Ritz-Carlton has new owner
Posted on Wed, 10/31/2012 - 12:50 in Local Business
(CNS Business): RC Cayman Holdings LLC secured ownership of the Ritz Carlton-Grand Cayman Resort this morning after the highest value real estate auction in the history of the Cayman Islands. RC Cayman, the successful bidder in today's local public auction met the reserve price of US$177.5 million for the property, which was reduced from an earlier price of $250 million that equated to the sum of the outstanding loan and interest. The property was sold as a block, including the 136 acre resort with the nine-hole Blue Tip Golf Course and future development land. In a release this afternoon the new owners said they were committed to maintaining and enhancing the status of the Resort as a world‐class destination. Meanwhile, the former owner Michael Ryan and RC Cayman are in Grand Court at the start of what is expected to be a protracted legal battle.
Follwing the successful bid this morning, Rick Finlay of Conyers Dill & Pearman, RC Cayman Holdings' Cayman representative explained, "With this sale, only the underlying ownership of the property changes; the resort will continue to be operated as before, and by the same management structure." He described this as a "very satisfactory outcome, given the long-standing uncertainty surrounding the Ritz Carlton Grand Cayman Resort."
The loan that Ryan took out to partly finance the development of the Ritz Carlton has been sold to various firms and most recently ended up in the hands of RC Cayman, which moved to seize ownership of the resort earlier this year after Ryan’s companies defaulted. The firm has since accused Ryan of syphoning money from the various companies and mismanaging them. Ryan has denied any wrongdoing and has counter sued.
The complex courtroom drama of suits and counter suits, in which Ryan and his remaining web of companies are pitted against RC Cayman, opened on Monday and is expected to continue through next week. The dozen lawyers now embroiled in the legal battle before Justice Peter Cresswell are arguing over who owes what to whom regarding the web of firms that Ryan set up to first develop the Ritz Carlton hotel and later own and manage the resort via the Ritz brand.
Against that backdrop, the bidding on the Ritz Carlton was held this morning (Wednesday) at the auction, which was managed by American based specialist Eastdil Secured Ltd.
RC Cayman Holdings LLC is an affiliate of Five Mile Capital Partners LLC of Stamford, Connecticut. Five Mile is an experienced private equity investor in the hotel and resort property sector.
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Doesn't matter. The property
Doesn't matter. The property is gone, the buyer doesn't owe the old duty claim and the duty claim is not a charge on the hotel property. . Are there other assets? Doesn't appear so. More to the point, the government has never before taken money that could go to local creditors so kiss the duty claim goodbye.
Thank you for being so
Thank you for being so concise on this as that was my understanding also. No doubt if you are wrong an anonymous lawyer will correct you.
Who is the Caymanian link to
Who is the Caymanian link to RC "Cayman" Holding?
Five diamond property
To: "The Ritz-Carlton is NOT a
Submitted by Anonymous on Wed, 10/31/2012 - 13:29"
So much anger my friend and your point has been understood. So you are correct about the property not being a five-star rating and thank you for the half fast educational bit. But what you do forget to highlight is that the property is a five diamond holder by AAA standards. There has always been a lot of confusion about this If you ask me, five-star/five diamond it's all the same right, but no it's not.. The hotel also received its 5 Diamond rating in the very first year that it's been open! Also something else to note about this rating is that the Ritz-Carlton Grand Cayman is pretty high up in the world of The Ritz-Carlton company all over. It is a hotel that holds a record for being number one in the company of over 70+ hotels around the world for the first two consecutive years that it's been open. That's pretty amazing and as I know to this day has not been broken by any other Ritz-Carlton property. Feel free to do some research on that and correct me if you wish.
On a side note putting all of this legal stuff aside it's going to be a lot of he said she said, who owes me money and who owes them money. Also if I'm not mistaken Mr. Ryan was in a bit of a situation in his previous country of residence which I believe was Costa Rica. Can anybody here educate us on the legal end of things there? Sorry it's just not my area of expertise. More I believe he kind of left people high and dry when it comes to properties and promises. With such a recent background of Mr. Ryan did the government do a little research before they handed a lot and I mean a lot of money over to Mr. Ryan? But then maybe that's because there were bonuses for the government as well. XXXX
All in all beyond all this legal crap this hotel is a fantastic property it has done a lot for the tourism industry in the Cayman Islands and it will continue to be a fantastic property amidst all this extra attention. I am proud to say that I moved my life to the Cayman Islands and opened up that property years ago. Now if the right situation came upon itself I wouldn't think twice about returning to work for it again. It's the hotel that brings me to the island, not the island.
