The Chief Justice placed Treasure Island Resort (Cayman) Limited into Compulsory Liquidation Friday following the application of Cayman Imports Limited, which is owed CI$54,034.
Supporting applications for the liquidation were received from Vigoro Nursery Ltd; Blackbeard’s Liquors, Bodden Beverages Ltd; A.L.Thompson Home Depot, International Travel, and Lions Community Centre.
At the time of the hearing Chris Johnson of Chris Johnson Associates Ltd., was appointed the Official Liquidator.
However, Scotia Bank appointed Receiver Mr. Jeff Coyne said the hotel’s sale is still going through and is literally days away.
‘I’ve no idea why the creditors wanted a Liquidator,’ he said.
He said all the assets are covered by the bank lien and remain in his hands. ‘It doesn’t change much of anything,’ he said.
The sale of the hotel is tied up in lots of legal process, but the court order says the bank can still sell it.
Mr. Coyne said it really does not matter whether there is a liquidator as he still will sell the property.
The Seven Mile Beach resort is in the process of being purchased by local business man Harry Lalli, his brother and brother’s wife, Amrit and Amy Gill of St. Louis, Missouri.
Mr. Coyne said that when the sale has gone through, he will render a final account and the secured creditor, Scotia Holdings Ltd., will be paid, but not in full. There will not be additional funds for unsecured creditors.
‘I would wish that it were different,’ said Mr. Coyne, ‘but I’ve been scraping the edges looking for money for the past year and a half.’
Mr. Johnson commented that he was disappointed that the creditors, who are believed to be owed over $2 million, have largely been ignored.
Mr. Coyne said this is simply not factual. Mr. Coyne said he had given his phone number freely to Mr. Johnson, who has never chosen to call him.
Mr. Johnson said he was informed that much of the money involved was credit advanced to the company immediately prior to the appointment of the receiver and much of it represented monies specifically used for the newly built night club.
‘It is unacceptable that these creditors who are largely Caymanian controlled companies are owed such a large amount of money without receiving explanations from the former management,’ he said.
Mr. Coyne agreed that what had happened before the receivership was put in place was tragic.
‘The former management got away with a huge, unanswered debt, but that’s not the fault of the bank, or the Receiver,’ said Mr. Coyne.
Mr. Johnson also said he believed the creditors have been very much kept in the dark – something he will look into as a matter of priority.
Mr. Coyne refuted this strongly, saying he meets with the creditors on a weekly basis and has met them regularly from his appointment on 4 September, 2003.
‘There is certainly no hidden agenda and I don’t understand how Mr. Johnson can make such a statement as he is new to the scene,’ said Mr. Coyne.
‘I really hope we can both work together to benefit the creditors,’ he said.
Mr. Johnson said Scotia Holdings Limited was the secured creditor for US$17,429,751 and were still owed money following the recent sale of the hotel. He recognizes the appointment of Mr. Jeffrey Coyne, the current receiver of the company and was looking forward to receiving his cooperation in the furtherance of his duties. In particular, Mr. Johnson said, he was looking for answers as to precisely how the company’s poor financial position came into being and as to why it was trading whilst insolvent. He also intended to ascertain whether the sale proceeds of the hotel represented a fair market value.
Mr. Coyne said ascertaining the sale proceeds of the hotel as representing a fair market value is not Mr. Johnson’s issue, as the court already made a sale order.
So far no creditors have been paid and Mr. Coyne said he was unable to provide a percentage for those creditors who would be paid. The pensions that had gone unpaid from before Mr. Coyne’s appointment are the only payments that have been given out.
Incidentally, Mr. Johnson points out that he was the receiver appointed by the Bank of Nova Scotia in the early 80s at which time a Canadian, William Becker, had commenced to build what was then called Paradise Manor, a hotel complex incorporating 96 condominiums. It was later sold by Mr. Johnson to a group of investors from Nashville that consisted of several country and western music celebrities.
Mr. Johnson is the former managing partner of PricewaterhouseCoopers, a position he held for 31 years until his retirement in June of last year. He has since incorporated his own firm of Insolvency Practitioners. Mr Johnson is perhaps best known for liquidating Guardian Bank and Trust Company during which time he commenced an action against the United States Government.
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