Govt Starts Legal Proceedings Over Caroline Bay

March 26, 2020 | 7 Comments

The Bermuda Government has “commenced legal proceedings intended to place the assets at Caroline Bay under the control of Provisional Liquidators.”

Last year Finance Minister Curtis Dickinson confirmed that the developers defaulted on their loan, and since the previous administration provided a guarantee of up to $165 million for the project it “resulted in the government having no choice but to raise the debt ceiling in order to borrow monies to fund the payments.”

The Government subsequently announced that it “successfully completed the purchase of the Caroline Bay project loans that were subject to Government of Bermuda guarantees.”

A look at the now stalled development as it appeared in late 2018:

Caroline Bay Development Bermuda, October 5 2018 (6)

This evening a Government spokesperson said, “Earlier today, the Bermuda Government commenced legal proceedings intended to place the assets at Caroline Bay under the control of Provisional Liquidators.

“The Developers acknowledged in February 2018 that they were unable to pay their debts, and while the Government has done everything prudently possible to support efforts to refinance the project, to date the Developers have failed to provide an acceptable way forward.

“Senior members of EY [Bermuda] were appointed as Joint Provisional Liquidators who will take control of various project companies, representing the collateral behind the original project loans and Bermuda Government guarantees.

“As the Government has expressed previously, the intention is to protect the interests of the people of Bermuda to the fullest extent permissible under the law.

“The Minister of Finance, the Hon Curtis L. Dickinson, will hold a press conference tomorrow [27 March], at 11 am, at AB Place, to provide more information about these proceedings.”

Update March 27, 11.08am: The broadcast from the Government media is below

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Comments (7)

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  1. Donderered says:

    I hope at the press conference that someone asks the FinMin about financial aid for businesses

  2. Y-Gurl says:

    Not clear knowing what we know why anyone would buy a house that close to sea level

  3. Kathy says:

    Each of these wealthy developers should have to empty their pockets and declare bankruptcy and give everything they personally own over to the Bermudian people.

    What an incredible disgrace! The OBA should be ashamed of throwing Bermudians further into debt. If they didn’t have the money themselves to develop the property, they should never have been granted permission and certainly never, without the permission of the people been granted a $165M guarantee of our money!

    ABSOLUTELY SHAMEFUL!

  4. Very good, Bermuda Government. Hold those reponsible for this.

  5. Hold those responsible for this!!!!O.B.A. ers WILL BE MOST UNCOMFORTABLE. Hold O.B.A. accountable!!

  6. Charlly X says:

    The Rule of Probability still rules.

  7. Voters Voters Voters - Demand Better in 2021 says:

    I try to avoid the constant PLP vs OBA ping pong criticism.

    But if the OBA knew, as does the PLP, that Bermuda’s visitor numbers (both business and tourists) continue to forecast as WEAK for the next 5-10 years, why:

    - Build this white elephant?

    - Why were the Developers not forced to take the financial risk, like any other hotel development internationally?

    - Did the OBA take this risk on our balance sheet by Guaranteeing it ($150m+) PLUS + the Recon Airport ($200+), knowing full well that these Projects don’t drift into positive IRR unless you have visitor numbers over 850,000 – 1,000,000+ a year

    - all points above, weren’t the OBA adamant they were reducing the debt after Uncle Richards looking under the hood?

    Then we get this condescending “Mr and Mrs Bermuda” line like we are all lining up outside a Minister’s office waiting for a handout or Government contract.

    Why haven’t we passed “Insider dealing” style legislation here in Bermuda so that when fishy transactions finally come to light that have no basic financial merit (ie a bank won’t even lend you the money on standard loan terms), that the promoters of the transaction have to be held accountable?

    All these fractional real estate projects need to be stopped, this is what Dept of Planning should be enforcing and our politicians, a system of “business” and “entrepreneurs” that are in fact solely reliant on Government contracts, Government guarantees, and basically Government welfare because all their projects are basically I’ll conceived “scams”, but we buy into them under the guise of creating jobs, growing the economy and the usual punch lines to get a government line of credit these projects are similar to financial assistance, but on steroids.

    Voting out a Government and its Ministers is not a sufficient sanction for the $2,500,000,000+ debt burden that my great grandchildren will despise me for, oh I forgot they will live in Canada or UK right?

    Shameful that these ” scams” dressed up as projects make it past the army of consultants, permanent secretaries and civil servants who themselves appear now to be recipients of a pumped up welfare payment each month.

    How do we go from surplus in Feb 1998 to this level of financial crisis in March 2020 and the people aren’t marching in the streets like the BELCO riots, or more recent 2 or 6 December Pepper Spray Day? And how that Policeman still employed and not redeployed back to UK to spray COVID-19?

    This is why I don’t follow this foolishness

    Looking forward to Bermuda’s next general election and a more responsible voter demanding more than we have gotten even if that means stepping out of our comfort zone and not voting for people who have been around from before I was born telling the same stories and getting us into this mess.

    We must demand better Leadership in 2021 or 2022

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