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Sale of Pelican Resort declared null and void

page1a074PHILIPSBURG--The Court of First Instance on Tuesday declared null and void the disputed December 16, 2010, auction of Pelican Resort and Club.

In the court case on the merits, the former owners of Pelican Resort, now Simpson Bay Resort, successfully challenged the legality of the auction, which was called after the owners of the resort fell behind with their mortgage payments.

Lender Quantum Investment Trust (QIT) auctioned off the resort in a public auction on which it submitted the only and winning bid and became the owner of the resort, after which QIT transferred ownership to Simpson Bay Resort Owner Company B.V. (SBROC), an affiliated company.

Transfer of ownership took place in a so-called "Deed of Command" signed on January 26, 2011, by notary Henry Parisius, who is now retired.

This court case revolved around the question of whether all obligations deriving from the general and legal conditions of the auction indeed were complied with.

According to claimants, the purchase price of US $30.5 million was never deposited with the notary. This is against the law, which states that a transfer of funds on real estate must always proceed via a notary.

QIT apparently had attempted to write off the debt of the previous owners in lieu of payment when it took over the property. However, a settlement such as this is prohibited, the Judge ruled.

The Court also found no proof of the existence of a so-called Certificate of Payment to show that any payment actually had been made. The purchase price was never deposited on a notary-appointed bank account, which was in violation of the Civil Code and the auctioning conditions.

According to the Court, Quantum and SBROC were, and still are, bound by law to deposit the purchase price with a notary. This means that the resort's real estate was not transferred legally from Quantum to SBROC, which also entails that the writs of attachment were not voided by auction, the Court stated.

This led the Court to the conclusion that Pelican Resort the Owner Company N.V. is still to be considered the resort's legal owner, which brings parties back to the situation that existed prior to the December 16, 2010, auction.

Therefore the Court declared the transfer of the resort from Quantum to SBROC null and void.

It also was stated that notary Parisius had been at fault in acting in contravention of the Civil Code and therefore could be held liable for damages incurred. He was sentenced to payment of damages to the foundation representing the interests of Pelican Resort and Club and its subsidiaries Pelican and Pelican Resort Club the Management Company N.V.

The notary also was ordered to pay damages to two individual timeshare owners from the United States. Robert Russo and Franklin Biddar were participants in the PCIP Investors programme, through which Pelican Resort's owner had borrowed money to renovate the resort. Both had lent the resort $100,000, but never were paid back.

Quantum, SBROC and the notary all were sentenced to payment of NAf. 8,563 in legal fees.

"This verdict will have big repercussions for St. Maarten," stated the claimants' lawyer Gerrit van Giffen by telephone. "Investors in the resort have still quite a few outstanding claims. The resort was auctioned for less than nothing, after which no one was paid anymore. Now is the time for all parties to go and sit around the table and reach a settlement.

"I understand that the Court's decision is painful for the new owners. We will be prepared to come to a solution, but the people who suffered damages must be compensated, especially the investors. Hopefully, the doors will be opened now for us to engage in talks."

It is expected that Quantum, SBROC and notary Parisius will file an appeal against the Court's decision.

Caravanserai goes to anonymous buyer

PHILIPSBURG--A buyer who has opted to remain anonymous won the Caravanserai resort, land and apartments at a public auction held by Tjon Ajong and Associates at Pasanggrahan Beach Hotel yesterday morning.

This was the third time the assets had been put on auction and they sold for some US $14 million, in comparison to the initial asking price of $20 million.

Two bidders purportedly were in the running for the purchase, amidst a room of around 50 people.

The buyer's intentions could not be established and his representative at the auction, Chris van Amersfoort of HBN Law, declined to relay any information on his client's intentions or identity.

Roeland Zwanikken of BZSE Attorneys at Law/Tax Lawyers who represented seller Scotiabank said the bank was happy with the outcome and happy to have the situation behind it, even though the price is $3 million below the accrued principal mortgage in addition to other costs. Kildare Properties Ltd., owner of the Caravanserai property since 1996, has a current debt with Scotiabank of approximately $17 million.

The property was priced at $20 million at a first auction on February 12, but there was no buyer. A second unsuccessful auction on April 3 offered the assets at a reduced $16 million. The last auction, which sold them for $14 million on August 13, advertised a "reserved price" of $12 million.

The bank had won a previously-filed injunction filed by International Financial Planning Services (IFPS) and summary proceedings it had filed against Kildare and its statutory owner Haresh Manek in relation to the assets concerned. Kildare had failed to meet its financial obligations to the bank on a mortgage on the Caravanserai property amounting to some $14.2 million, including interest and cost.

According to Scotiabank, Kildare and buyers of so-called "deductions" repeatedly had tried to prevent and thwart the auctioning of the bank's mortgage rights. Kildare had tried, illegally and without permission, to alienate long-lease rights on parcels of property, the bank claimed.

The Court had taken into consideration that the bank already had incurred considerable cost in its previous two efforts to sell off the long-lease rights.

Kildare had rejected the Bank's claims. However, the Court found that Kildare had defaulted in selling off long-lease rights to the previously-mentioned companies without Scotiabank's permission and, as a consequence, had harmed the bank's interests seriously.

This resulted in difficulties for the bank in selling off its rights of mortgage on the resort, aggravated by the fact that the land rent was "exorbitantly" increased.

Minister of Public Housing, Environment, Spatial Planning and Infrastructure Maurice Lake had signed a decree on June 27 in which the land rent on Kildare properties was increased from NAf. 0.01 to NAf. 8 per square metre, which the Court said "frustrates the success of the auction, while no insight has been provided why at this moment it was decided to exorbitantly increase the land rent."

