Open Letter To The Employees of Cap Juluca

Dear Julucans:

We write on behalf of Brilla Group (“Brilla”), one of the largest investors in Cap Juluca (the “Resort”) and in our role as both an owner of Resort villas and as an unsecured creditor to LIR, the ownership company that is now in liquidation.

As a brief introduction, Brilla is a specialized investment firm that owns, operates, and lends to luxury beachfront hotels and resorts in South Florida, the Caribbean, Mexico and Colombia; our current investment portfolio comprises capital commitments of approximately $150 Million and includes The Raleigh (Miami Beach, Florida), One Bal Harbour (Miami, Florida), Isle de France (St. Barth), Viceroy Zihuatanejo (Mexico), the soon to be constructed Four Seasons Mayakoba (Playa del Carmen, Mexico), and of course the remarkable and beloved resort of Cap Juluca.

There has been a great deal of misleading information and untruthful rumors that have been swirling about over the past several months concerning Brilla and the other creditors in terms of our involvement with Mr. Adam Aron, the Resort in general, and our intentions as we move to resolve the current matter – much of which has only recently come to our attention.

We have attempted to act in a professional manner and take the high road by not putting the staff in the middle of a messy creditors dispute, but in light of the numerous misstatements and outright falsehoods concerning Brilla and the other creditors – and that were intentionally perpetuated by Mr. Hickox’s misleading and manipulative letter to the staff dated February 18th, 2012 – we are now regrettably compelled to openly address these matters in order to set the record straight. We realize and appreciate that Cap Juluca represents your livelihood and it is your right to be fully informed.

Before addressing certain details, let us be absolutely clear – we have no desire or intention to close the Resort. Our goals are to (1) keep Cap Juluca open, (2) protect the jobs of all Julucans, (3) fairly resolve the creditors dispute, and (4) bring about a universal and long-term solution that will return Cap Juluca to its glory and ensure its future as a world-class resort.

Brilla Group stands aligned and unified with Messrs. Rowan, Friedland and Lefebvre to restoreAnguilla’s crown jewel. At the invitation of the Honorable Chief Minister, we are looking forward to presenting our detailed plan to the Executive Council on Monday February 27, 2012. This plan includes specific details as to how we would immediately and permanently resolve all investor/creditor disputes, convert all Resort debt (including our own) to equity, repay the creditors (including full repayment to local vendors and the Government), and provide massive capital infusion to the Resort to be invested in capital improvement and expansion, including $5 Million to be made immediately available to stabilize the Resort and prevent any threat of closure. Details about our syndicate’s qualifications and expertise, vision for Cap Juluca, and detailed action plan will be shared with the staff in the near future.

A Brief History

In February of 2011, Brilla invested a total of $14 Million cash in Cap Juluca. Of that money, $8 Million in cash went directly to pay Mr. and/or Mrs. Hickox for debts allegedly owed to them under an agreement they made with Mr. Aron, as previous owner. We believed, at the time, that Mr. Aron would be able to solve the Resort’s financial difficulties, many of which were created by years of litigation pursued by Mr. Hickox. Our involvement with Cap Juluca began as an arms-length financial investor. Unfortunately, we have not seen a final accounting for where all our money went and have been forced to deal with, as have all the other stakeholders and the employees, the current insolvency of the Resort.

It is important to note that we were not and are not “partners” with Mr. Adam Aron. We have no relationship with Mr. Aron other than having invested in the Resort while he was owner. We did so based on his representations to us, our admiration of the Resort, and our belief that he would be able to make good on his promises to restore Cap Juluca and repay our investment.

In the summer and fall of last year, it became apparent that the deal between Mr. Hickox and Mr. Aron had gone sour. Since that time Brilla, along with the other villa owners and the other unsecured creditors, have fought to protect our interests while doing everything within our power to keep the Resort open and healthy, including refraining from immediately pursuing our rightful contractual remedies under our agreements with LIR. As one of the largest creditors to the Resort, and jointly with Mr. Rowan, Mr. Friedland and Mr. Lefebvre, we have worked to create a long-term solution for all of the Resort’s stakeholders, including its employees and the good and honorable people ofAnguilla. We have listened to the requests of the liquidators, Mr. Tacon and Mr. Mackellar, and to the statements of the Government of Anguilla. We stand willing and able to work with the government, the employees, and all the other creditors who are looking to resolve this situation in a fair and reasonable way.

