A British property magnate is suing one of Spain’s biggest law firms over claims its poor advice cost him €213m (£183m).
Edgeworth Capital, a Luxembourg fund owned by Robert Tchenguiz, is suing law firm Cuatrecasas in a dispute over the sale of Santander’s headquarters on the outskirts of Madrid.
Mr Tchenguiz bought the building as part of a €1.9bn deal in 2008. However, the vehicle he owned the property through fell into bankruptcy, and he ended up selling the property back to the bank for €3bn in 2019.
Cuatrecasas advised on the deal, but Edgeworth Capital alleges the law firm failed to properly advise it about two rulings in Spain’s Supreme Court that would have affected the value of the building.
These judgments limited creditors from claiming interest on certain debts. Mr Tchenguiz owned Santander’s headquarters through a company that had debts at the time covered by the ruling. Edgeworth argued that it undervalued the properties because it was unaware the judgments could limit its liability for these debts.
Mr Tchenguiz claims Edgeworth would have sought €426m more for Santander’s headquarters had it been aware of the rulings. Edgeworth would have been in line for 50pc of that “windfall” and it is now seeking to recover the €213m from Cuatrecasas through a High Court claim.
Cuatrecasas said Edgeworth wouldn’t have gained any benefit if it had been advised of the Supreme Court rulings. Lawyers for Cuatrecasas said: “Almost every aspect of [Edgeworth’s] pleaded case is in issue.”
After moving to Britain in 1979 to flee the Islamic revolution in Iran, Mr Tchenguiz built a property empire with Vincent Tchenguiz, his brother.
Mr Tchenguiz lives in the Royal College of Organists’ building in South Kensington, opposite the Royal Albert Hall. He once owned Shell-Mex House on London’s Victoria Embankment, before selling the building for £490m in 2007.
Mr Tchenguiz embarked on plans last year to launch an ultra-exclusive private members’ club in Mayfair called The Leconfield, supported by Liz Truss, the former prime minister. Leconfield House is the former headquarters of MI5, which he bought for £140m in 2004.
His father was an Iraqi-Jewish jeweller who fled persecution in Iraq by moving to Iran, before ending up in the Shah’s inner circle running the country’s mint. He changed the family name from Khadouri to Tchenguiz after moving to the UK.
Mr Tchenguiz lost hundreds of millions in the 2008 crash, including through the collapse of Iceland’s Kaupthing Bank, and was subject to an investigation by the UK’s Serious Fraud Office (SFO) as a result.
No charges were brought. The SFO later paid Mr Tchenguiz £1.5m to settle a lawsuit brought by the tycoon.
Mr Tchenguiz also owns significant stakes in Sainsbury’s and Mitchell & Butlers, the pub company that owns Toby Carvery and All Bar One.