...now insert criticism where ever. Enjoy the day!
Bravo!
Bravo...well said and i agree that the Ritz is a stellar property and eveyone who works there should hold their head high. The RItz has made all the competing properties enhance their product and that benefits all of us. I don't work for Ritz and haven't drank the kool-aid but i understand its value to our tourism product.
well government just made CI
well government just made CI$11,000,000.00 in stamp duty, if they actually collect it and don't give a waiver. Let's just wait and see shall we...
Stamp duty.
At 7.5% stamp duty, looks like a good pay day for government.
Do we have any guarantee the
Do we have any guarantee the duty on the sale will not be waived or delayed? Nothing would surprise me whatsoever.
No waiver, no delay, Chris.
No waiver, no delay, Chris. Guaranteed.
Not
Not if it's pursuant to a court order.
So if the price matched the
So if the price matched the debt, there goes the $6m claim. It is fairly clear that the asset is worth even less than this but the fund just bought it at book rather than realise the loss with the hope of future sale if the market improves. This outcome means the market view of the Cayman economy is far far worse than anyone imagined. Well done Minister of Finance.
The Ritz-Carlton is NOT a
The Ritz-Carlton is NOT a Five star property!! Five star rating were done by Mobil, but now done by Forbes, if you look on their website it is not listed as a five star property. The hotel was designed to be a Five star Hotel but doesn't hold that rating in the "true" sense of the term. Five star was done by Mobil, and five diamond done by AAA. Please stop referring to it as a Five star hotel, it is not.
More important, than
More important, than wrangling over the rating, I would like to know if the CIG is taking steps to recover the 6 Million owed to US!!!!!
Mr. AG, what is your office doing? or you haven't been told to act upon this?!!
OKay lets keep this simple.
OKay lets keep this simple.
A company owned the property.
It owed huge amounts of money all over the place, including to the CIG.
The banks were the only ones who took security over the company's only real asset - the hotel.
because of doubts over the Company the original lenders thought they might not get their money back so they sold their loan (ultimately to RC Cayman) for less than the face value of the loan.
RC had precisely no incentive to allow the hotel to survive. By forcing it into insolvency they can then force the sale of the hotel. Surprise surprise it sold for the face value of the debt so in effect they mmoved from having the debt they now have the same interest as equity.
The clever part here though is that they have left all teh old company's creditors (including CIG behind with nothin g to chase for their money.
The beauty for RC is that they now own all the upside in the hotel.
Previously if the hotel was worth $200M they were entitled to the face value of their debt - $178M - and everything else went to credditors and then finally if anything was left to RC and the charity who backed him and who have lost everything let us not forget.
Now if the hotel is worth $200M RX gets the whole lot - BIG profit for them!!!!
The ONLY silver lining in the clound here is that RC now have a real incentive to drive the value of the hotel higher so we may expect them to do everythign they can to make sure it is an ongoing success and first class attraction for Cayman.
Capitalism my dear fellow islanfders..ugly but real. The only thing that is not certain is the future so lets concentrate non making the baest of that - what is done is done here and we are delusional if we think the $6M is going to be repaid now.
The debt was US$250m but it
The debt was US$250m but it sold for US$177.5m
You really do not understand
You really do not understand the concepts of secured and unsecured debtors and limited liability companies do you?
You really don't understand
You really don't understand the concept of preferential creditors, do you?
They would be the ones that
They would be the ones that come after the secured ones? Let's all guess what they will end up with? Nada, zip, niente.
Guess again.
Guess again.
Do expand, when would a
Do expand, when would a government duty claim be paid ahead of a secured debt when that creditor has exercised their security right?
Read the law.
Read the law.
Where does it provide that
Where does it provide that unsecured preferential creditors take ahead of secured creditors exercising security rights?
Depends on whether fixed or
Depends on whether fixed or floating charge.
Personally, I don't
Personally, I don't understand either! But the local law firms and the accounting firms are going to be licking their chops at the fees on this protracted dispute!
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