Following the settlement conference on January 13th, 2012, inMiami,Florida– which was attended by all stakeholders except for Mr. Hickox – we attempted to negotiate in earnest with Mr. Hickox to find a solution to resolve the current insolvency. Since then, and up until the government mediated conference in early February in which the major stakeholders were charged with finding a mutual solution, Brilla put at least 9 different proposals to Mr. Hickox, including proposals where we all work together to re-invest in the Resort. However, Mr. Hickox made it clear that he did not want to work with any of the other stakeholders at the Resort. It is apparent to us that he only wishes for absolute control and has only been willing to offer a deal where he receives 100 cents on the dollar on his side and the other creditors receive only 30 cents on the dollar on theirs – with Mr. Friedland receiving nothing on the secured debt owed to him even though Mr. Friedland is owed over $7 million due to Mr. Hickox’s breach of the terms of a New York Settlement Agreement (arising from Mr. Hickox’s failure to pay Mr. Friedland the amount owed from Mr. Hickox’s purchase of LIR from Mr. Friedland and his partners in October 1986).

Mr. Hickox allegedly put approximately $16.5 Million dollars into the Resort – the validity of which loans certain parties still dispute – and received a payout in February of last year for $8 Million (from Brilla funds). Mr. Hickox, to the best of our knowledge, never invested any equity, not even one dollar in Cap Juluca yet he now claims that he is owed approximately $70 Million dollars as a result of “interest” payments. Brilla along with Messrs. Rowan, Friedland and Lefebvre, on the other hand, have invested over $60 Million cash, and have not received a single dollar back from those investments. It is our opinion, having attempted to negotiate in good faith with Mr. Hickox over the last several months, that he has been absolutely unreasonable in his demands and that he does not really care about the future or welfare of the Resort or Julucans if it does not include him maintaining absolute control.

This is, unfortunately, something of a case of history repeating itself. Mr. Hickox has been involved with litigation, which has embroiled Cap Juluca for the better part of 24 years. His actions have threatened the closure of the Resort before. Mr. Hickox is not, in our opinion, someone who is qualified (either professionally or financially) to suddenly ride in to save the Resort. At best, Mr. Hickox can only take over part of the actual property; as a result, the Resort will not be able to sustain profitable operations necessary to keep it open and viable. Moreover, we do not believe that Mr. Hickox will be able to attract any significant future investment if the Resort is allowed to continue in a fractured state. In fact, it is our understanding that when presented with an opportunity to stabilize the ownership structure in the Fall of 2011, Mr. Hickox refused to cooperate, thus allowing this very situation to unfold as it has. Now he claims that he can do what others could not, even though the underlying fractured ownership situation will remain unresolved should Mr. Hickox have his way.

Specific Responses to Mr. Hickox’s Letter of February 18, 2012

Mr. Hickox: “When the resort needed working capital we were the only ones who were there; in order to keep the hotel open, we injected working capital of US$3,000,000 between November 2011 and January 2012.”

Response: This is an untrue statement. On November 9, 2011, Brilla and Mr. Rowan separately provided written financing offers in excess of Mr. Hickox’s proposed loan to keep the Resort open, and Mr. Hickox was copied on Brilla’s proposal. Unfortunately, the financing arrangement with Mr. Hickox was done secretly and with no opportunity for the other creditors to review the terms. Mr. Hickox’s loan for working capital was only made available against the security of villas 4, 5 and 6. On January 31 2012, Brilla made a further offer to pay back Mr. Hickox’s loan and provide an additional US$1,000,000 in working capital to the Resort. Our offer was rejected by the liquidator, as was Mr. Hickox’s proposal for an additional US$300,000, because the liquidator determined that it was not in the best interest of the Resort to accept further secured loans (as opposed to unsecured loans) at that time.

Mr. Hickox: “We entered into negotiations with the unsecured creditors, Brilla, Rowan & Manfredi at the request ofGoA, despite the fact that we are the only secured creditor amongst them….”

Response: Mr. Hickox completely ignores the fact that Mr. Friedland is a secured creditor (with a charge of approx. $7.25 Million) as a result of a deficiency judgment that resulted from Mr. Hickox failing to pay the amount agreed in the Settlement Agreement of 1996, and Mr. Hickox has never disputed this fact. Moreover, over the past several months Brilla has exerted great efforts and has managed to unite all of the creditors except for Mr. Hickox who has opposed all efforts at a cooperative resolution. In fact, Mr. Hickox refused to even attend the initial settlement conference and summarily rejected 9 different proposals that Brilla offered on behalf of the other unified creditors. The only offer ever submitted by Mr. Hickox to the other creditors was for a pittance of the money we gave to Cap Juluca plus theCoveBay/ National Park Ponds, land and ponds that he did not own. His offer to the other creditors was less than the money he took out of the Resort (i.e., $8 Million) from Brilla’s February 2011 investment.

Mr. Hickox also ignores the fact that he never disclosed to the GOA when applying for an ALHL that he was party to a Settlement Agreement in New York that he breached by registering his liens (charges) and that there is an existing order of the Court in New York that prevents him relying on his charges in any way. As such, he is in reality not a secured creditor if his charges cannot lawfully be relied on. If he relies on his charges he will be subject to be enjoined by a Court inNew York.

Mr. Hickox: “As a secured creditor, we have collateral in the form of a duly registered charge whereas the unsecured creditors have no collateral. Dion Friedland, who lost his 12 year legal battle with us, and used operating cash from the hotel to pay his legal bills, has now aligned his interests with these unsecured creditors. As you all know, the hotel’s interior condition deteriorated dramatically under Friendland’s watch.”

Response: In fact, the legal actions were between LIR & Hickox, not Mr. Friedland and Mr. Hickox. As a result, the funding for LIR legal bills came from the Resort. Other actions against Hickox were funded directly by Mr. Friedland. Moreover, Mr. Friedland has stated clearly that he took no remuneration or dividends from Cap Juluca in all the years of his ownership. This can be verified by any employee working in the finance department. Furthermore, Mr. Friedland did not lose his 12 year legal battle with Mr. Hickox. First, it was LIR’s legal battle, not Mr. Friedland’s. Second, the Court inAnguillaruled on an approximate $16.6 million payout to Mr. Hickox for all his debt. Mr. Hickox then appealed the judgment and, following an appeals court decision that required the lower court to decide on actual amounts owed (if any) Mr. Aron failed to appeal theAppeal Court’s decision.

In September and October 2007, before selling to Mr. Aron in April 2008, Mr. Friedland spent $2.5 Million on renovations including new marble in 30 bathrooms, new fabrics (couches, etc) wherever required, new furniture, rugs, etc. Years prior to that, he constructed the seawall for almost $4 Million, a new kitchen for Georges (now called Blue), and a new laundry, etc. The impediment that prevented Mr. Friedland from bringing in new capital to expand the hotel was Mr. Hickox’s charges that were placed on the Resort even though the Court inNew Yorkhad ruled that Mr. Hickox could not rely on his charges. As many of you know, under Mr. Friedland’s stewardship with his Julucan team, Cap Juluca achieved the highest awards, highest rankings in major industry publication worldwide, highest ADR in theCaribbeanand the Julucans made more money in service charges then at any other time in the Resort’s history. The deterioration came after Mr. Aron took over the Resort and Mr. Aron refused to take Mr. Friedland’s advice to invest in the room interiors. Moreover, as you know, Mr. Friedland gave $1 Million to the Julucans after the sale to Mr. Aron.

Mr. Hickox: “As a consequence of this scheming, we have decided to pursue our legal rights; we are taking every legal step available to keep the hotel open and to save the reputation of Cap Juluca, including filing an application with the Anguillian court to keep the liquidator from arbitrarily closing the hotel. If we succeed, this will avoid a massive loss of jobs and a potential catastrophe for the economy ofAnguilla. Brilla, on the other hand, has filed an affidavit with the court to prevent further funding of the hotel. Their motives appear to be to force a closing of the resort, for no other purpose than to diminish its value and ruin the good name of Cap Juluca.”

Response: This statement is false and libelous and a deliberate attempt to mischaracterize the position and actions of Brilla and the other investors. First, Mr. Hickox has presented no details to support his allegation of “scheming” – as there is in fact nothing to support this egregious allegation. Further, as clearly stated in our Affidavit to the Court dated February 17, 2012, we are in complete agreement with Mr. Hickox’s first statement – Cap Juluca cannot be permitted to close. The reality is that it is Mr. Hickox who is playing games – he wants to force the Liquidator to take $300,000 on a secured basis (which the Liquidator has already deemed not in the best interest of the Resort or the unsecured creditors), which Mr. Hickox thinks is sufficient to save the Resort from closure.

$300,000 vastly understates the true amount needed to save the Resort from closure since bookings have dropped sharply. When the Liquidator accepted $3 Million in financing from Mr. Hickox in November 2011 that money was supposed to keep the resort open at least until May/June 2012, which now according to the Liquidator it clearly will not. So, how long does Mr. Hickox think $300,000 will really last to support the operations of the Resort and prevent closure? As stated in our Affidavit, Brilla believes that the only real solution is one that resolves these matters in a complete and lasting manner. A small cash bandage does nothing to solve the real problems of Cap Juluca. In fact, Brilla and the other creditors have nearly $30 Million ready to facilitate the repayment of Anguillan creditors and the Government of Anguilla, as well as the renovation and further development of Cap Juluca.

Mr. Hickox: “We are not responsible for the current state of affairs at Cap Juluca. On the contrary, we are doing everything within our means to get a fair and equitable resolution. The property is in the current the predicament solely due to the actions of Adam Aron and his partners, including Brilla, Rowan and Manfredi all of whom were working together.”

Response: Again, this statement is false and libelous and a deliberate attempt to mischaracterize the position and actions of Brilla and the other investors. Mr. Hickox ignores the fact that he kept the Resort in litigation for over 20 years and further ignores that, because of his charges against the Resort – which despite his statements to the contrary, are still the subject of disputed claims by multiple parties – Cap Juluca was unable to obtain outside financing for the Resort. This is why Mr. Aron was unable to raise additional funding and elected to appoint the Liquidator.

We are not working together with Mr. Aron and we are not trying to put the Resort at risk. We do agree that the actions of Mr. Aron contributed greatly to the bankruptcy of the Resort, but Brilla, along with the other investors have been acting solely in their capacity as creditors to the Resort. Mr. Rowan and Mr. Lefevbre invested in Mr. Aron’s company, had no voting rights with any of the actions Mr. Aron took on behalf of the Resort, and lost all of the nearly $40 Million in equity they invested with Mr. Aron into the Resort.

Mr. Hickox: “At the same time, as part of the scheme which did great damage to the hotel, Mr. Aron’s partner, Marc Rowan, announced the sale of all furniture, fixtures and equipment out from under hotel guests, even thought he had no legal right to do so.”

Response: This is a complete distortion of actual events and how Mr. Rowan acted regarding his interests in Cap Juluca. Mr. Rowan lent money to the Resort prior to its liquidation, secured by the furniture, fixture and equipment (FF&E) from the Resort in a valid and perfectly legal Bill of Sale that was executed well in advance of the events that led to the liquidation. In November 2011, Mr. Rowan held an auction to perfect his security interest in the Resort’s so called “chattels” and has since been generously allowing the Resort to use all its furniture, fixtures and equipment – even as those things are consumed, damaged, or destroyed by their continued use over time. Mr. Rowan has not acted to take a single piece of his property out of the Resort despite his right to do so, in the hope that Mr. Hickox would agree to a reasonable outcome acceptable to all parties.

Summary

The moment of truth for Cap Juluca is at hand. It is up to all of the stakeholders, including the employees of Cap Juluca and the Government of Anguilla, to act decisively in order to do what is necessary to return Cap Juluca to greatness. Brilla Group and Messrs. Rowan, Friedland and Lefebvre stand unified and ready to restore Anguilla’s crown jewel and will present the Government of Anguilla with a real, immediate and permanent solution to resolve all investor/creditor disputes, convert all Resort debt to equity, repay the creditors (including full repayment to local vendors and the Government), and provide massive capital infusion to the Resort to be invested in capital improvement and expansion, including $5 Million to be made immediately available to stabilize the Resort and prevent any threat of closure. Moreover, this syndicate has the proven expertise and company and financial resources to properly restore and operate a world-classCaribbeanresort.

We sincerely wish each of you the very best and are looking forward to working together. The best days for Cap Juluca lay ahead.

Respectfully Submitted,

BRILLA GROUP