National Theatre asset in tax haven tug of war
A dispute dating back more than a quarter of a century, which has at its heart a property referred to as the “catering building” of the National Theatre in Prague, may finally soon be disentangled. The real estate, owned by Cyprus-linked insolvent firm Themos, is to go under the hammer in May, with a starting price of CZK 87m (EUR 3.2m). The price was set by Themos receiver Adam Sigmund on the instruction of Glory Daze, a secured creditor based in the British Virgin Islands that is unknown in the Czech Republic.
Glory Daze holds a legal claim on the building as the receivable in its possession originates from an Agrobanka loan taken out by Themos in 1994. State-controlled Agrobanka essentially folded in 1998, with a substantial part of it subsequently being transferred to GE Capital.
The 1980s property, along with the National Theatre’s New Stage [Nová scéna] wing, is valued by the auction at CZK 124m. The auction brokers are Prokonzulta.
Not even the building’s premium address will, however, guarantee that an auction buyer will be secured in the first round.
“The biggest chink in the armour here is the fact that it stands on land owned by a third party, namely the Community of the Roman Union of The Order of St Ursula. This will clearly affect the property’s future, both in terms of any refurbishment and actual use and its future marketability,” said Petr Vomastek, a real estate specialist in commercial properties.
Potential acquirers of the building could also be put off by an unresolved legal dispute over whether the building should be excluded from Themos assets under receivership. Although the Brno Regional Court last autumn rejected a petition from Themos’ ex-CEO Michael Petrův to make it an exception, the verdict is a long way from taking effect as the petitioner is appealing.
The building was nearly auctioned off as far back as 2001. Back then it was the National Theatre that initiated the proceedings in order to realise unpaid debts.
Themos managed to avert the auction by repaying some of the debts. The property has actually been embroiled in difficulties since 1990. In that year the Ursuline order obtained the building as part of a restitution settlement. It was later discovered that the transaction was cleared by mistake. However, the nuns in the meantime had sold the building to Themos.