A Squire Patton Boggs litigation team won a complex dispute over the ownership of a US$110 million building leased to the Radio Free Europe (RFE) in Prague. On October 19, 2017, the firm received a judgment from the Prague High Court confirming its earlier first-instance victory at trial against a bankruptcy trustee claiming ownership of the RFE building for the benefit of Czech billionaire and real estate tycoon Mr. Radovan Vitek.
The building was constructed by Orco Property Group, a prominent Central European real estate developer, under a built to lease agreement with a guaranteed rent income financed by the US Government. In May 2012, a group of US investors' special purpose vehicle, L88 Investments Prague, purchased the building from Hagibor Office Building, controlled by Orco. Wells Fargo financed the purchase price and Fidelity National Financial insured the title to the building.
In 2014, Mr. Vitek took over the Orco Group and had Hagibor claim invalidity of the May 2012 purchase. In September 2015, Hagibor filed for bankruptcy, which was controlled by Orco as Hagibor's largest creditor. The bankruptcy trustee, installed by Orco, included the RFE building in the bankruptcy estate.
L88 Investments Prague called on the title insurance, Fidelity. On behalf of L88 the firm filed a claim for exclusion of the building from the Hagibor's estate and engaged the bankruptcy trustee on several fronts.
In May 2016, the court of first instance agreed with the Squire Patton Boggs team's arguments and held that the May 2012 purchase was valid, after rejecting Orco's attempt to join the ownership dispute as a side intervenor. The trustee and Orco both filed appeals. The High Court first rejected Orco's appeal. After this decision was confirmed by the Czech Constitutional Court, it then confirmed the client's ownership and ordered the trustee to release the building back to our client.
The Squire Patton Boggs litigation team was led by Prague partners Danica Šebestová and Rostislav Pekař, and associate Ivan Chalupa, with New York partner Eridania Perez.