Russian-Israeli oligarch fights former business partner

Billionaire says partner reneged on business arrangements.

MICHAEL CHERNEY 311 (photo credit: Courtesy)
(photo credit: Courtesy)
LONDON – Israeli businessman Michael Cherney began proceedings against a former business partner in the High Court of Justice in London last week The five-day trial is set to end on Tuesday.
The Russian-born billionaire says that US businessman Frank Neuman reneged on business arrangements in which Cherney would acquire prime real estate in the UK with Neuman taking legal possession of the properties.
Cherney accuses Neuman of selling the portfolio of properties without his consent, and though the American businessman repaid the amount Cherney paid for the property, of keeping the profits, said to be around $10 million.
The properties are said to include a renovated former hotel known as Draycott House, near the prestigious Sloane Square area of London, and a development on Arlington Street, close to the Ritz Hotel in Piccadilly, central London.
Neuman says that as the legal owner of the properties, he had the right to sell them. More so, he maintains that Cherney loaned him the money and that he paid him back the full amount.
The American businessman accuses Cherney of using information obtained in the case for purposes other than for the proceedings.
Before the trial, the judge imposed a proprietary injunction on Neuman and ordered him to disclose details on the funds relating to the properties.
Estates Gazette, a weekly commercial property publication, said that Neuman submitted the relevant documents to the court and later claimed that an anonymous letter he received from Spanish judicial authorities included some of the documents he handed in.
Neuman accuses Cherney of disclosing the documents.
Neuman’s lawyer, Thomas Beazley, Queen’s Council, said the application against his client was “an exercise in brazen nerve” and accused Cherney of “absolutely blatant abuse of documents received pursuant to a disclosure order.”
Cherney’s lawyer, Philip Jones QC, accused Neuman of “deliberately dragging his heels” in disclosing information relevant to the dispute and putting forward a “simply incredible” story as to where assets had gone.
He added that any breach of court procedure by Cherney was not done intentionally and concerned “entirely peripheral and irrelevant” matters.
Cherney is giving evidence via video link from Israel, as he is subject to a European arrest warrant issued in Spain in May 2009.
The warrant would force police to arrest Cherney if he came to the UK.