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Boies Schiller Flexner LLP Files Amended Rico Complaint on Behalf of Kingstown Capital Against Radovan Vitek and Others

November 29, 2019

NEW YORK--(BUSINESS WIRE)--Nov 29, 2019--

U.S.-based hedge fund Kingstown Capital Management, L.P., Investhold Ltd., and their affiliates filed a First Amended Complaint against Czech real estate mogul Radovan Vitek and others, including several new defendants. The amended complaint, filed November 22 in the U.S. District Court for the Southern District of New York, cites new facts that came to light in a report by Luxembourg’s financial regulator, among other things.

The new defendants include Martin Nemecek, the CEO of defendant CPI PG and a long-time employee of Radovan Vitek; Rothschild & Co., a financial advisor to Orco Property Group, which the plaintiffs recently learned was simultaneously working for Vitek and Jean-Francois Ott in connection with their plans to take control of Orco; and several additional companies and their beneficial owners who secretly worked with Vitek to acquire control of Orco, with funding providing by J&T Banka and J&T Finance Group.

Many of the new allegations in the amended complaint come from a previously non-public 2017 report of the Luxembourg financial regulator known as the Commission de Surveillance du Secteur Financier (“CSSF”). In this report, the CSSF made detailed findings of wrongdoing by Vitek and others, including that:

In addition to these new allegations, the amended complaint also contains additional information on Vitek’s contacts with the United States, including his use of and ownership of U.S. entities to perpetrate his fraud against the plaintiffs. The amended complaint alleges that Elypse Holding LLC, Mandragora Holding LLC, Axiom Holding LLC, and Justsay Holding LLC each listed Vitek as a named member, were all incorporated in Washington, D.C., and each had a registered agent located in Washington, D.C. (Amended Complaint, Paragraphs 67-72).

This contradicts Vitek’s declaration, signed under penalty of perjury and filed with the U.S. court, in which he claimed he had never done business in the United States. (S ee Kingstown Capital Management, L.P. v. Vitek, Case No. 19-cv-03170, Document No. 74: “I do not currently, nor have I ever, conducted any business activities in New York or anywhere in the United States.”).

Matthew L. Schwartz, a partner at Boies Schiller Flexner who represents the plaintiffs, said:

“The previously confidential report by Luxembourg’s financial regulator is a scathing indictment of Vitek and confirms his involvement in a pattern of illegal activity, which is further documented extensively throughout the amended complaint. The amended complaint contains a comprehensive picture of the defendants’ conduct, which directly injured Kingstown Capital and Investhold. While the defendants will surely make procedural arguments to try to avoid a hearing on the merits where they will have to answer some very hard questions, we look forward to presenting our evidence to a jury.”

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View source version on businesswire.com:https://www.businesswire.com/news/home/20191129005198/en/

CONTACT: Edward Evans

Director of Communications

BOIES SCHILLER FLEXNER LLP

212-446-2354

eevans@bsfllp.com

www.bsfllp.com

KEYWORD: EUROPE CZECH REPUBLIC UNITED STATES NORTH AMERICA NEW YORK

INDUSTRY KEYWORD: FINANCE PROFESSIONAL SERVICES COMMERCIAL BUILDING & REAL ESTATE LEGAL CONSTRUCTION & PROPERTY

SOURCE: BOIES SCHILLER FLEXNER LLP

Copyright Business Wire 2019.

PUB: 11/29/2019 07:28 AM/DISC: 11/29/2019 07:28 AM

http://www.businesswire.com/news/home/20191129005198/en