Pelican Resort St. Martin To Close February 20

[Larry]

This is part of the notification to owners of Pelican Resort and Pelican Marina Residence. which was declared bankrupt and purchased at auction. The new name is Simpson Bay Resort.


"Diligence, responsibility, long term viability of the resort, consideration of the interest of stakeholders and as stated in particular the protection of your timeshare rights for the long term, compels management to close the resort as of Sunday, February 20, 2011, until solutions are found. Please note that no check-ins will be possible as of Saturday, February 19, 2011 (interval #8 on the resort occupancy calendar)."

I'm sure glad I advised all of my family members got rid of my their weeks as I did for my two weeks at Pelican. Between all of my family and extended family we had a total of six weeks at Pelican.

 

[Cathyb]

Wow

This is part of the notification to owners of Pelican Resort and Pelican Marina Residence. which was declared bankrupt and purchased at auction. The new name is Simpson Bay Resort.


"Diligence, responsibility, long term viability of the resort, consideration of the interest of stakeholders and as stated in particular the protection of your timeshare rights for the long term, compels management to close the resort as of Sunday, February 20, 2011, until solutions are found. Please note that no check-ins will be possible as of Saturday, February 19, 2011 (interval #8 on the resort occupancy calendar)."

I'm sure glad I advised all of my family members got rid of my their weeks as I did for my two weeks at Pelican. Between all of my family and extended family we had a total of six weeks at Pelican.

Did you sell to other Tuggers :ignore: Very sad. Are current owners out all their investment or will the new owners honor the weeks for use?

 

[Anne S]

I guess that's why I didn't see any when I searched in II this morning. I assumed that it was an II glitch, because usually there are tons of weeks for exchange. It is very sad, especially for the owners. I do hope that they get some recompense.

 

[Larry]

Did you sell to other Tuggers :ignore: Very sad. Are current owners out all their investment or will the new owners honor the weeks for use?

No I didn't sell them just gave them back to resort over the past two years. We bought them during fire sale reported here on TUG by Fletch several years ago so only paid around $750 per week and made some outstanding trades over the years so came out way ahead on our purchases through great vacations.

If you recall the Aruban had a similar situation last year and was bought at auction and re-opened about two months as Tropicana Aruba after it closed so hopefully it Pelican will re-open again.

 

[dchilds]

Additional text from the notice

If you can believe them.

"If you paid your 2011 AMF and are unable to use your interval with the resort due to the closure you will receive an occupancy adjustment for future use without any additional fee. Details of this program will follow."

 

[krmlaw]

this is horrible! we have a confirmation for july 2012 there, hope we can use it!

 

[rachel]

I had confirmation with II for Thanksgiving week, 2011 in the Beachfront Flamboyant Bldg. Called II this morn to cancel, I got my week redeposited with no restrictions and also my exchange fee reimbursed. I hated to cancel, but cant really make plans with so much uncertainty. Really hated to give up that Flamboyant unit!

Rachel

 

[silverfox82]

I had confirmation with II for Thanksgiving week, 2011 in the Beachfront Flamboyant Bldg. Called II this morn to cancel, I got my week redeposited with no restrictions and also my exchange fee reimbursed. I hated to cancel, but cant really make plans with so much uncertainty. Really hated to give up that Flamboyant unit!

Rachel

What a shame you had to cancel but I understand your trepidation. From what i've been reading this situation might be temporary, just a ploy to be able to trim the workforce. Keep your eye on it, the ttol site has a couple of threads up now, it might be just a small glitch

 

[timesharejunkie4]

"Diligence, responsibility, long term viability of the resort, consideration of the interest of stakeholders and as stated in particular the protection of your timeshare rights for the long term, compels management to close the resort as of Sunday, February 20, 2011, until solutions are found. Please note that no check-ins will be possible as of Saturday, February 19, 2011 (interval #8 on the resort occupancy calendar)."

It does sound temporary as is in the part of the statement I highlighted. That still doesn't help anyone who has a reservation because who knows how long "temporary" may be. I feel bad for anyone with airline tickets and no place to stay. We also bought during the fire sale and were considering giving it back but I'm not sure you can do that any longer. Larry, can you tell me how you went about it and where I can get the info?
We have enjoyed the time we have spent in St. Maarten and have also received some excellent trades with it but the escalating maintenance fees and turmoil within the resort are making it just not worth it anymore

 

[ilene13]

What about the Marina?

Did the Pelican Marina close also?

