GREAT BAY – The Court in First Instance has decided to summon Albert van der Waag, a professor of behavioral and clinical medicine at the American University in Cupecoy, to appear in court at a date that still has to be decided as a party in the bankruptcy of Yordan Busarov’s Evmolpia Private Foundation. The court wants to determine whether Van der Waag played a role in the bankruptcy.
The trustees in the bankruptcy, HBN Law attorneys Hendrich Seferina and Maarten Le Poole asked the court to order STC Administrative Services (formerly the Standard Trust Company) and its director Corinne de Tullio-Stamm to pay an amount of a bit more than 2.9 million guilders into the estate.
In 2013, the court found STC and De Tullio-Stamm guilty of mismanagement and held them responsible for the complete deficit in the bankruptcy. The court sentence STC and De Tullio-Stamm to an advance payment of 200,000 guilders, but the total deficit is much higher.
STC and De Tullio-Stamm have asked the court to mitigate their liability saying that the deficit is due to Van der Waag, who has a claim of more than 2.8 million guilders on the estate – 98 percent of the total deficit.
The trustees argue that the court has established the liability of STC and De Tullio-Stamm and that the court has not assumed other causes for the bankruptcy.
By calling Van der Waag to court, the judges want to get more insight in his role in the downfall of Evmolpia Private Foundation.
Today detailed this case in an article that appeared on November 7, 2013. For clarity’s sake, we reprint most of the article here:
Evmolpia’s bankruptcy is linked to a plan to construct an apartment building in Oyster Pond on a piece of land near the turnoff to the French side. Construction started but the building was never finished.
In April 2007, Standard Trust, of which the 50-year-old De Tullio-Stamm is a director, established Evmolpia at the request of Yordan Busarov who was, together with his girlfriend Penka Ivanova Cvetkova the beneficial owner of the foundation. A couple of weeks later, Busarov gave the foundation the piece of land in Oyster Pond. The idea was to build an apartment complex and to sell the apartment rights to third parties.
In June 2007, Twoliwalks Construction – a company of Busarov – signed a contract for the construction of the complex with the understanding that it would be finished within twelve months.
On July 5 Albert van der Waag, a professor of behavioral and clinical medicine at the American University in Cupecoy, bought two rights of apartment in the project for $500,000; he also loaned the foundation $400,000 at a stiff interest rate of 15 percent. In February 2009, the foundation borrowed an additional $775,000 from Van der Waag against the same conditions and with the understanding that the loan was due in August of that year. Van der Waag obtained a right of mortgage for $1,155,000 as security for his loan.
In the same month, the foundation sold three rights of apartment to Pentar Ltd., a company based in Anguilla for $1,200,000. On the same date (February 26, 2009), the foundation sold two rights of apartment to Beehive Realtors NV for $800,000 and the economic ownership of two other rights of apartment to Van der Waag for $500,000.
Interestingly, Van der Waag’s $500,000 purchase contract, the contract with Pentar and the deals with Beehive and Van der Waag’s second contract state that they paid the price in full to the foundation. Together with the two loans, Evmolpia received therefore $4,175 million.
In July 2009, De Tullio-Stamm somehow smelled a rat. As a director of the foundation, the Standard Trust Company “accepted” the resignation of Standard Trust as sole board member and of Corinne de Tullio-Stamm as the sole member of the advisory board. They were replaced respectively by Yordan Busarov and his girlfriend Penka Cvetkova.
Four days after this decision, the loans were not repaid to Van der Waag and the apartments were not ready. Two years later, at a public auction in September 2011, Van der Waag bought five rights of apartment for $500,000.
On February 27, 2012, Evmolpia was declared bankrupt. When Corinne de Tullio-Stamm was questioned as a witness in the bankruptcy on June 11, 2012, she stated that the foundation had never had a bank account and that the foundation never received the two loans from Van der Waag (totaling ($1,170,000).
According to the court ruling, De Tullio also stated: “Liabilities were contracted of which it was in my opinion foreseeable that they could not be honored. The foundation borrowed more and more money against a high interest rate, with short terms and high fines while the real estate market already was not too good.”
On June 25, 2012, the trustees put a lien on real estate belonging to De Tullio-Stamm for an amount of $1,435,000.
The trustees asked the court to declare that Standard Trust and De Tullio-Stamm are guilty of mismanagement and that this mismanagement is a prime cause of Evmolpia’s bankruptcy, to sentence De Tullio-Stamm and Standard Trust to pay the deficit from the bankruptcy and to pay an advance on this deficit of 200,000 guilders.
Standard Trust and De Tullio-Stamm countered that they are suffering damages from the procedure the trustees have initiated and asked the court to sentence Seferina and Le Poole to pay for this. They reproach the trustees for abusing legal procedure and that this is damaging their reputation.
Standard Trust’s reputation – and that of its directors Corinne de Tullio-Stamm, her husband Allard Stamm and Jodi Lynn Garner – suffered already a heavy blow when the company was dragged into the Marcel Loor-investigation with accusations of money laundering. On appeal, the company and its directors were acquitted of money laundering in November 2012, but they were fined 10,000 guilders (almost $5,600) each for failing to report unusual transactions to the Financial Intelligence Unit MOT.
The court rejected Standard Trust’s defense that Busarov was the actual director of Evmolpia. “”This does not set Standard Trust as the formal director free of its responsibilities and liabilities,” the court ruled. That the trust company opposed Busarov’s policy, “is insufficient to assume that it took measures to avert the consequences of Busarov’s actions.”
The court held it against Standard Trust and De Tullio-Stamm that they did not maintain a proper administration for the foundation. That Busarov refused to provide figures to the trust company is irrelevant, the court notes in its ruling: “This does not take away the obligation of Standard Trust to produce annual accounts.”
The court ruled that Standard Trust and De Tullio-Stamm’s mismanagement are important causes of the bankruptcy and that they are liable for the deficit – all the debts that cannot be paid after a settlement.