CoH: Court Ruling On $18M Is ‘Welcome Lifeline’
[Updated] Following the Court’s ruling pertaining to the $18 million, the Corporation of Hamilton said the ruling “is a welcome lifeline” as while the “guarantee in question was for $18 million, factoring in the total costs, this figure would have almost doubled” which “would have crippled the City, its services and capital projects for at least 15 years.”
Mexico Infrastructure Funds said they were “disappointed by the Court’s ruling and continue to believe that the Corporation of Hamilton is responsible for repaying this loan” adding that they “intend to immediately pursue recourse in other jurisdictions – namely, New York.”
$18 Million Loan Not Paid Back
MIF, an overseas company, extended an $18 million loan to Par-la-Ville Hotel and Residences Ltd [PLV], with the Corporation of Hamilton apparently signing on as the guarantor.
PLV was supposed 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 supposed to be be repaid in December 2014, however it was not paid back resulting in MIF initiating legal action against PLV principal Michael MacLean and the Corporation.
The police previously confirmed they are conducting a “criminal investigation into an allegation of misappropriation of funds amounting to approximately $18 million,” and, in January 2016, confirmed that a 41-year-old man “has been arrested on suspicion of theft.”
Since this occurred, the CoH has been through an election and is now being run by a new administration, and they filed an application with the Courts asking that the consent order of the Chief Justice ordering the payment of the $18 million guarantee be overturned.
Corporation of Hamilton Statement
A Corporation of Hamilton spokesperson said, “The ruling of Judge Hellman is a welcome lifeline for the Corporation of Hamilton, its rate payers and those who rely on Bermuda having a functioning capital city. While the guarantee in question was for $18 million, factoring in the total costs, this figure would have almost doubled.
“This alone would have crippled the City, its services and capital projects for at least 15 years.
“The ruling will allow the Corporation to concentrate on recovering other lost revenues and get itself back on its feet, not only in terms of those services and works but also in terms of further fiduciary responsibility and accountability.
“The Corporation anticipates that, despite their press release, MIF will appeal the ruling in Bermuda as they have already indicated to the courts to that effect.
“Until they make it clear that they are no longer seeking a ruling through the appellant process and have chosen another means of trying to secure a different ruling, the Corporation of Hamilton cannot comment further.
“A careful reading of Judge Hellman’s ruling may provide clarification as it pertains to the comments made in the MIF release on the Rule of Law and Contractual Law.”
Mexico Infrastructure Funds Statement
A statement from Mexico Infrastructure Funds said, “We are disappointed by the Court’s ruling and continue to believe that the Corporation of Hamilton is responsible for repaying this loan.
“They unilaterally signed off on releasing the monies we lent to the hotel project, which are now known to have been misappropriated, and it was clearly within their power to issue a valid guarantee on the loan.
“We intend to immediately pursue recourse in other jurisdictions – namely, New York, as laid out in the demand letter that was delivered to the Corporation of Hamilton – to pursue what we believe is a just solution in this matter.
“We will explore additional jurisdictions to ensure that the rule of law is upheld and that future creditors to the Corporation and to Bermuda do not have their claims expropriated.
“It is unfortunate that this issue has not been settled and will continue to besmirch the reputation of Hamilton and Bermuda as a whole at a time when the country will be in the global spotlight.”
Update: The full Court ruling follows below [PDF here]:
