Judge Orders Stay For Indies Suites
Chris Johnson and Russel Smith, official liquidators.
Indies Suites
Tuesday, August 23, 2005
The liquidation of the Indies Suites has been reportedly stayed by Madame
Justice Priya Levers on 18 August until the Court of Appeals can hear the
appeal to overturn the liquidation order granted two weeks ago.
In addition, Justice Levers ordered $885,000, which are the remaining funds
from $1.125 million insurance settlement being held by Chris Johnson and
Russell Smith, be turned over to the court.
Brac Construction was also ordered to turn over $653,000 to the court, the
proceeds from the sale of the property.
Since the next session of Court of Appeals is not until November, the stay
effectively shuts down any efforts to liquidate the company by the joint
official liquidators Chris Johnson and Russell Smith, who were appointed on 5
August by Chief Justice Anthony Smellie.
The resort property, which is owned by Brac Construction, has been popular
with timeshare owners who have been coming to the Cayman Islands for several
years.
For the last few months, Indies Suites has become the target of mounting
complaints from these timeshare owners as they said there was no proper
communication from the Manager Ronnie Foster.
The property was extensively damaged during Hurricane Ivan and was
reportedly like many other properties on the Island underinsured.
According to Mr Johnson, the property, valued at $4 million, was
underinsured by $2 million so there were not adequate funds to rebuild the
property after the devastation wreaked by the hurricane.
It was subsequently sold for $2.8 million to St Matthew’s University of
Medicine. However, timeshare owners were not informed the property was sold
until 31 May.
The liquidation of Indies Suites has been strongly contested by Brac
Construction, with attorney Raymond Alberga arguing that timeshare owners are
not bona fide creditors, because they did not go to the company directly with
their complaint.
The liquidation petition by the creditors was made on behalf of two
timeshare or club owners and supported by 175 additional owners, which
represented approximately $1.5 million in claims.
But attorney Alan Turner representing the timeshare owners expects that
more will come forward, which means the claims may exceed $3 million.
Mr Johnson and Mr Smith, the official liquidators, were unavailable for
comment, but recently Mr Johnson told Cayman Net News that he would
leave no stone unturned to maximise the return to timeshare owners and other
creditors, in a timely manner, consequently the stay presents the liquidators
with an unwelcome delay.
Mr Foster said he was delighted at the stay, because it will give an
opportunity to resolve the matter for all concerned.
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