The federal corruption charges filed against Oyster Bay Town Supervisor John Venditto will not affect the lawsuits brought against the town by creditors over disputed loan guarantees, according to the town’s outside counsel.
“We don’t expect that the allegations in the indictments would have any impact with respect to the determination on the case,” said the town’s outside legal counsel, Jonathan Pickhardt, of Manhattan-based Quinn Emanuel Urquhart & Sullivan LLP.
Oyster Bay has been sued by creditors of indicted restaurateur Harendra Singh — New York City-based Atalaya Asset Income Fund II LP and two subsidiaries of the Connecticut-based Phoenix Companies. They are seeking to enforce disputed loan guarantees on three defaulted loans. The debt including principal and interest and other costs was nearly $18 million when the suits were filed earlier this year, according to the complaints.
Federal prosecutors last week alleged that Nassau County Executive Edward Mangano pressured Venditto to execute the loan guarantees on behalf of Singh and that the two received bribes and kickbacks in return. Mangano and Venditto have pleaded not guilty.
In court filings on the suits, the town has said that Oyster Bay officials were not aware of the loan guarantees. In the case brought by Atalaya Asset Income Fund, the town said in a court filing that signatures of Venditto and parks commissioner Frank Nocerino on a document were forgeries.
Atalaya Asset Income Fund’s attorneys and a Phoenix spokeswoman did not respond to requests for comment Monday.
The town has argued that the disputed loan guarantees are invalid and unenforceable because they were not authorized by the town board and because state law prohibits municipalities from guaranteeing private debt.
“In order to have an enforceable contract, the town board has to authorize it and it has to be permissible under the state constitution,” Pickhardt said. “If either of those two things don’t exist then you don’t have an enforceable contract.”