March 12, 2012
Honorable Hubert Hughes
Chief Minister
Government of Anguilla
PO Box 60 The Secretariat
The Valley
Anguilla, West Indies
Dear Chief Minister Hughes:
We write to you and to all the stakeholders at Cap Juluca, including the Julucans, regarding events from last week. I believe it is important to provide a brief accounting of what transpired to put everything in proper perspective. I would emphasize that all we have done is act in good faith in attempting to work with the GoA and in a spirit of reaching a consensual resolution to the insolvency – but to date, all that has produced is the unfortunate circumstance of our syndicate being taken advantage of. Last week’s events, in sum:
1. Mr. and Mrs. Hickox, with no prior notice to anyone, purportedly appointed a receiver Tuesday, March 6th. The Hickox receiver now purports to assume the duties and functions of the Joint Liquidators, including the management, operations and/or conduct of the business of the Cap Juluca Resort, despite not having a clear legal right to do so.
2. Hickox’s receiver is not under court appointment or control and is operating solely on behalf of Mr. and Mrs. Hickox’s interests; further, as referenced above, the receiver assumed control from the liquidators despite questionable legal grounds to do so, and we are challenging this appointment in court.
3. After providing notice to the GoA on Thursday of last week (the 8th), we appointed our own receiver on Friday over villas 1, 2, 3, 8 & 17. We have done this pursuant to authorization from Cap Juluca Management Company Ltd, the entity with which we have valid rental management agreements and the entity named as the exclusive rental agent for our villas on each of our respective Alien Land Holding Licenses issued by the GoA.
4. Hickox’s receiver has no valid right to enter our villas, to possess our villas, to rent our villas, or to collect monies generated by our villas.
5. In the past 4 months, Brilla, Rowan and Manfredi have foregone over $2,000,000 in rental income from our villas (in addition to over $1,000,000 in interest) to help keep the resort open in the hope of reaching a consensual solution. Meanwhile, Mr. Hickox received $8,000,000 from the Brilla financing and, of that money, provided $3,000,000 back on an allegedly secured basis, claiming to be the Resort’s savior. The reality is that, since this liquidation was initiated and the resulting defaults occurred under all our agreements with LIR, Brilla, Rowan and Manfredi have contributed MORE than $3,000,000 in value to Cap Juluca.
6. Our understanding with Tacon was, as long as the joint liquidators controlled the property and there was no unilateral action from Hickox to seize Resort assets (in addition to the joint liquidators abstaining from incurring additional liabilities to the unsecured estate), we would allow Cap Juluca to rent our villas without collecting monies due to us.
7. After learning of Hickox’s appointment of a receiver, as well as their attempt to rent and manage our villas (which they have NO RIGHT TO DO), we sent our receiver to the Resort on Friday morning to protect our property.
8. We demanded payment of all rental income from our villas pursuant to our subleases, including back rent due since the insolvency. These demands were rejected by the Hickox receiver, who did not recognize any of our property rights with respect to our subleases, our financing and security agreement with LIR, our rental management agreements, or our other transaction documents, despite having been put on notice of certain of our rights as a villa owner and secured creditor (and invited to speak with us) earlier in the week. See attached email to Hickox receiver, copying the joint liquidators.
9. While our intent has never been to hurt the hotel (and we have sacrificed collecting millions of dollars to prove this), absent action from the GoA, we have no other choice but to protect our rights and prevent Hickox and his receiver from illegally taking our property.
10. We are in the process of bringing actions in court this week to, among other things, have the court make a declaration of our rights and to take possession of our villas – which cannot under any circumstances (absent our agreement and consent) be rented or in any way used by Hickox’s receiver. Further, we maintain that Hickox’s actions with respect to our villas are illegal and his receiver may be subject to criminal charges.
It is unfortunate but we have no path left but to protect our rights. We will not let Hickox take property and income that rightfully belongs to us. We have followed the GoA’s rules and have foregone millions of dollars to protect what we felt were the best interests of the Resort. However, Mr. Hickox willfully ignored the GoA’s mandates and has taken actions to attempt to seize control of the Resort, with no consequence. Meanwhile, the joint liquidators have paid off trade creditors in full and paid other secured creditors (effectively, everyone but us), and, furthermore, have allegedly placed secured financing on Resort assets, all without addressing our secured interests. We will not allow those who purport to run the Resort to continue trading while insolvent to our detriment.
It is also important to explain to both the GoA and the Julucans, whom we hold in the highest regard, that we had no time to provide prior notice to them regarding Friday’s events as it was a rapidly evolving situation once our receiver got onto the property (about whose appointment we did provide notice to the GoA). We will use every legal remedy available to us to continue to assert our rights and push back on those who would seek to take advantage of us via questionable, if not outright illegal, methods and actions.
Respectfully,
Bradley W. Colmer
Managing Director
Also on behalf of:
Anguilla Hotel Investors, LLC
Anguilla Hotel Investors II, Ltd.
Bridge Funding Limited
(Published without editing by The Anguillian newspaper.)
