A US company seeking to enforce a $192 million (€175 million) judgment against a billionaire Swiss-Lebanese investor has set its sights on his Co Kerry hotel and islands.
On Tuesday Dublin’s High Court granted permission for MCG California LLC to serve its proceedings on Jacqui Safra at his Parknasilla Hotel in Kenmare, Co Kerry.
MCG wants the court to recognise and enforce a judgment it obtained last October against Mr Safra from the New York Supreme Court for $192 million plus interest, less payments received.
The sale of Mr Safra’s winery business, called Spring Mountain Vineyard Inc (SMV), subsequently netted the California firm $32 million, it says.
The judgment arose out of Mr Safra’s guarantee of 2018 loans to SMV from various lenders for whom MCG acts as administrative and collateral agent, MCG claims in its legal papers.
Following SMV’s default on its repayment obligations in October 2021, MCG says, Mr Safra agreed to consent to entry of a judgment against him by the New York Supreme Court for the full amount owed. However, the lenders agreed to forbear from exercising remedies available to them until September 30th, 2022.
On September 29th 2022, SMV voluntarily filed a Chapter 11 petition, commencing a bankrupcty reorganisation, in a California district court. A week later MCG filed papers to secure its judgment against Mr Safra, who is also known as Jacob E Safra.
MCG says Mr Safra provided a personal financial statement last September that put his net worth at $510 million. However, MCG does not accept he made a full or accurate disclosure of all of his assets.
MCG says it has “acute concerns” his assets are reducing in a manner not fully explained.
It appears, claims MCG, that the value of his assets fell by about $81.2 million from last October to March, which still leaves him with more than $1 billion in assets. The plaintiff firm alleges Mr Safra’s cash on hand reduced by $1.675 million in the first three months of this year.
Mr Safra has also “failed to provide explanations for the significant diminution” in the fair market value of his three Irish assets, MCG claims.
The fair market value of his equity in Parknasilla Hotel has, according to Mr Safra’s financial statements, dropped by almost $6 million since last September, while his equity in Garinish and Rossdohan islands have seen reductions of $914,000 and $895,000 respectively, the plaintiff alleges.
MCG claims it has seen documents showing that assets and valuables have recently been shipped to Ireland on Mr Safra’s behalf, suggesting there may be other items of art or furniture of “substantival value” in Ireland.
MCG’s barrister, Alison Keirse, told the Dublin High Court on Tuesday that the New York judgment is final and conclusive. Her client wants the Irish court to recognise the judgment in this jurisdiction as Mr Safra, she said, has given his private Garinish Island, off Sneem, as his residence.
Ms Keirse said Mr Safra has frequently stated this address on formal documents, including on the share register of Encyclopaedia Britannica Holding SA, which is Mr Safra’s holding company that owns the famed encyclopaedia publisher.
A private investigator has attested to it being impracticable to attempt to serve Mr Safra on Garinish Island, which he has owned for 20-25 years, as anyone who goes to the island without permission will be asked to leave.
Mr Justice Denis McDonald said it was “quite clear” from the evidence before him that there is a good case to be made that the New York judgment is conclusive and final. MCG established there are “good, arguable grounds” for concluding that Mr Safra is ordinarily resident in this State.
The evidence presented by MCG also allowed the judge to conclude Mr Safra has “very substantial assets” in Ireland, albeit held through various intermediary companies based abroad. He said there is a “good, arguable case” that Ireland is the “more convenient forum” for MCG’s claim to be made.
The judge noted that Mr Safra was not in court and may, in time, seek to rebut the claims made by MCG.
He made orders permitting Mr Safra to be served personally at his Kenmare hotel, by email and at addresses in New York.