 

[tombo]

Yes the Pelican Marina also closed. Here is excerpt from letter sent to owners:
The resort formerly known as Pelican Resort Club and Pelican Marina
Residences was sold as of January 26, 2011. The new name of Pelican Resort Club
is Simpson Bay Resort & Marina. The new name of Pelican Marina Residences is The
Villas at Simpson Bay Resort & Marina.

 

[tombo]

3 articles from local paper

3 articles from local paper:

http://www.thedailyherald.com/islan...t-new-owners-seeking-10-year-tax-holiday.html

http://www.thedailyherald.com/islands/1-islands-news/13481-pelican-workers-prevail-in-court.html

http://www.thedailyherald.com/

 

[tombo]

letter to owners responding to Newspaper articles

The TAPRC response to material from the Daily Herald articles

==========
1. TAPRC Response:

The current TAPRC Board is outraged by Mr. Corso’s misguided, self serving,
ill timed, deceptive, and clearly detrimental announcement of a prospective
intent to close the Pelican Resort. The TAPRC Board was not advised of this
knee jerk action. Had the TAPRC Board been notified of Mr. Sutton's and Mr.
Corso's intended action it would have made every effort to notify and forewarn
owners and ease their vacation disruption.

The TAPRC Board questions Mr. Corso’s and Mr. Sutton’s alleged concern for
loyal and long term Pelican timeshare interval owners who clearly deserve
better.

The TAPRC Board is meeting in special session this weekend to address this
latest "fiasco" to impact our beloved Resort as well as a host of other legal
and logistical issues involving the Resort as follows:

1. The TAPRC board is pressing ahead with vigorous legal appeals on the two
recent legal decisions involving the Pelican Resort leading up to QIT's
foreclosure action. The TAPRC Board is cautiously optimistic that these appeals
will be successful in reversing the very questionable foreclosure action
allowing Mr. Sutton's takeover of the Pelican Resort.

2. The TAPRC Board is pressing Royal Resorts, QIT and the new alleged
ownership company (all controlled by Sutton and Corso) to be held legally
accountable for their unauthorized use of, and continued dissipation of Pelican
Resort assets not covered by the recent foreclosure action.

3. The TAPRC Board is reaching out to other resorts and hotels on the Dutch
side of St. Maarten to see if there is any "availability" that can be reserved
for Pelican owners given the announcement made by Corso about closing the Resort
down (effective 2/20/2011). The Board is very concerned that many Pelican owners
have already paid their 2011 annual maintenance assessment, have non-refundable
airfare and have already planned their vacations and are now being told they
will not be able to use their timeshare units. Mr. Corso has repeatedly assured
Pelican owners that their use of their timeshare intervals will not be disrupted
as recently as last week. The Board asks the island government to follow through
on its commitment of "in force" timeshare protective legislation to protect
pelican timeshare owner investments and vacations and to hold Mr. Sutton and Mr.
Corso accountable for their actions.

The TAPRC Board will be issuing an e-mail blast shortly to share our
research and suggestions re: alternate accommodations with Pelican owners.

4. The TAPRC Board is still waiting patiently for the island government to
respond to multiple Board requests (directly and in letters written on the
Board's behalf by the Board's St. Maarten attorney) for a face to face meeting
with the island government leaders to discuss the ongoing issues involving
Pelican Resort, and to better understand how the island government expects to
protect 12,000+ Pelican timeshare owners' investments from the damaging actions
of Corso and Sutton. This latest Corso announcement has clearly compromised the
ongoing viability of Pelican Resort, the investments of thousands of loyal
Pelican owners, the livelihoods of 180+ valued and loyal Pelican employees and
the island's economic engine (tourism).

5. The TAPRC Board is anxiously awaiting the island government's immediate
intercession into this matter, and look forward to the island government's
taking strong action to compel Royal Resorts/QIT and the alleged new owner
company to rescind their disastrous announcement (which is compromising the
rights of so many people) and to immediately publish an announcement rescinding
their knee jerk action.


The TAPRC Board will continue its efforts to protect the interests
of Pelican timeshare owners, and will not rest until the Pelican Resort is
returned to its rightful owners. This Board will continue to exhaust all legal
options to hold Mr. Corso and Mr. Sutton accountable for their actions which
have had an incredibly adverse affect on Pelican timeshare owner investments and
on the entire island economy.



Respectfully,

Jeff Borowick, Chairperson

TAPRC Board

 

[Tia]

Outside on looker wondering who is TAPRC?

The TAPRC response to material from the Daily Herald articles

==========
1. TAPRC Response:
....

 

[Hotep]

Taprc

Outside on looker wondering who is TAPRC?

