they did not disclose which, and added that real estate is being released for sale gradually to avoid “flooding” the high-end market.

Bahamas Sotheby’s International Real Estate and Graham Real Estate will handle all the units at Albany, while Bond Realty will deal with those at One Cable Beach. Better Homes and Gardens Real Estate MCR Bahamas will handle all the units at GoldWynn, while HG Christie deals with Ocean Terrace and Blake Road and Morley Realty disposes of the units at the Veridian Corporate Centre.

“By the deadline of March 1, 2024, the joint official liquidators had received a total of 23 expressions of interest to act on behalf of FTX Digital Markets in relation to the sale of real estate,” Mr Simms and his colleagues wrote.

“After screening out unsuitable parties, the joint official liquidators issued a detailed request for proposals to suitably qualified realtors that responded to the [expressions of interest], requiring comprehensive information about the realtors, their credentials and sales history, proposed listing strategy along with details on commission structures and other terms of business.

“After careful consideration and assessment of all proposals received by the deadline of May 21, 2024, the joint official liquidators notified all respondents on whether or not they had been successful with their proposal, and subsequently have entered into, or are in the process of entering into, contracts with the selected brokers to represent the joint official liqudators in the marketing and sale of each property,” they added.

“The joint official liquidators are currently in the process of working with the aforementioned listing agents to prepare the marketing materials and to list the properties for sale. The joint official liquidators have also engaged an independent valuer to provide appraisals for each of the properties to assist the joint official liquidators in determining the respective listing prices based on current market conditions.

“As each of the individual properties becomes available for sale, the joint official liquidators will update the case website with details of the properties, listing agent contact details and links to the property listings. Several of the properties are currently under contract, with the agreements for sale having been executed. The joint official liquidators are gradually releasing properties in an effort to not flood the market.”

As for FTX Digital Markets’ other assets, the Bahamian liquidator trio added: “The joint official liquidators have continued to advertise for sale the remaining fleet of vehicles owned by FTX Digital Markets through consignment with local dealerships. As of the date of this report, the joint official liquidators have realised a total of $1.1m from the disposal of 39 motor vehicles owned by the company.

“The joint official liquidators have been assessing options to efficiently realise the various chattel assets owned by FTX Digital Markets currently held at its offices or in rented storage facilities, including computer and office equipment, as well as branded marketing materials and merchandise.

“It is anticipated that the realisation process will be implemented by the end of the 2025 first quarter, with details of the sales process to be shared via the case website.”