Business Wire

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


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:

  • Vitek and Ott violated at least three European and Luxembourg laws: the Takeover Bids Act (which requires any person or entity that acquires control of more than 33.33% of a company must offer to purchase all other outstanding shares), the Transparency Law (which requires anyone acquiring in excess of 5% to make a disclosure), and the Market Abuse Law (which makes it illegal to engage in insider dealing and market manipulation).
  • Rothschild & Co. was engaged by Orco Property Group to help examine strategic ways to raise financing and later to sell company assets. At the time the board of Orco Property Group selected Rothschild to be its adviser, Vitek, Ott and Rothschild failed to disclose the fact that Rothschild was already working for Vitek and Ott, helping them secretly acquire shares of Orco Property Group through shell companies, and attending secret meetings with Vitek and Ott in advance of board meetings. (Amended Complaint, Paragraphs 92-93, 105, 121, 237-243, 277, 279, 332)
  • J&T Banka gave tens of millions of Euros in financing to an entity owned by Lumir Safranek, a close personal friend of Vitek’s attorney, from the Czech Republic. Safranek is a registered private investigator with no apparent experience in investing in real estate. Nevertheless, J&T Banka provided him tens of millions of Euros in financing while never assigning him a client relationship manager. J&T Banka advised the CSSF it has no documents regarding Safranek’s introduction to the bank. As Plaintiffs observe in their amended complaint, “These are not the hallmarks of a legitimate banking relationship,” (Amended Complaint, Paragraphs 284-289, 449).
  • J&T Banka had close ties to new defendants Egnaro Investments Limited, LCE Company Limited, and Levos Limited—Cypriot shell companies that all used to be owned by J&T Finance Group and that the CSSF found worked in concert with Vitek to take control of Orco and ultimately acquire it at a substantial discount from its fair value. Each of these entities acquired less than 2.5% equity in Orco in an effort to avoid having to disclose their ownership stake, which helped conceal Vitek’s control of Orco from Kingstown Capital. (Amended Complaint, Paragraphs 169-170, 446-447).

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. (See 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.”


Contact information

Edward Evans
Director of Communications

About Business Wire

For more than 50 years, Business Wire has been the global leader in press release distribution and regulatory disclosure.

Subscribe to releases from Business Wire

Subscribe to all the latest releases from Business Wire by registering your e-mail address below. You can unsubscribe at any time.

Latest releases from Business Wire

European Commission Approves Darzalex®▼ (daratumumab) in Combination with Bortezomib, Thalidomide and Dexamethasone (VTd) for Patients with Newly Diagnosed Multiple Myeloma Who Are Transplant Eligible20.1.2020 21:43:00 EETPress release

The Janssen Pharmaceutical Companies of Johnson & Johnson announced today that the European Commission (EC) has granted marketing authorisation for Darzalex® (daratumumab) in combination with bortezomib, thalidomide and dexamethasone (VTd) for the treatment of patients with newly diagnosed multiple myeloma who are eligible for autologous stem cell transplant (ASCT). This approval is based on results from Part one of the Phase 3 CASSIOPEIA (MMY3006) study, published in The Lancet 5 in June 2019 and presented at the 2019 American Society of Clinical Oncology (ASCO) Meeting. “The effectiveness of first-line treatment is critical to maximise time until relapse. So, we asked ourselves, can we improve the standard of care that is bortezomib, thalidomide and dexamethasone (VTd) to provide patients with valuable extra time?” said Philippe Moreau, M.D., principal investigator and Head of the Haematology Department at the University Hospital of Nantes, France. “The CASSIOPEIA study answered that

Citi Private Bank Hails Fernando Alonso on His Impressive Maiden Dakar Rally20.1.2020 20:00:00 EETPress release

Citi Private Bank-sponsored motorsports legend, Fernando Alonso, has electrified his fans with his debut performance in one of the toughest motorsports-endurance events, the Dakar Rally. The multiple world champion finished fourth in the race’s final stage, and was the leading newcomer overall. This marked an impressive comeback from the difficulties he experienced earlier in the week, when his car suffered wheel and suspension damage, as well as a later double-roll crash. The annual Dakar Rally – now in its forty-second year – is an extreme off-road endurance race. This year’s edition consisted of twelve daily stages covering a total of 7,500 kilometers (4,600 miles). As well as a contest between some of the world’s top drivers, the Dakar Rally pits drivers against grueling terrains. In 2020, drivers faced the additional challenge of receiving information about the course on the mornings of certain legs of the race, rather than the day before. “Fernando’s tenacious performance in his

