The Sydney Harbour Foreshore Authority confirmed yesterday it agreed to pay $1.5 million to settle a legal dispute with a company associated with veteran impresario Kevin Jacobsen that formerly operated the Sydney Entertainment Centre.
But it denied rushing through the agreement just before the election that swept the Keneally government from office.
Public records of a company associated with Mr Jacobsen indicate the authority reached an agreement with Arena Management just before the March 26 election.
Arena was evicted as manager of the Sydney Entertainment Centre in August 2009 for allegedly breaching the lease, which it had held since the centre opened in 1983.
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"A settlement agreement was reached on 21 April 2011 and signed by Arena Management and Sydney Harbour Foreshore Authority, releasing the authority from all further claims," the authority said in a prepared statement yesterday.
But the records of a March 28 creditors' meeting for another company associated with Mr Jacobsen, Campbell Street Theatre, show that the authority had already made an offer and it had been accepted by that date.
The document reports that payment was due to be made the week following the election with more than $1 million of the settlement due to be paid to Campbell Street.
When contacted by the Herald yesterday Mr Jacobsen said details of the settlement were confidential.
He said the legal action was designed to claw back some of the $4.5 million Arena Management spent refurbishing the centre following a 10-year extension of the lease.
Mr Jacobsen previously blamed the high rent, maintenance costs, and the refurbishment expenses for his decision to appoint a receiver to Arena Management just days before it was evicted as manager.
Mr Jacobsen is caught up in a new battle to recover his share of the proceeds after a company associated with controversial businessman Ian Lazar appointed receivers to Campbell Street to recover money he is claiming as a secured creditor.
Mr Jacobsen denies giving the security to Mr Lazar's company.
Campbell Street's administrator John Sheahan said at the March meeting that if the claim was proven to be valid it was "very unlikely" that there would be any return for unsecured creditors.
Mr Lazar, who was formerly known as Ian Rogut, is a former diamond merchant and bankrupt. He is also the son of the respected former head of the North Shore Synagogue, Rabbi David Rogut.
The Australian Securities and Investments Commission wound up four companies associated with Mr Rogut in 2005 to "ensure that investors' rights and company assets are protected".