TAPRC was the Tenant Association of Pelican Resort Club. The governing board of the resort,.....the owners association.
It was dissolved by by Richard Corso and Richard Sutton of the Royals Management, and QIT, Quantum Investment Trust, the current owners of the resort. QIT was the mortgage holder which Royal Management failed to pay, forcing the forclosure. QIT is controlled by Richard Sutton, owner of the Royal Resort Organizations. So his management company failed to pay his fincance company, so that his finance company could forclose and buy the resort. Then as owner, QIT collected maintenance 2011 fees, then fired the employees, then closed the resort. Sutton, Corso and the Royals now have the unpaid wages, collected 2011 annual resort maintenance fees...... and closed the resort. A big Con job! The Royan Mayan in Cancun is next!

 

[Larry]

Larry, can you tell me how you went about it and where I can get the info?
We have enjoyed the time we have spent in St. Maarten and have also received some excellent trades with it but the escalating maintenance fees and turmoil within the resort are making it just not worth it anymore

I contacted ISCO in Florida and they sent me the forms to give back my timeshares. They then sent me a confirmation that they accepted my weeks back. Based on the current developments with the foreclosure and all I'm not sure if they are still the company to contact.

Good luck!!!

 

[LisaH]

What a mess! I own a week a while ago, bought during the fire sale posted on TUG. Made a couple of exchanges and sold it 2-3 years later. So glad that I dodged this bullet...

 

[tombo]

Sutton, Corso and the Royals now have the unpaid wages, collected 2011 annual resort maintenance fees...... and closed the resort. A big Con job! The Royan Mayan in Cancun is next!

Royal Mayan in Cancun is next? What do the two resorts have to do with each other?

 

[timesharejunkie4]

Larry- Thanks for the info. I had banked, gotten and used my exchanges for my 2011 units. Hopefully something will be resolved for the people who got my week 25 units. I'll contact ISCO and see what they have to say.

 

[pjrose]

Letter to Owners Feb 14 (Happy Valentine's Day???)

Dear Timeshare Member,

We understand the closing of the resort is of great concern to everyone and we are doing everything possible to responsibly address the issues and to create a viable long-term vacation experience.* To assist in understanding please see the list of Frequently Asked Questions and answers.

We will continue to keep you updated and thank you for your patience, understanding and support.* We extend a special thank you to the exchange companies Interval International and R.C.I. who are working tirelessly on the relocation project.* We also thank the St. Maarten Timeshare Association who is assisting with alternate accommodations options.* Please see the related details below and for more information visit them at http://www.timesharestmaarten.com/news.

1.* Why will the resort close?
The resort has serious unforeseen legal, financial and labor issues.* More than 60 hours of face-to-face negotiation was held, ultimately unsuccessfully, attempting to negotiate with labor.* Additional legal and financial issues are also being addressed such as the 2011 Annual Maintenance Fees spent in 2010 and the moveable assets.

2.* Why weren’t we told about this in advance?
Every effort has been made - and will continue to be made - to provide occupancy of the resort with the least possible interruption.* The closing is due to recent unforeseen events that, if not properly addressed, could threaten the long-term viability of the operation of the resort.*

3.* Why must the resort close now?* Why can’t it wait until low season?
The closing is due to issues that are critical to the long-term viability of the operation of the resort.* There is no “good time” for these situations to occur and closing the resort is not something that can be scheduled.* The closing is related to the new reality, not the time of the year.

4.* What happens on February 19 and 20, 2011?
No members or guests will be checked in as of February 19, 2011.* All members and guests will be required to leave the resort by 10:00 a.m. on Sunday February 20, 2011 and the resort will be officially closed.

5.* When will the resort reopen?
We understand this is a question of great importance.* The resort will open as fast as prudent and economically viable.* The long-term protection of the resort - and the timeshare usage rights - is being prioritized over short-term fixes that will ultimately come at a very high price.* It is not possible to responsibly predict the time it will take to address and resolve the important issues at hand.

6.* What happens to my timeshare rights?
Your timeshare usage rights are protected and are not at risk.* The new owner has conveyed their recognition of your right to your villa and interval.** You remain in good standing by simply paying the Annual Maintenance Fee.*

7.* What if the resort is closed during my usage interval?
If you are unable to use your timeshare interval due to the resort being closed and have paid your Annual Maintenance Fee, you will receive an Occupancy Adjustment allowing you to use an alternate interval in a comparable unit without any added cost.

8.* When can I schedule my Occupancy Adjustment?
Occupancy Adjustments may be scheduled after the resort reopens.* We will keep you informed on this matter and make every effort to exceed your expectations.

