Candys at war with troubled Icelandic bank

A BITTER dispute erupted today between Nick and Christian Candy and troubled Icelandic bank Kaupthing over control of the former Middlesex Hospital site in the West End and a development in Beverly Hills.

The brothers' development vehicle, CPC, last week terminated its joint ventures with Kaupthing on both projects after the bank was nationalised by the Icelandic government.

CPC said it would take full control of the sites because the fate of the bank amounted to a default under their shareholder agreements on both projects. But Kaupthing said it will fight the move.

Mike Samuels, Kaupthing's head of real estate in the UK, insisted the bank was still solvent despite being nationalised and that it continued to own 60 per cent of the stakes.

"The termination notices have been refuted by Kaupthing as it remains a solvent company," he said.

But a spokeswoman for the Candys said the joint ventures were terminated "on grounds of the appointment of a receivership committee" at Kaupthing in Iceland and the "appointment of administrators" at Kaupthing Singer & Friedlander in the UK.

"Members of the CPC Group have also taken the opportunity to exercise the options to purchase the shares held by Kaupthing Bank in such companies afforded to them in the event of such circumstances," the spokeswoman added.

The Beverly Hills site is part-owned by restaurateur and nightclub owner Richard Caring and is in the celebrated 90210 area of the Los Angeles suburb.

The Middlesex Hospital site is branded "Noho Square".

Although the two sites cost £425 million, the Candy brothers last week moved to get Kaupthing's equity stakes for far less because of falling values for development land and the bank's predicament.

It was also reported that new investors were being sought by Nick Candy and that a new shareholder is expected to join the Beverly Hills scheme in the next month.

Also last week a £209 million loan from Credit Suisse for the Beverly Hills project was up for repayment. Nick Candy said this had not yet been resolved, but expected to secure an extension.

The eight-acre Beverly Hills site was bought in April 2007 for £250 million and planning consent was granted in April for more than 200 condominiums in two towers, but the US property market has taken a devastating hit since then.