Keio Plaza Hotel Tokyo Hosts “Hina-Matsuri” Girls’ Doll Festival Art Exhibition20.1.2020 17:05:00 EETPress release

Keio Plaza Hotel Tokyo (KPH), one of Japan’s most prestigious international hotels located in Shinjuku, Tokyo, will host an event entitled “Hina-Matsuri Girls’ Doll Festival Art Exhibition” to help guests celebrate Japan’s cultural event known as Girls’ Doll Festival or Hina-Matsuri from February 1 to March 26, 2020. This highly popular event is held annually and displays some 6,800 magnificent and ornate hanging art ornaments made by hand from old silk cloth. These ornaments are carefully crafted for this exhibition and symbolically reflect the hopes for health and happiness of children. Also, peach flowers are featured as a theme for exhibition, concerts and workshops in this year’s event in keeping with the “Peach Festival” and the belief that peaches lead to longevity as they drive off evil spirits. This press release features multimedia. View the full release here: About 6,800 hanging ornaments, each one handmade from kimon

ResMed Introduces AirFit F30i, Its First Tube-up Full Face CPAP Mask20.1.2020 17:00:00 EETPress release

ResMed (NYSE: RMD) (ASX: RMD) today introduced AirFit F30i, its first tube-up full face CPAP mask, rounding out the most complete full face mask portfolio on the market. This press release features multimedia. View the full release here: AirFit F30i tube-up full face mask, front view (Photo: Business Wire) Full face CPAP users can now choose between a tube-up or tube-down connection, compact under-the-nose or traditional over-the-nose cushion styles, and even memory foam versus silicone cushion. AirFit F30i’s tube-up design makes it easier to sleep in any position. The cushion rests under the nose to help prevent next-day red marks, soreness, and irritation on the nasal bridge. Plus, a quick-release elbow allows users to quickly disconnect and reattach the mask from its tubing at night without taking the mask off. Three out of four CPAP users prefer AirFit F30i to its competitor’s tube-up full face mask for overall performance i

xx network Announces Support of Early Backers of xx coin Sale20.1.2020 17:00:00 EETPress release

The xx network has announced support of crypto pioneers, including Chris Larsen, for the initial Cayman sale of the xx coin starting on January 23, 2020. This press release features multimedia. View the full release here: xx network photo (Photo: Business Wire) The xx coin is a quantum secure digital currency designed to support and incentivize the decentralized ecosystem of the xx network, the revolutionary privacy-protecting blockchain led by David Chaum, founder of the Elixxir and Praxxis projects which underpin the xx network. Chris Larsen, a serial entrepreneur, co-founder of the Ripple Network and longtime advocate for consumer privacy, said, "David Chaum has been a defender of privacy in the digital world for almost forty years. I am proud to be an early backer and look forward to seeing this consumer-facing blockchain open the door to secure use by millions of individuals in their daily lives." Ownership and control of t

Wipro Positioned as a Leader in Networks - Software Defined Solutions and Services for UK and Nordics20.1.2020 16:56:00 EETPress release

Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO), a leading global information technology, consulting and business process services company, today announced that it has been positioned as a Leader in ISG Provider Lens™: Network - Software Defined Solutions and Services quadrant report for Nordics and the U.K. The reports were authored by Avimanyu Basu. ISG recognized Wipro after evaluating the capabilities of 153 providers across seven quadrants: Managed WAN Services; Mobile Network (4G/5G) Additional (non-core) Services; SDN Transformation Services (Consulting and Implementation); SD-WAN Equipment and Services (DIY); SDN Security Services; SD Network Technologies (Core), and SD Network Technologies (Mobile to Edge). Wipro has been named a ‘Leader’ in Managed WAN Services, SDN Transformation Services (Consulting & Implementation), SDN security services, SD Network Technologies (Core) and SD Network Technologies (Mobile to Edge) quadrant in the ISG Provider Lens™: Network - Software D

In our pressroom you can read all our latest releases, find our press contacts, images, documents and other relevant information about us.

Visit our pressroom