9.* Will the resort find me a new place to stay if the resort is closed?
The resort is not able to provide alternate accommodations in this circumstance.* Occupancy Adjustments will be provided to all Members who are unable to use their interval due to a resort closure and renters - from the company’s rental program - will receive refunds. Interval International and RCI are both actively working with exchangers to make alternate plans.

10.* Will I receive a refund for any fees lost to airlines, pre-booked activities, etc.?
The resort is not able to provide reimbursement for these fees.

11.* What if I already paid my 2011 AMF?
All 2011 AMF paid have been credited to your account.* If you are unable to use your 2011 interval due to the closure of the resort then an Occupancy Adjustment will be issued to allow you a usage week at an acceptable date in the future.

12.* What happens if I have not paid my 2011 AMF?
The 2011 AMF is due by February 12, 2011 and members are encouraged to pay on time.* However, if you do not pay your AMF for 2011 you will be contacted with additional details concerning your membership and usage rights.

13.* Will the Exchange Companies honor my confirmed exchange?
We recommend you promptly contact the exchange company for verification.* It is important to speak directly with the exchange company to verify your personal situation.

14.* Can I deposit my interval with the exchange companies?
If you deposited your interval prior to January 11, 2011 you may still be able to use your deposited 2011 interval (week).* The exchange companies I.I. and RCI have advised they will not accept any new deposits until the resort is open.** We recommend you promptly contact the exchange company with any questions.**

15.* Do I have to pay my timeshare mortgage payments?
Yes, if you are financing a timeshare purchase your mortgage payments are still contractually due. If you do not continue to pay your mortgage payments as agreed you will be contacted with additional details concerning your membership and usage rights.* If you are unable to use an interval due to a resort closure you will receive an Occupancy Adjustment allowing you to use the resort at a future date.

16.* What is happening at the resort?
Although the resort will close on February 20, 2011, the new owner continues to insure the property and provide the required maintenance and 24-hour security to safeguard the property. *

17.* What is happening with the employees?
More than 60 hours was invested negotiating with the pool of workers of the previous employer through their union representative.* Proposals to the pool of workers ranged from a minimum 1-year employment agreement for all workers (with the same wages) to guaranteed permanent employment for a minimum of 80% of the workers (with the same wages). *Recently a labor agreement was actually signed with the Union President guaranteeing permanent employment to at least 80% of the pool of workers of the previous employer; but the following day the agreement was not ratified by Union. More than 50 workers of the previous employer are currently working at the resort.* The new owner has advised they are seeking the quickest responsible resolution to the issues and discussions continue.

18.* Who is the new owner (who owns the resort)?
As of January 26, 2011 Simpson Bay Resort Owner Company B.V owns the resort.* As you may know, the resort was recently auctioned and, while your usage rights continue, the ownership of the resort has changed.

19.* Are the on-site concessions still operating?
The 8 tenants outside of the lobby were provided the option to continue operating.*

20.* Can I get my 2011 AMF returned?
No, the 2011 AMF is due to remain in good standing.* If you are unable to use your interval week due to a resort closure then an Occupancy Adjustment will be provided for replacement usage in the future.

21.* Is closing the resort what the new owner planned all along?
Closing the resort was never the new owners intention and it is a regretful situation.* However, responsible management and prudent decisions for all stakeholders requires decisions be made that provide for a sustainable and healthy future for all timeshare member, staff, and tenants.* Closing the resort hurts everyone; however, the long-term interests of the stakeholders - namely the timeshare members - are best served with an economically healthy and financially viable operation.

22.* What happens to my rental payments?
If you rented from the resort’s reservation center you are entitled to receive a full refund.* At your sole discretion, you may also inquire about alternate vacation destinations and alternate dates.** The rental center may be contacted toll-free from the USA and Canada at 888-721-4407 and elsewhere at 954-736-5807.* If you rented from any other party you should contact them directly to discuss the matter.

23.* I have been trying to transfer the title of my Pelican Ownership.* When can I do this?
We anticipate Title changes to be processed as soon as the resort reopens.

24.* Why did the resort change names, and why are there two names?
The names had to change because the new owner does not own the names Pelican Resort Club and Pelican Marina Residences.* The resort has two names to assist the exchange companies in providing the highest quality service.

25.* What is being done to solve these issues?
Meetings continue every day in an effort to quickly address the current challenges.* Through realistic collaboration of the parties and stakeholders, long-term solutions can be defined and agreed to which provide a stable and sustainable resort.

26.* What other resorts have availability in St. Maarten?
Through the effective coordination and leadership of the St. Maarten Timeshare Association, many resorts are making the few remaining accommodations available to you at discounted rates.* Please see related article below.

