A New York resident is suing the Island's oldest bank, the Bank of N. T. Butterfield & Son and one of its clients, claiming that he was cheated out of $216,000 in dividends and other profits earned by a Cayman Islands-registered firm, it has been revealed by Web-based newsletter InsideBermuda.

Herbert Chestler, of Manhasset, New York, reportedly filed a lawsuit at New York State Supreme Court last November against Carole Clark, of New York City City and The Bank of N. T. Butterfield & Son Ltd., and Bank of Butterfield (Cayman) Ltd.

At the centre of the dispute is an "investment/trading company" called C&C Trading Co. Ltd. that was formed in Cayman on March 6, 1981 and had Butterfield as its agent, according to the complaint.

Mr. Chestler claims in the complaint that he and Mrs. Clark's now-deceased husband, Paul Clark, each owned 50 percent of the firm, which specialised in selling fabrics and cosmetics to wholesalers and retailers in Nigeria.

Although Mr. Clark reportedly "supervised the company's day-to-day operations", Mr. Chestler claims he was entitled to "share equally in all profits and distributions made by or on behalf of C&C Trading".

When Mr. Clark died in the early 1990s, C&C ceased trading and Mr. Chestler said he was "led to believe and understood that C&C Trading did not retain any significant assets and had no residual value or potential for future distributions to any of the shareholders".

However, he later found out that the firm had, unbeknownst to him, bought in 1990 and 1991 "certain notes" issued by the Central Bank of Nigeria which had a total face value of $611,703.

Mr. Chestler claims that he is entitled to half of the interest of approximately $432,000 that was paid on the notes from November 20, 1992 until November 30, 2001 at a rate of $12,000 per quarter.

All of the interest "was collected by The Bank of Butterfield on behalf of C&C Trading pursuant to a certain written authorisation purportedly executed by plaintiff, Paul Clark, Carole Clark, Elizabeth Clark and Jessica Clark on or about January 12, 1990", according to the complaint.

Mr. Chestler alleges that he is a victim of fraud that was started by Mr. Clark ? who is accused of forging Chestler's signature on a document ? and continued by Mrs. Clark after her husband's death.

Mr. Chestler claims he only learned of the alleged fraud after November 20, 2001, after which he unsuccessfully demanded that Mrs. Clark pay him at least $216,000 in allegedly unpaid dividends/profits.

Mr. Chestler's causes of action are breach of fiduciary duty, diversion and misappropriation against Mrs. Clark, negligence against the Bank of Butterfield and constructive trust and an accounting against all defendants.