The Court ordered Kildare and Manek to cease immediately with the splitting or transfer of long-lease rights and terms, and forbade them to request Country St. Maarten's permission for such acts, against payment of $16 million in case of non-compliance.

As a final stage, the hotel furniture also will be sold to the highest bidder at another public auction at Caravanserai today, Thursday.

Shop in secure harbour area victim of night-time burglary

PHILIPSBURG--A Ballerina Jewelers store inside the secure harbour area was the victim of a break-in early Monday morning.

A source revealed that the Harbour's ATT security company system had called around 3:15am to report an alarm. A Checkmate Security safety patrol was said to have gone to the premises to check out the alarm.

As the ATT system can sound an alarm after even a slight disturbance such as a rat or heavy wind, no one was surprised when a report came back from Checkmate that nothing untoward had been found.

However, a new security shift came on duty around 6:15am and discovered that the door to the store was wide open and the shutters broken. Inside the shop it appeared that burglars had taken their time going through cabinets and tills and removing jewellery, watches and some cash. The exact amount of items stolen is unknown.

Another source stated that the burglars had cut through a metal fence to gain entry to the harbour terrain. The initial call from ATT was followed up by Checkmate Security, which also works for the harbour, but in this case was acting under a separate contract with the store.

Checkmate Security Chief Executive Officer (CEO) Michael Kuiperi was on holiday, but a company spokesperson said no statement could be given, as the incident was under investigation at the time and the outcome of that had to be awaited first.

Richard van der Mark of the Harbour Security Department stated that extra security measures had been taken immediately following the burglary, and referred to a press release sent out by the Port of St. Maarten.

The press release stated: "The management of Port St. Maarten has taken additional temporary measures to enhance security at the port after a recent burglary."

A port management security meeting took place on Monday, August 11, to assess the situation. Security was increased in the commercial area and additional cameras will be added there immediately as temporary measures until the investigation has been completed.

The burglary was reported to police and detectives attended the scene to gather evidence and take statements. The incident is under investigation and anyone with any information about the break-in is requested to contact the police.

Labour, Social Services Dept servers sent abroad to be fixed

~ Consideration to avoid gaps in permits ~

PHILIPSBURG--The servers at the Departments of Labour and Social Affairs are expected to be "up and running" in about two weeks, says Labour Minister Cornelius de Weever.

The minister said on Wednesday that the servers had been sent abroad to be fixed. The system went down about four weeks ago due to a power surge and persons have been unable to submit employment permit renewal requests. The power surge resulted in a "total crash" of the system.

De Weever had said in an earlier statement that, despite this setback, the Department of Social Services was continuing to take in and process applications for financial aid, medical aid and legal aid; the Department of Labour Affairs will continue with the handling of job placement and surrounding activities, labour registrations and the submitting of vacancies.

However, he had said at the time that the department was unable to accept applications for employment permits until the server/data had been restored.

Some concerns have been expressed that persons in need of employment permit renewals can be subjected to a "gap" in their papers because of this lengthy delay, which could affect their possible future application for permanent residence as well as in other areas.

When asked what provisions have been made (or will be made) for this group of persons who are currently unable to apply for their renewals and could be subjected to a gap to avoid all the issues that having a gap in one's papers can pose, the minister said "we have considered facilitating the process and taking the fact that the system is down into consideration to avoid them being an issue with the gaps."

The minister said he was "anxiously awaiting" the server being functional again as it has "slowed down" some of the processes at the departments. He said, however, that the departments were "still working diligently to serve the public. It's just that it creates a backlog in the back office and we would not want to have that for too long."

Both departments are still operating half-day from 8:30am to 12:00 noon, Monday through Friday. "They are still working half-days. The afternoons are used to try and work off the backlog as much as possible in any which way they can because once you accept the application of a client, you need to make sure that whatever needs to be done... needs to continue," the minister said.

De Weever says visitor health fee can raise millions for health care

PHILIPSBURG--The introduction of a visitor health fee can raise millions for health care in St. Maarten, says Health Minister Cornelius de Weever.

He told reporters at Wednesday's Council of Ministers press briefing that a health fee of US $1 could be considered to be charged on airline tickets or cruise ships. With the 1,700,000 to 1,800,000 and projections for 2,000,000 cruise ship passengers and 500,000 stay-over visitors, St. Maarten can collect US $2.2 to US $2.3 million, or even US $2.5 million, to be used specifically for national health infrastructure that serves both the resident and visitor populations.

"By introducing a visitor health fee, we can improve the health infrastructure like our ambulance system, mobile medical unit and our health management information system. All of this can be seen in the context of our country moving towards achieving universal coverage in health," he said.

"We can include a public health emergency fund to be established to assist St. Maarten in dealing with public health emergencies to further protect our health against the spread and outbreak of infectious/communicable diseases.

"Our recent experiences with the epidemic of chikungunya or the global transmission of diseases like bird flu or even Ebola highlight their rapid spread and demonstrate the serious health and economic consequences for vulnerable populations like ours.

"Similarly, with the advent of larger cruise ships, the examples of illnesses occurring on these vessels whilst in port, which we experienced in 2012 and the Turks and Caicos Islands as well, highlight the urgent need for public health resources that are capable to deal with these risks as and when they occur."

De Weever said that in addition to meeting the public health risks of infectious diseases, the health system also could address partially the needs arising from trauma and other serious events by providing access to first-line treatment in St. Maarten and assisting with transportation when locally unavailable.

He said that when focus was placed on prevention, health care expenses would decrease: "When we focus on quality care from doctors, our cost will go down and we will continue to hold SZV [Social and Health Care Insurances – Ed.] and SMMC [St. Maarten Medical Centre – Ed.] accountable for quality care and our cost will go down."

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