27.* When will we receive more information?
More information is expected as early as the end of next week and it will be promptly provided.

28.* How can I get more information?
We understand everyone’s interest and desire for more details.* Information will be provided as it becomes available.* We encourage all members who do not have an email address on file to send their complete information including Personal Identification Number (PIN), Contract Number, Interval & Unit number, address, phone, and email address to info@simpsonbayresort.com.* All contact information will be promptly updated.

Thank you for your patience.* We will provide more updates as information becomes available.


Sincerely,



MANAGEMENT
Simpson Bay Resort & Marina
The Villas at Simpson Bay Resort & Marina

*

*

*



Important Message from the St. Maarten Timeshare Association
We have been very busy assembling rooms at deeply discounted rates for all inbound Pelican timeshare owners. The majority of the SMTA resorts have already committed to give what little open space there is over the next few weeks at maintenance fee rates, but this will only take care of a small fraction of the total. We are also working with the government and other businesses to offer other specials.

We ask that parties of 2 people make use of the hotel spaces so that larger families can access the limited number of timeshare suite open. If the Pelican, now known as the Simpson Bay Resort and Marina, is unable to resolve the problems leading to the closure quickly more and more suites at timeshare properties will be available after March to where all can be accommodated in suites.

Below is a listing of the hotels we have secured special rates at and contact info. When you call or email please quote SMTA HELP as the code for the discounts. We cannot publish these rates on the Internet due to contractual agreements with travel agencies. More are being added by the hour so check back later for those.
*
It is our understanding that Resort Management will offer continued assistance to show you that St. Maarten does care. Follow our other blogs coming on those efforts.

Please note that proof of Pelican ownership must be supplied at check-in or you will pay a higher rate. We also must thank the French Hotel Association for assistance.

Dutch side Resorts & Hotels

Sonesta Maho Beach Resort *- email reservations@mahobeach.com*or call (011 599) 545-2115

Sonesta Great Bay Beach Resort - email reservations@greatbaybeachresort.com*or call (011 599) 542-2446

Princess Port de Plaisance - email info@princessresortssxm.com*or call (011 599) 544-5222 Please note they also have some limited availability on timeshare suites.

Horizon View - email horizon@sintmaarten.net*or call (011 599) 542-0705

French side Resorts & Hotels - all include American breakfast

Beach Plaza - email *perrinmarechal@wanadoo.fr

Le Flamboyant Hotel-Resort - email commercial.caraibes@hmc-hotels.com tel. 00590 590 87 60 57 all with kitchenettes

Mercure St. Martin *- email : *h1100-re@accor.com *tel 00590 590 51 91 84.*

For further assistance call 1 800 309 2005 or email aguy@shta.com.* And of course you can use the contact the St. Maarten Timeshare Association at via their website and info@timesharestmaarten.com
We look forward to seeing you back soon on the Friendly Island!
Sincerely,

Board of Directors
St. Maarten Timeshare Association

*

Additional St. Maarten Resorts & Phone Numbers

RESORT BY NAME
Phone numbers


1 ATRIUM
011 599 544 2125


2 BELAIR BEACH HOTEL
011 599 542 3366


3 DIAMOND RESORTS FLAMINGO BEACH
011 599 544 3900


4 DIAMOND RESORTS ROYAL PALM BEACH CLUB
011 599 544 3737


5 DIVI LITTLE BAY BEACH RESORT
011 599 542 2333


6 OCEAN CLUB
011 599 545 4362


7 OYSTER BAY BEACH RESORT
011 599 543 6040


8 PRINCESS PORT DE PLAISANCE RESORT
011 599 544 5222


9 ROYAL ISLANDER CLUB LA PLAGE & LA TERRACE
011 599 545 2388


10 SONESTA GREAT BAY BEACH RESORT
011 599 542 2446


11 ST. MAARTEN SEA PALACE
011 599 542 2700


12 WYNDHAM SAPPHIRE BEACH CLUB & RESORT
011 599 545 2179

 

[krmlaw]

thanks for the update! hope this all gets resolved quickly

 

[plequerre]

[The following is a press release from Royal Resorts Group]

The new owner of Simpson Bay Resort & Marina & The Villas at Simpson Bay remains hopeful that a quick solution can be reached which will allow it to operate the resort in a viable and financially feasible manner. The resort was acquired January 26, 2011 via the public auction of Dec. 16, 2010. The subsequent decision to cease operations of the property on Feb. 20, 2011 was an unavoidable result of additional liability claims and unforeseen operational deficits incurred and was only implemented after all other options have been exhausted.

