“Potential Power Of Sale” Over PLV Car Park
Speaking on the Par-La-Ville car park being placed under receivership due to an outstanding $18 million loan, Home Affairs Minister Michael Fahy said “there would be a potential power of sale.”
Last year, US-based Mexico Infrastructure Finance LLC [MIF] extended an $18 million loan to Par-la-Ville Hotel and Residences Ltd [PLV], with the Corporation Of Hamilton [CoH] signing on as the guarantors.
PLV is the company that has an agreement to develop a hotel on the Par-La-Ville car park, and the $18 million was a bridging loan which was supposed to be used to secure financing for the hotel development.
The loan was to be repaid by PLV by end of December 2014, however the loan was not paid back resulting in MIF initiating legal action in the Bermuda Supreme Court against both the CoH and PLV principal Michael MacLean in early 2015.
Following the non-payment of the $18 million loan, KPMG were appointed as Joint Receivers over the Par-La-Ville car park on March 31, 2015.
In practice this means that the CoH will still operate the Par-la-Ville car park, but income collected will be turned over to the Joint Receivers to pay down the debt owed by PLV to MIF.
When asked at last week’s press conference what the plan moving forward in regards to the $18 million, Minister Fahy said, “That’s now going to be up to the Mexican Infrastructure Fund and advice they may receive from their attorneys or the joint receivers under whatever agreements they have in place to effect what they have now done.
“In point of fact, the Corporation was the guarantor and that is the legitimate way in which the Mexican Infrastructure can enforce the debt. We will continue to work with the joint receivers to see what can be done.”
Screenshot of one section of the draft agreement [PDF] of the loan from MIF to PLV
When asked if there were concerns that they would be able to take control the property, Minister Fahy said, “There would be a potential power of sale, but we’re not at that stage yet, as far as I can tell.
“Should that eventuality become a reality, or looks like it will become a reality, of course, as steward, I will make the relevant notifications.
“But unfortunately we’re in a position, not quite as bystander, but we can help facilitate the collection, but the guarantee was given under the council; they gave the guarantee, they signed the dotted line, they passed the resolution, so that has to be thought about and really considered as to the reason why stewardship is in place.”
Screenshot of one section of the draft agreement [PDF] of the mortgage particulars
The draft agreement of the mortgage particulars said “If the borrower fails to make any of the payments” it shall “be lawful for the lender, in addition to the power of sale, to appoint a receiver to receive rents [if any] or any other income from the property [including without limitation all sums resulting from the use of the property as a public car park].
Both Minister Fahy and KPMG — who have been appointed the Joint Receivers — have said that in practice there will not be any difference for the public when using the car park.
“Users of the Car Park should continue to utilize the usual payment options including the EasyPark device,” said Minister Fahy, while KPMG said said they are “working together with other stakeholders as appropriate to ensure that there will be no interference with the Car Park’s use.”
What became of PLV principal, Michael MacLean? He was not so long ago, “in our face’ with all sorts of bull-crap, it appears to have been just another proverbial, “a six for a nine”. Please place a lean on anything of value he may own and if necessary, have it go towards the $18+ millions of our / Taxpayers, “missing” dollars
That’s not how it works unfortunately Raymond. The Corporation of Hamilton guaranteed the $18 million bridging loan to PLV (Mclean) by offering up the car park as collateral. So the question is does the CoH have any recourse to get the $18 million back from PLV to settle the debt and buy back the car park now that it is in receivership with KPMG?
I believe what the Minister is saying above is, he as the acting Steward of the CoH is working with KPMG, to once again, sort out the CoH council’s mess!
Its the CoH Council, as guarantors who should be investigated and held to account, once again for their ‘stupidity’!
MacLean has questions to answer, no doubt about it. And you are right that he gone conspicuously and uncharacteristically quiet.
But the possibility of holding him accountable financially for the dissipated funds is almost certainly a non-starter. The borrower was PLV — a limited liability company created just for the purpose of development. I would be very surprised if it had any significant assets of its own.
And people have the nerve to criticize the Govt for cancelling the Waterfront Contract given to the same developer (Maclean)?
I hope he loses his lawsuit and is made to pay.
The problem is, this is not surprising …. and that is a dangerous place to be in.
What a joke! W
Where did the $18m go? It’s not like they broke ground or anything. What the actually hell?
So much for a new hotel in town. Next domino to fall will be the ol’ Club Med (again).
Like him or hate him, Fahy & cabinet tried to work with this lot, in spite of their past behavior and got burnt!
I’m glad you brought that up…….
