PHILIPSBURG–Developer Aquarius Company Ltd. and landowner Sabra N.V. were declared bankrupt by the Court of First Instance on August 20, 2013. Almost five years later, the bankruptcies of both companies are still not settled.
The Aquarius project, construction of which started in 2007, was to consist of 280 beachfront condos and seaside villas, a casino and a spa. According to the sale agreements, the tentative closing date for construction was set on or about November 2008. There were approximately 75 buyers for the entire project.
However, construction for the project ground to a total standstill and the apartments were not finished. Buyers, primarily from the United States, dissolved the sale agreements of their properties in 2009. According to them, Aquarius was obligated to pay back every payment, and filed for bankruptcy because Aquarius persistently refused to do so.
Together, the plaintiffs invested millions in real estate at Red Pond, but never will get their condos and may not see their money back either.
The project was to be financed by a bank loan and customers’ instalments. However, the company was unable to pay the mortgage and the land was auctioned by the bank and sold on November 29, 2012.
Trustee in the bankruptcy, attorney-at-law Norbert Nijmans, petitioned the Court to make a provisional decision under which the owners of both companies – four members of the Erato family – are to be ordered to each deposit a US $1 million advance in a third-party account in anticipation of a judgment in the main proceedings or an amicable settlement.
In the main proceedings, the trustee is calling on the Court to sentence the Erato family to pay their almost $5 million debts to Sabra’s current account, with six per cent interest per year, from January 1, 2017.
Furthermore, the trustee wants the Court to order John, Mark and Andrew Erato to pay the yet-to-be-established total deficit of the bankrupt companies Sabra and Aquarius, or to order them to pay damages. Besides, the trustee requested the annulment of 39 transfer deeds for apartment rights and a parcel of land from Aquarius and to sentence Rainbow Beach Club Resort Hotel Facilities Co. Ltd, World Tours Company Ltd. and Anne Folly Co Ltd. to restitution of these items to the estate.
Future Enterprise Co Ltd. and Imperial Company Ltd. were to be ordered to return two apartments to the estate to be sold off, and the Court was also requested to declare null and void the annulment of Sabra’s $228,388 claim on Antilles Management Enterprise Ltd.
All these companies are based in Anguilla and belong directly or indirectly to the Erato family’s assets. According to the trustee, family members unlawfully “emptied” the bankrupt companies by giving themselves dividends. The financial situation did not allow for such payments, which contributed to the bankruptcies, Nijmans claimed.
The family also transferred company assets – primarily apartment rights – against non-market-conforming prices, which were often not even paid, to family-related companies. As a result, the creditors were disadvantaged, he stated.
According to the defendants, the trustee is handling the bankruptcies at a slow pace, as the shortfall in the estate has not even been established. Besides, he also failed to prove any causality between the alleged irregularities and the bankruptcies, the Eratos said.
According to them, there is no connection. The Aquarius project failed due to the economic crisis of 2008. As a result, American customers could no longer meet their obligations or lost their interest in the project.
The temporary provision to deposit $1 million in a third-party account should be rejected, as the total debt is not yet known, stated the Eratos.
The Judge did not make an immediate decision. Instead, he decided to set an additional hearing for September 18, to see if parties may reach a settlement.
Source: The Daily Herald https://www.thedailyherald.sx/islands/79351-aquarius-bankruptcy-remains-to-be-settled
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