This is the second time in history that the resort, formerly known as Pelican Resort Club, had to cease its operations because of financial troubles. These troubles stem from a major flaw that has plagued the resort for well over a decade – high operational expenses, low employee productivity and inadequate revenue to sustain it. It should be further noted that employment salaries and benefits constitute a disproportionate expense of approximately 50% of the resort's operational fees.

The records are clear and well documented. Under the second owner, The Tenant’s Association of Pelican Resort Club (TAPRC), the resort always ran at a deficit and the Board ignored the recommendations of its professional management company. The official TAPRC records as far back as the 1998 Annual General Meeting of timeshare owners clearly documents the issue:

"[Board Member] Patterson indicated that the Board had not made a decision; however, the 1998 budget showed a deficit of US$462,848. - and the Resort cannot continue operating at a deficit. The Annual Maintenance Fees have not been increased in two years and the Board does not feel it can continue another year without an increase. Richard Sutton, Director General of Royal Resorts, stated that it was their earlier recommendation, after studying the 1997 financial position, that the 1998 AMF be raised by 10% but this was rejected by the Board."

For the last 13 years, Pelican Resort Club has been borrowing money to cover budget short falls as a consequence of its high operational expenses and unrealistically low maintenance fees. The new owner of the Simpson Bay property is the same lender that Pelican Resort has been borrowing money from for many years so that the resort could keep its doors open.

In 2004, the same lender rescued Pelican Resort Club with a US$ 3.185 million dollar loan when Trustees of Billy Folly Development threatened involuntary bankruptcy if the 1996 bankruptcy debt was not settled in seven business days. The general public should know that when the timeshare owners bought the resort in 1996 they did not pay the full price, but only part of the purchase price. In 2004, eight years after the initial down payment, the timeshare owners still had not provisioned funds to pay the balance of their debts or were simply unwilling to reach into their pockets to pay for their purchase. The timeshare owners in any case approached the same lender for an emergency rescue loan to prevent another bankruptcy.

In 2005, that same lender provided a loan to Pelican Resort Club in excess of US$25 million to finance the construction of the Pelican Marina Residences, a project which the owners at the time (TAPRC) intended to use to create additional revenue in order to pay for Pelican Resort Club's yearly budget shortfalls, multi-million dollar debts, and deferred maintenance.

Official records dating back more than 10 years show TAPRC’s desire to earn their way out of debt via a new construction project. The Official Minutes of the 2002 Annual General Meeting of timeshare owners on Dec. 3-4, 2002, quote TAPRC Treasurer Bob Ryan:

"The resort should set up the proper reserves. We therefore need to start the Marina project so that we can generate additional cash."

It is utterly incredible that the same lender who supported and saved Pelican Resort for so long can be seen in any way other than heroic.

Although Pelican Resort Club had previously defaulted on its loan payments for more than nine months in a row during the 2008 worldwide recession, the lender and new owner was lenient, did not cancel the loan, sat down and actually agreed to reduce the annual interest rate from 10% to 8% and reduce the default annual interest rate from 18% to 10% at the end of 2009. Furthermore, the lender waived all accumulated default interest debts.

This was a multi-million dollar savings for Pelican Resort and a renewed opportunity for prosperity. The loans were fully restored to good standing and the monthly mortgage payments were made on time from the end of 2009 through July 2010.

This was deemed an extraordinarily lenient action on the part of the lender, which would have been within its legal right to foreclose on the property more than two years ago. But foreclosure was never the lender's intended goal. The lender simply wanted its loan repaid. Nothing more and nothing less.

Despite the new debt repayment arrangement and the leniency shown by the lender, Pelican Resort Club, upon mandate of its newly elected Board of its shareholder, The Tenants Association Pelican Resort Club, basically decided not to pay its loan anymore.

In a bold and aggressive strategy, the TAPRC’s USA attorney directed management on June 17, 2010 NOT TO PAY the contractual loan payments. On July 2, 2010 the same USA attorney for TAPRC advised that Pelican would pay their bills if the lender and management would agree to restructure their contractual relationships. In hindsight it is very clear that this was not a well-advised legal plan.

Furthermore, the previous owner spent a significant portion of its 2010 operational revenue, unbudgeted – comprised of fees collected from timeshare owners – to hire U.S. attorneys and consultants who appear to have promised to find legal loopholes to cancel its debt with the lender. Despite there being no reasonable or legal grounds on which to take these aggressive actions, the previous owner pursued this strategy and intentionally continued to default on its loan payments.

It was only then that the lender, faced with an unreasonable and indignant borrower (TAPRC Board), decided to cancel the loan and exercise its legal rights to foreclose on its security, namely the Pelican Resort Club property. The Court of First Instance deemed this justified by the public verdict dated Dec. 14, 2010.

