Oyster Bay officials are considering a settlement that would remove disputed loan guarantees to indicted restaurateur Harendra Singh one year after an agreement is signed with his former business partners and others.
The plan was outlined last week during a presentation to the town board by Oyster Bay’s outside attorney, Jonathan Pickhardt of Manhattan-based Quinn Emanuel Urquhart & Sullivan LLP. A group of investors in Singh’s former companies would pay the lender, The Phoenix Companies, $9 million, with the first $6 million paid over the next year, Pickhardt said. The Connecticut-based Phoenix Companies would forgive $5.6 million they claim they are owed.
“Assuming that the investors lived up to their obligation to Phoenix to make those . . . payments as of 12 months after the execution of the agreements, the town should be fully released from any claim,” Pickhardt said.
After Phoenix has been paid off, the town would be obligated under the proposal to pay for $1.8 million in capital improvements at the town-owned Woodlands catering hall and Tobay Beach, Pickhardt said.
Singh was charged in federal court on Sept. 9 with 13 felony counts, including bribing an Oyster Bay official to obtain $20 million in loan guarantees — the principal and interest on the loans. He has pleaded not guilty.
The town disputes the validity of the guarantees, and Supervisor John Venditto has sought a negotiated settlement rather than a court ruling. In February, The Phoenix Companies demanded the town pay $14.6 million because Singh’s companies had defaulted.
The proposal calls for a 25-year agreement, plus two 10-year extensions. Under those terms, the investors in Singh’s companies — S.R.B. Convention & Catering and SRB Concessions Inc. — could be operating the concessions for up to 45 years.
Pickhardt said the concessions agreements would be transferred to a new company to be created by the investors. That raised concerns from Councilwoman Michelle Johnson, who asked during last Tuesday’s board meeting if such a transfer could cause legal problems because of creditors’ claims on the current companies. The SRB companies the investors bought from the Singhs face millions of dollars in lawsuits.
Pickhardt said such a legal question should not be addressed in public.
Pickhardt last Tuesday acknowledged for the first time that the town is unsure whether millions of dollars of capital improvements Singh was supposed to have made at the Woodlands and Tobay Beach were actually made.
In 2014, the town board passed resolutions stating that an independent firm had confirmed that the SRB companies had invested $11.7 million in the facilities. However, Pickhardt told the board that the town is “comfortable” confirming that $6.7 million of work was done. He would not comment on the remainder.
Federal prosecutors have alleged that Singh diverted money borrowed for improvements at the town facilities for operating costs at his other businesses.
The investors at the Woodlands and Tobay Beach would continue operations at the current rent, in contrast to the town’s new agreement at Tappen Beach approved by the board last week, in which the concessionaire replacing Singh is expected to pay much higher rent than Singh’s company did.
Carlyle Caterers Management Corp. expects to pay the town $130,000 for the 2016 season at Tappen Beach, compared to the approximately $24,000 Singh would have paid. At the Woodlands, the investors would pay $74,784 for the first year, and $91,248 for the first year at Tobay Beach, with scheduled increases in forthcoming years.