Receivers appointed for the Ritz

Move won’t affect resort’s operations

Updated: The Cayman Islands government released a statement late Tuesday about the developments regarding the Ritz-Carlton, Grand Cayman.

“The Cayman Islands government had been advised of recent legal matters regarding The Ritz-Carlton Grand Cayman, prior to the 12 March, 2012 appointment of KPMG as receivers of the companies that developed and own the resort.

“The Cayman Islands government is confident in The Ritz-Carlton operation and the resort’s ability to provide the excellent service associated with The Ritz-Carlton brand.

“The Cayman Islands government also notes that The Ritz-Carlton welcomed a significant percentage of 2011 visitor arrivals, which represented the best stay-over visitor arrival figures in 10 years.”
 

The secured lender to the companies that own The Ritz-Carlton, Grand Cayman appointed joint receivers for the resort on Monday. 

RC Cayman Holdings LLC appointed Kris Beighton and Keith Blake of KPMG as joint receivers of Cesar Hotelco (Cayman) Ltd, CondoCo Grand Cayman Resort Ltd, Cesar Properties Ltd and CondoCo Properties Ltd, the companies that developed and own The Ritz-Carlton, Grand Cayman. 

KPMG said in a statement issued on Monday that the appointment of the joint receivers would have “no noticeable impact upon the day-to-day operations of the resort”. 

In addition, KPMG confirmed that The Ritz-Carlton Hotel Company would continue to manage and operate the resort. 

“The receivers intend to work closely with Ritz-Carlton to ensure that guests, visitors, owners and tenants continue to enjoy the five-star experience and service for which the resort is known,” the KPMG statement said. 

Ritz-Carlton developer Mike Ryan said he became aware of the appointment, which was done privately by the lender and not through the courts, on Monday morning. Through Tuesday morning, Mr. Ryan said he was not yet in a position to make a comment. The Ritz-Carlton Hotel Company’s Cayman management team also said it could not make any comment at this time. 

Although it does not affect ownership of the property, the private appointment of joint receivers suspends the duties of a borrower, including its officers and directors, over a mortgaged property. The lender – through the receivers – then takes control of certain operations of the property. In this case, however, The Ritz-Carlton will still operate and manage the property under the terms of its management agreement with the companies that own the property.  

The action is not necessarily a reflection of the financial performance of The Ritz-Carlton, Grand Cayman, but instead of the ownership’s performance in repaying its lender under the terms of a lending agreement. 

KPMG also said it could not give any further details about the action. 

“As this situation is a private and confidential matter between the secured lender and the companies, we shall be unable to provide any specific details regarding this matter.” 

RC Cayman Holdings LLC appointment of receivers follows closely after it filed a court action on 17 February – amended on 28 February – seeking to install its own appointed executive strata committee that governs specific areas of The Ritz-Carlton, Grand Cayman’s properties that are not part of the hotel.  

These include the north and south towers of The Residences of The Ritz-Carlton, Grand Cayman as well as the garage structures and several common areas. 

The civil action also sought an injunction against Mr. Ryan, Frances Doud and Tony Haddad “from interfering with the rights and duties of the Executive Committee”. 

In response to that action, Mr. Ryan issued as statement saying it was “hoped and expected that an agreement between the parties to resolve this matter will be concluded in the near future”. 

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5 COMMENTS

  1. Its simply a sign of the times.Markets are vey competitive so the norally higher than normal prices charged in Cayman need to get in line with the rest of the Caribbean.

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  2. This sounds like a haggle with the developers and lenders over who controls the strata. I can only imagine the rates this strata (formed during the bacchanalia) is charging these owners. I would wager the people paying the money (condo owners) will end up in charge of this.

    The downside of selling condos for 4 million to people is that they’re not stupid. Some of those ‘not stupid’ people are also lawyers, and pretty good ones too (whence the 4 million). Thus, if you’re pigging out on the strata, it will come to an end.

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