Two days later the investor bid on the resort at the auction on Dec. 16 as an attempt to safeguard its investment. The auction was open to the public, however, despite more than a month of extensive advertisement in the media to prospective bidders, the lender and now new owner was the only bidder as no one else was interested in purchasing a property riddled with financial and operational difficulties.

The new owner was aware that running the resort would constitute a great challenge, largely due to the negative propaganda campaigns implemented by the Board of The Tenants Association Pelican Resort Club and some misguided timeshare owners surrounding the resort and its operations. In order to operate the resort a significant amount of capital would have to be invested to keep the resort open.

In contemplating whether or not to operate the resort, instead of closing it until another buyer is found, the new owner realized that the budget deficit for 2011 was greater than ever, namely in excess of US$4 million. The endeavor continues to be challenging due to all the negative publicity from a small group of dissatisfied timeshare owners who are unhappy they lost their indirect “ownership” of the property, but at the same time, were unwilling over the years to keep supporting and investing in Pelican Resort Club so that it could remain operational.

Despite these challenges, which are, in principle, enough for any lender to simply close the resort until a buyer is found, the new owner opted to commence operation of the resort on January 26, 2011. This decision was largely based on social and economic reasons with consideration to the impact the closure would have, not only for the 200 people that worked at the resort directly, but for the additional approximately 200 people employed by independent tenant businesses which had operated out of the resort, as well as those working at the restaurants, shops, and casinos throughout Simpson Bay, which are all dependent on the tourist traffic attracted by the largest timeshare resort in St. Maarten.

In order to operate the resort in a financially sound and responsible manner, however, the new owner could not take the same operational approach that led to the cash shortages, and ultimately, the second downfall and second foreclosure of the property (land and buildings) of Pelican Resort Club.

As the cost of employment constituted approximately 50% of the operational fees of the previous resort owner, the new owner had no choice but to responsibly address this disproportionately high percentage in order to reduce the resort's operational deficit and increase its efficiency. Although every option was thoroughly evaluated, it was simply not possible to take on the debts of the previous owner that built up over 30 years in order to sustain the long-term viability of the new property.

The general public should know that the resort is presently running with 55 workers employed by the new operating company and approximately 120 service providers working four days per week. Previously, the resort was running under the old owner with 200 full time employees of Pelican Resort Club, The Management Company N.V. and approximately 90 additional service providers working four days per week.

One should ask oneself how it is possible that the resort can function in peak season perfectly with the amount of people that are currently working there. The answer is simple. More employees are not needed. This means that the resort can operate effectively and efficiently with closer to 100 employees, versus the 182 employees the Windward Islands Federation Of Labor (WIFOL) is demanding the new company hire.

The WIFOL Collective Labor Agreement had productivity standards far below what a person can reasonably perform in a normal workday. In 1996 the TAPRC chose to accept the union terms and the resort, and all the timeshare owners, have been paying the price ever since.

The new owner decided nevertheless, being fully aware hereof, to initially offer employment for six months to all employees that worked for Pelican Resort Club, The Management Company N.V. That proposal – and all others were rejected – including the last offer to employ at least 145 employees of the previous owner, directly and for an indefinite period of time (fixed employment).

The new owner negotiated for more than 32 days with the representative of the employees of the old owner in order to reach a consensus so that the majority of workers could be offered employment with the new owner when it commenced operating the resort.

Unfortunately, WIFOL adopted a rigid position in demanding that all employees of the old owner be employed with the new owner and with same terms and the same Collective Labor Agreement. The investor and new owner offered compromise after compromise, but no consensus was reached.

Finally, an agreement was reached and signed by WIFOL’s President Mr. Theo Thompson, but WIFOL would not agree to abide by the very compromise reached by its stated representative. WIFOL appeared unwilling to negotiate and refused to accept the current economic reality that faces every person and every business today.

Hotel and timeshare properties throughout the Caribbean and the entire world have been forced to reduce employment in order to cope with the global recession. It is a decision that no management company enjoys making, but it is an unfortunate necessity, as businesses need to remain viable in order to sustain their operation in the long-term and continue to provide any employment opportunities.

The ruling of the St. Maarten court dated Feb. 8, 2011, created another new and unforeseen challenge for the new owner. In addition to facing an operational deficit in excess of US$4 million, it now immediately incurred an additional liability and debt of over US$4.1 million – a liability that must be paid when terminating a labor agreement, further contributing to the lender's overall debt – bringing the total 2011 budget deficit to more than US$8 million. This is on top of the US$30.5 million it bid to purchase the resort as well as millions of dollars of loans to the previous owner that it has yet to recover.