In November 2013 the OBA pushed hard to allow the Par La Ville Car Parking lot to be used as collateral
“Therefore, Mr. Speaker, there are appropriate checks and balances in place that will be used to protect the assets and protect the land in the best interest
of the people of Bermuda.
Mr. Speaker, the Corporation of Hamilton hasconfidently embarked upon this course of action in good stewardship of the City of Hamilton and for the
betterment of the people of Bermuda.
The Government looks forward to the realisation of a five-star hotel on the site of the Par-la-Ville Car Park, and the Government supports the approval
of this agreement.”
Deputy Premier Michael Dunkley.
Nov 2013
“Today’s motion demonstrates the Government’s support for the project in aiding the developer to raise the necessary financing to bring this project to fruition,” Mr Fahy said.
“It is intended that the guarantee is subject to very specific criteria and the Corporation of Hamilton will be required to conduct thorough due diligence, to the satisfaction of the Bermuda Government, before execution of what is essentially a collateralised mortgage.” –
Michael Fahy, November 30,2013.
Are the police involved? Do they need assistance from overseas?
Are the local regulators involved or is this just considered a civil matter and the Hamilton rate payors are SOL in finding out where their tax payments have gone?
Have the CoH council members and PLV Directors and Officers been issued with orders to prevent the destruction of any evidence, whether hard copy or electronic form? What is being done to protect the records – such as they are?
Are the Gibraltar regulators cooperating in tracing the funds sent to Argyle and providing Bermuda with beneficial ownership details and where the funds where sent after they received them?
I believe one of the local banks, through their trust operations, were involved in PLV. Are they cooperating fully with the regulators.
Who were the banks involved in Bermuda and Gibraltar and are they cooperating?
Have the PLV records been seized by the receivers and are they complete?
If this were the US, you’d see filing cabinets being wheeled out and computers seized. In Bermuda, the focus seems to be on whether or not we can continue to park our cars in the lot. FFS, $18 million has disappeared in less than four months through an anonymous company in a shady jurisdiction and Fahy says he’s little better than a bystander. Don’t stand too close or you’ll likely get hit in the butt.
@ Family Man: As they say, “only in Bermuda” Yes indeed, Bermuda is truly another world…
no matter “where in the world” you are, if you default on a loan…what happens??
IF WE DON’T PAY! ie:(GOVT.)…GUESS WHO WILL OWN THAT PIECE OF BERMUDA…That’s right Juan de Bermudez once again …lol
that worthless troop of misfits at COH should be hanging their heads in shame. with all that money that was spent on legal advice, one would have thought that there was some recourse for COH if PLV defaulted on the loan for which they stood as guarantors…because nothing about this transaction makes any fiscal sense.
13 Dislikes< Hmmm, how many people on the board?
@ Purple – my thoughts exactly. “Team Hamilton”?
2nd thought…perhaps the Dislikes didn’t like my choice of words. i should not have used the word “troop”…
The moment someone at COH pulled the race card – it was obvious there was no genuine or reasonable excuse. Just cover ups and deflection using the same tired old method.
Note: The race card is sooo last decade. Sooo PLP.
Hmm i wondered what happened to all these hotel deals
It is ironic that MEXICO INFRASTRUCTURE Finance extended the load to build a hotel in Bermuda. Bermuda is fast becoming a third world country.
you do know who IS the Mexican Infrastructure right..? oh and your last sentence has been on someones agenda for the last 30 years.
When will the OBA going to figure out that they will never will be able to trust certain people . Stop making deals with them ! They just take advantage of you and make you look like fools . Stand up and make decisions that will protect the man in the street who always has to end up paying !!!
You better believe there are a lot of people watching to see how this pans out in the days ahead and if the 18 million is not recovered , and no one is made responsible in the courts . DO NOT COME KNOCKING ON MY DOOR FOR A VOTE NEXT TIME AROUND !!!!!!!!!
OK, so the OBA trusted somebody they shouldn’t have, and you and I could have told them that.
Problem was the untrusted were the PLP plants at CoH. The OBA did what they did in good faith hoping that the best might be done for Bermuda. Instead the money was grabbed and now it’s gone. (big surprise there)
So now you say that you won’t vote for the OBA? WHo are you going to vote for then?
Where do you think that money is anyway? In whose pockets did it wind up? Not anybody from the OBA that’s pretty sure. So who’s left? weeeeellllllll ……
@ Just a thought: I would imagine you’re referring to all politicians with this statement, “DO NOT COME KNOCKING ON MY DOOR FOR A VOTE NEXT TIME AROUND !!!!!!!!!” ?
this is the PLP’s fault! OBA please fix this. you are doing a good job so far. sort this out. thanks.