The owner of a Las Vegas luxury villa sued the youngest brother of the Sultan of Brunei and the Brunei government in hopes of overturning a Brunei court injunction that threatens to block the project's completion and impede the sale of the property and other assets.
Amedeo Vegas 1 Inc. of Wilmington, Del., filed a federal lawsuit last week against the Brunei government, Prince Jefri Bolkiah and the Brunei Investment Agency (BIA), the nation's international investment arm, after Brunei threatened Amedeo Vegas' management with imprisonment and fines if it didn't comply with a Brunei injunction that seeks to freeze the prince's assets worldwide.
The Brunei sultanate, located on the northern tip of the Southeast Asian island of Borneo, is trying to trace $40 billion in assets purchased with funds the sultan's youngest brother, Prince Jefri, allegedly misappropriated from the BIA and allegedly concealed during a period over 10 years through hundreds of different companies in at least five different countries worldwide.
Amedeo Vegas alleged Brunei's injunction issued on Feb. 21 by the Brunei High Court seeks to impose a constructive trust on the luxury villa at Spanish Gate and impose liens on Amedeo Vegas' other unspecified assets. It said it is seeking an order to declare the injunction invalid and unenforceable in the United States.
While Prince Jefri controls Amedeo Vegas 1, he was named as a defendant in Amedeo Vegas' lawsuit in hopes of clarifying title to the Las Vegas land, said Amedeo attorney John Callagy in New York.
The company also seeks an order to determine as quickly as possible whether the Brunei government has ownership rights to Amedeo Vegas' assets because the injunction has hurt its operations and hindered its "lawfully appointed directors and officers" from running the company.
Construction at Amedeo Vegas' 150,000-square-foot villa, described as a palatial mansion at 99 Spanish Gate Drive in Spring Valley, has stopped, Callagy said.
Amedeo Vegas said it could not fully investigate Brunei's ownership claims because the Arthur Andersen accounting firm, which prepared the BIA's reports, is prohibited under Brunei's laws from releasing the information.
"Brunei has no right to come in and enjoin Amedeo Vegas with an injunction issued in a foreign country and in secret, and (the defendants) have no right to establish a constructive trust in Brunei over the property in Las Vegas," Callagy said. "We don't believe the injunction is enforceable and the advisors of the Brunei government are aware of that too."
Amedeo Vegas said Brunei's injunction was invalid because the Delaware company isn't subject to the jurisdiction of the Brunei High Court and the injunction was entered without a public hearing being held.
David Boies, the defendants' New York-based attorney, could not be reached for comment.
Callagy said similar lawsuits were also filed last week by the owners of the New York Palace Hotel and the Hotel Bel-Air in Los Angeles seeking to lift the Brunei injunction, which they say is invalid and could hurt their operations.
Amedeo Hotels limited partnership owns the New York Palace Hotel, while Kava Holdings Inc. owns Hotel Bel-Air in Beverly Hills.
Brunei began secretive legal proceedings earlier last month against Prince Jefri following a $16 million loss suffered by the country's largest private company, Amedeo Development Corp.
The Brunei litigation, which named 72 defendants including Amedeo Vegas, Prince Jefri and his son, alleged the defendants hold countless properties in various countries around the world including luxury hotels such as the Plaza Athenee in Paris and the Dorchester Hotel in London.
Domino One Inc., another defendant, owns a home at 7030 Tomiyasu Lane, Paradise Tower in Las Vegas, the suit said.
Prince Jefri, who was Brunei's finance minister from 1986 to 1997 and managed BIA's funds, resigned in 1998 and was stripped of his post as head of the BIA after Amedeo Development, a company he ran, collapsed, causing a huge rift in the Brunei royal family and large dents in the local economy.
Amedeo Vegas also disputes the Brunei government's request for an inquiry into the company's finances and for an order subjecting Spanish Gate and other assets to the repayment claims against Prince Jefri. It also disputed a request to appoint a receiver to oversee the transfer of the company's property to the Brunei government.
Amedeo Vegas, which alleged it was threatened from retaining a Nevada counsel by Freshfields, the London solicitors of the Brunei government, said Freshfields "offered no explanation as to how the copy of a secret foreign decree could bind a Delaware company, restraining actions in Nevada."
The suit said Brunei's injunction appears to dissuade the plaintiff from spending money for normal business operations without advance permission from the Brunei government. The company said the injunction also allegedly restricts the activities of other Nevada residents and U.S. citizens who may have dealings with Amedeo Vegas.
The suit said the injunction could prevent Amedeo Vegas from paying its property taxes and insurance premiums on schedule and expose the company to uninsured liabilities and property losses. It could also hinder the company from prosecuting a tax assessment appeal proceeding -- in which hundreds of thousands of dollars in tax liability are at issue -- before the Nevada State Board of Equalization.
Amedeo Vegas said numerous Nevada workers, suppliers and utilities providers could lose their jobs and wages if the Brunei injunction succeeded in blocking the project's completion.
The company, which said it expects it will incur substantial costs to resume the project, is also prohibited from exploring offers for the Spanish Gate property, restructuring debt or taking out loans.
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