Lloyds Banking Group sued over Apprentice star’s failed property empire

Posted: July 9th, 2010

A lawsuit has been filed in the US claiming that Lloyds Banking Group convinced property tycoon Paul Kemsley, best known for appearing on television show The Apprentice as one of Sir Alan Sugar’s guest interrogators, into transferring control of his property empire to the bank in exchange for him being released from a £23.1 million personal loan.

The lawsuit has been filed with the New York Supreme Court by the property tycoon’s former partners, Alan Wildes and Scott Pudalov, according to a report in the Telegraph newspaper.

The pair were once property agents with CB Richard Ellis and had been brought into Kemsley’s empire to identify New York properties to acquire.

However, the businessman’s Rock empire fell into administration in May 2009, owing HBOS, now owned by Lloyds, a staggering £450 million.

Wildes and Pudalov claim that Lloyds “released” Kemsley from his substantial personal loan in exchange for seizing control of his property portfolio, which was then put into administration, and in doing so, unlawfully forced them out of a share of any US assets. They claim this cost them a profit from any future sale.

The pair are now trying to stop Lloyds and administrator PricewaterhouseCoopers from selling Kemsley’s former properties and are also claiming damages from Lloyds.

Rock Investments was founded in 1995 by Mr Kemsley and once had a property portfolio of £850 million, with assets including Selhurst Park football ground in the UK and a number of offices on New York’s Fifth Avenue.

Mr Kemsley resigned as director on the day the empire fell into administration

At the time of going into administration, PricewaterhouseCoopers said that it could take a “number of years” to secure value from the portfolio, with unsecured creditors said to be “unlikely” to receive anything.

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