Corporation To Pay $8.2M To Settle MIF Dispute
The Corporation of Hamilton has agreed to make a one-time payment of $8.2 million in exchange for the “retrieval of property deeds and the conclusion of all legal proceedings in both Bermuda and the United States” to settle the long-running issue with Mexico Infrastructure Finance.
The relevant part of their recently released financials stated, “Mexico Infrastructure Finance LLC [MIF] obtained a summary judgment in the amount of US$18 million against the Corporation on May 27, 2015, [see Note 13] under a guarantee given by the Corporation for a loan to Par-la-Ville Hotel and Residences, Ltd [PHRL].
“MIF sought enforcement of the $18 million judgment debt against the Corporation and PHRL that may lead to uncertainty about the Corporation’s ability to continue as a going concern, if forced to repay this debt out of current income. The judgement was set aside by the Bermuda Supreme Court in May 2015, the Court of Appeal in May 2017 and the Privy Council in January 2019 on the basis that the Corporation acted ultra vires [see Note 13].
“MIF started additional legal proceedings against the Corporation in the Supreme Court of the State of New York on this matter [see Note 13]. The case was later transferred to the U.S. District Court for the Southern District of New York. On July 5, 2023, the US District court ruled in favor of MIF and against the Corporation. The court determined that MIF was entitled to recover $22,472,725 from the Corporation.
“The Corporation was required to record this potential liability in the financial statements as an expense for the year ended December 31, 2023. Legal advice was sought on whether this was enforceable in Bermuda given the Privy Council decision in January 2019. The Corporation appealed against the U.S. ruling. That judgment, if enforced, raised substantial uncertainty regarding the Corporation’s ability to continue as a going concern, given the absence of committed funding at that time.
“Following mediation in October 2024, the Corporation and MIF reached a full and final settlement of all disputes. Under the terms of the settlement, the Corporation agreed to make a one-time payment of $8.2 million in exchange for the retrieval of property deeds and the conclusion of all legal proceedings in both Bermuda and the United States.
“To fund the settlement, the Corporation obtained a loan of $8.75 million from Clarien Bank on February 25, 2025. The loan is repayable over a 10-year period through fixed monthly instalments secured against the Corporation’s revenues from car parking and ships wharfage. The Corporation has budgeted for these repayments in its long-term cash flow forecasts.”