The court’s recent decision directing employment of all 182 union workers under identical terms as the previous employer – if upheld – would add an additional burden of approximately US$1.5 million to the resort's annual budget deficit. It is obvious to any casual observer that these debts are unsustainable.

The new owner has valid concerns regarding the wisdom in employing workers who – as a result of the breakdown in WIFOL negotiations and negative feelings which have been fanned by the continued negative publicity efforts of the Board of the TAPRC – it must anticipate may not be willing to make a positive contribution to the resort. The 50+ employees of the previous owner who did come to work for the new owner are performing at high quality levels and with excellent attitudes.

A small number of timeshare owners led by the new Board of the TAPRC have continued to sit on the sidelines, criticize and allege all types of conspiracy theories – without taking constructive action to work towards a positive future for the resort, its previous employees, timeshare holders and St. Maarten.

The simple reality is that no one, except for the new owner, has been willing to invest the large sums of money in the Pelican Resort Club required to keep it in operation – including the timeshare owners themselves, who've enjoyed annual maintenance fees that are on average 30% less than neighboring timeshare resorts.

It is easy to sit on the sideline and throw stones when one does not have a major investment at risk and is unwilling to aid the resort by reaching into their own pockets, but the new owner, having already invested millions into the resort prior to the Dec. 16 auction, does not have that luxury. In order to operate a financially sound and secure business one must be able to pay its debts and expenses.

The new owner has simply not budgeted for and does not have the financial recourse to pay the unforeseen liabilities and deficits. In addition to these mounting debts are years of deferred maintenance that the previous owner, TAPRC, was unwilling to pay for and which must now be addressed.

..................................................

See next post for the end of the Press Release

 

[plequerre]

end of Press Release



Without the ability to make ends meet, at least not without obtaining additional financing, the new owner is left with no choice but to cease operations effective Feb. 20. This is the only reasonable and, frankly, responsible course of action.

Despite being forced into this difficult action, the new owner is hopeful that a quick remedy will be found and a solution brokered between all respective parties that will allow it to commence operation of the resort in a financially responsible manner.

The new owner deeply regrets the stress the situation has caused for the workers of the previous owner as well as the timeshare holders whose vacations will be affected, but it simply cannot operate the resort at a loss without any strategy or ability to reduce its budget deficit and increase productivity in the foreseeable future. The new owner is also distressed by the impact these events have had on the people, business owners and government of St. Maarten.

The new owner will continue to strive toward a solution to bring down expenses to a reasonable and manageable level, to increase efficiencies in labor and utilities, and to attract additional financing to pay for the expenses in a responsible manner. The new owner and will keep the General Public apprised of its efforts as having a viable operating resort is ultimately in the best interests of all.

 

[deemac]

TAPRC was the Tenant Association of Pelican Resort Club. The governing board of the resort,.....the owners association.
It was dissolved by by Richard Corso and Richard Sutton of the Royals Management, and QIT, Quantum Investment Trust, the current owners of the resort. QIT was the mortgage holder which Royal Management failed to pay, forcing the forclosure. QIT is controlled by Richard Sutton, owner of the Royal Resort Organizations. So his management company failed to pay his fincance company, so that his finance company could forclose and buy the resort. Then as owner, QIT collected maintenance 2011 fees, then fired the employees, then closed the resort. Sutton, Corso and the Royals now have the unpaid wages, collected 2011 annual resort maintenance fees...... and closed the resort. A big Con job! The Royan Mayan in Cancun is next!

Absolutely, the true story re: the entire saga at Pelican. You hit it dead on.

 

[lunarbrian]

I was in St Maarten for four weeks in January at La Vista which is right by Pelican. Every day there were articles in the local newspaper documenting the problems between the union and the resort. It appears that the court finally held that the new owners had to employ all 182 employees of the former owner under the same terms. Apparently that was the final straw for the new owner so they shut the resort down. From what I was told, labor law in St Maarten is even tougher than the U.S. Once an employee's probation period is over it is virtully impossible to ever fire them. My guess is that is why you don't see any major resorts like Marriott, Hyatt in St Maarten. There is a new Westin but my understanding is that the Westin negotiated a deal with the government that different labor rules will apply to them. While I understand the desire of the country and the union to protect the workers, resort owners do have the right to make a profit too. Maybe the resort was poorly run in the past and that's why it went bankrupt-I don't have that knowledge. But it sure looks like the unwillingness of the union to compromise and the support of the court ruling has cost 182 people their jobs and inconvenienced a lot of timeshare owners,