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A ruling is expected soon in a federal lawsuit that will decide whether a creditor can seize assets owned by affiliates of an insolvent company.
Last year, Northern Tankers (Cyprus) Ltd. obtained a $11.9 million judgment in U.S. District Court for the Southern District of New York against Greenwich business partners Magnus Lindholm and Adam Backstrom and Lexmar Corp. (Liberia), a bankrupt shipping company the two men own. Lexmar field for bankruptcy in Sweden in 1995 and has no assets to satisfy the debt, court papers indicate.
In a second action in U.S. District Court for Connecticut, Northern Tankers seeks to satisfy the judgment by seizing millions of dollars in assets of other entities owned by the partners. Those assets include the Greenwich Harbor Inn and other properties in Greenwich and Colorado.
The trial in the second action encompassed a period of several weeks between' October 1996 and March 1997 in the federal courthouse in Waterbury. The parties submitted post-trial closing statements April 14, and Judge Gerald Goettel is expected to hand down his decision within the next few months.
In closing statements, lawyers for Northern Tankers -New York attorneys John D. Kimball and W. Cameron Beard and Stamford attorney John W. Wall--claimed that Lindholm and Backstrom borrowed funds from the ship ping venture to finance real estate ventures and to maintain lavish lifestyles in Greenwich. The partners' fortunes changed suddenly in the fall of 1990 when their tanker ship ping enterprise floundered following Iraq's invasion of Kuwait.
At the time, Backstrom and Lindholm allegedly diverted to themselves more than $52 million in Lexmar accounts payable to an affiliated shipping entity known as Starlux. The intent, Northern Tankers claimed, was to keep the money from a growing number of Lexmar creditors, including the plaintiff.