Jomo Thomas has made factual errors, and applied the law incorrectly in Sandals Resorts matter – Glasgow
Editor: Following the recent announcement by Sandals Resorts International that it will establish a 350-room Beaches Resorts at Buccament, and the publication of a column by Mr. Jomo Thomas expressing his opinion about the obligations of Sandals Resorts International, the Government of St Vincent and the Grenadines, KPMG and me, as Bankruptcy Trustee; I have received enquiries from a number of former employees of the Resort. In this regard, I am obliged to point out what in my opinion, are a number of factual errors made by Mr. Thomas, and my position that he has failed to properly apply the law to the facts of this particular transaction.
Prior to the closure of the Buccament Bay Resort in 2016, a number of distinct legal entities were involved in the ownership, management and operations of various resorts and developments in the region. These separate companies included Harlequin Property (SVG) Limited, Buccament Bay Resorts Limited, Harlequin Resorts (St Lucia) Limited, Harlequin Boutique Hotel Limited (St. Lucia), Harlequin Hotels and Resorts Limited and Harlequin Management Services (South East). These companies were incorporated in various jurisdictions, including St Vincent and the Grenadines, the Cayman Islands, Saint Lucia and the United Kingdom.
There has been considerable litigation in the courts of St Vincent and the Grenadines, the Cayman Islands, Ireland, and the United Kingdom to untangle and define the roles of the various companies listed above. Indeed, there was litigation about whose law would apply to liquidation, and which companies should be wound up in particular jurisdictions.
I was appointed as Proposal Trustee, and later as Bankruptcy Trustee, of Harlequin Property (SVG) Limited. Harlequin Property (SVG) Limited was the owner and developer of the Buccament Bay site and a 70-acre property in Merricks, Barbados. Critically, while Harlequin Property (SVG) Limited is a property holding company, it did not at any time manage the operations of any resort, or employ hotel staff at any of the properties being developed across the Caribbean. Staffing, management and operations were the responsibilities of other distinct entities (for example, Harlequin Hotels and Resorts Limited and Buccament Bay Resorts Limited).
I was not appointed as the Liquidator or Bankruptcy Trustee for these other companies. My legal responsibilities, as defined by the High Court of St Vincent and the Grenadines, are to deal with the assets and creditors of Harlequin Property (SVG) Limited.
As Bankruptcy Trustee of Harlequin Property (SVG) Limited, it is my responsibility to ascertain who the company’s creditors were and to distribute any realised assets between those creditors in accordance with the law of St Vincent and the Grenadines. Subject to the claims of certain creditors who may have priority interests, the assets are shared between the general body of unsecured creditors in proportion to the size of their claim. There was a lengthy and extensive legal process to determine precisely who the creditors and investors of Harlequin Property (SVG) Limited may be. The workers discussed by Mr. Thomas are not among the creditors.
The Government of St Vincent and the Grenadines acquired land that was held by Harlequin Property (SVG) Limited, and has indicated its intention to convey that land to Sandals Resorts International. It is my legally-mandated duty to receive the proceeds of that acquisition and distribute them to the recognised creditors of Harlequin Property (SVG) Limited. It would be illegal and unethical for me, as Bankruptcy Trustee, to use any proceeds from the liquidation of Harlequin Property (SVG) Limited to satisfy any group that is not a creditor.
The land at Buccament was an asset owned by Harlequin Property (SVG) Limited. The monies realised by its acquisition will be divided among the creditors of Harlequin Property (SVG) Limited. Similarly, when a sale was agreed in 2019 for the 70-acre plot of land in St. Phillip, Barbados that was owned by Harlequin Property (SVG) Limited, the same pool of creditors stood to benefit. It is worth noting that those creditors are owed hundreds of millions of dollars by Harlequin Property (SVG) Limited, but will likely receive substantially less than their claimed amounts by the end of the liquidation process.
I would not presume to enter into a legal debate with Mr. Thomas, who is a well regarded attorney. However, I will note “en passant” a few of his assertions that may require further reflection on his part.
Mr. Thomas quotes the “binding” Protection of Employment Act as support for his assertion that money is due to former workers of the defunct resort as a consequence of this transaction. However, the very sections quoted speak to an employer-employee relationship that never existed between Harlequin Property (SVG) Limited and the hotel staff of the former resort. Nor for that matter, is the acquisition of the property a case of the purchase of an on-going business that is in operation with a current staff. The Buccament Bay Resort closed its doors in December 2016 – well before the Government acquired the property, and certainly long before Sandals expressed any interest.
In a recent private discussion with Mr. Thomas on this matter, we contemplated an insolvency process where creditors of multiple separate companies can all demand relief whenever certain related or associated entities are liquidated. However, while this may be a desirable solution, I am advised that this principle is not yet enshrined in our local Companies Act or bankruptcy law.
In this instance, and in the prevailing circumstances, I recognise that Mr. Thomas may not have been aware of all the relevant facts, and I submit that he has made factual errors, and applied the law incorrectly to those fallacies.
Brian A Glasgow