PropertyAug 9 2017

Harlequin strikes settlement deal with accountants

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Harlequin strikes settlement deal with accountants
ByDavid Thorpe

Troubled overseas property company Harlequin Property has struck a legal settlement with the accountancy firm it once engaged, Wilkins Kennedy.

Wilkins Kennedy and the trustee of Harlequin Property have struck a legal settlement with ELS Legal, the law firm which has represented Harlequin chairman David Ames, in regards to the enforceability of a damages based agreement (DBA) between Harlequin Property and ELS Legal.

"Wilkins Kennedy and the trustee of Harlequin Property challenged ELS Legal over the enforceability of the DBA. If the DBA was found to be unenforceable there would be no costs and Willikins Kennedy would not have to pay legal costs. This is why it was challenged by both parties.

The conclusion of this latest court case is wholly separate to the original Wilkins Kennedy v Harlequin Property claim, in which the courts ruled last December that Harlequin won part of its case against Wilkins Kennedy, in a dispute that the accountancy firm was involved in a conflict of interest with a property developer hired by Harlequin.

This latest case was in relation to how much Harlequin's legal team should be paid under the DBA.

ELS Legal settled with Wilkins Kennedy and the trustee of Harlequin after both Wilkins Kennedy and the trustee backed down during trial. The settlement figures are confidential. The settlement does not relate to damages awarded by the High Court.

The total sum of costs paid by Wilkins Kennedy, taking into account legal costs to challenge the DBA, was not less than the original judgment, according to a spokesperson for ELS.

Trustees of Harlequin did not reply to a request for comment.

At the start of this year the former accountants of overseas property company Harlequin SVG had their bid to appeal against an $11.6m (£9.15m) ruling for damages turned down.

Wilkins Kennedy was seeking to overturn the ruling handed down in December 2016.

At the December hearing, the High Court ruled Wilkins Kennedy was partly responsible for losses arising from overpayments to the builder, ICE, a company the accountancy firm was also acting for at the same time as acting for Harlequin.

Wilkins Kennedy was retained by Harlequin between 2006 and 2010 to provide financial and business advice focused on helping to build and create the investment scheme’s flagship Buccament Bay Resort in St Vincent and the Grenadines.

Harlequin Property ran an unregulated property scheme sold by financial advisers, with UK investors ploughing £400m into the scheme, in the hope of earning returns of 10 per cent.

Around six thousand UK mainly pension fund investors were involved.

Harlequin Property was declared insolvent by David Ames, chairman of the Harlequin group, in St. Vincent and the Grenadines, in October 2016.

Representatives of Wilkins Kennedy have been contacted by FTAdviser for comment.