PELICAN--The principals of Pelican Capital Investment Program (PCIP) and Investors Association have placed a lien on the property of the Simpson Bay Resort Owner Company, formerly Pelican Resort.
Owners who invested thousands into the programme had been seeking ways throughout 2010 to recoup invested monies, even before news surfaced that Pelican was on the verge of bankruptcy and foreclosure.
Attorney representing the investors association Monique Hofman confirmed that the attachment had been placed on the resort property and explained that the investors had not received repayment of their investment after their investments had matured. Hofman said the accumulated interest on the investment had not been paid either.
The 200 Pelican timeshare owners who invested in PCIP represented the largest group of unsecured creditors who, according to a statement by resort management late last year, were at risk of losing more than US $3 million if a solution was not found to tackle the establishment's default mortgage and annual operating loans.
The board of Tenant Association Pelican Resort Club (TAPRC) had warned timeshare owners that Richard Corso of Pelican's management company was misdirecting responsibility for the PCIP programme to TAPRC.
"Let us be clear, this programme is not being run by the TAPRC Board of Directors. It was approved by and implemented by a previous TAPRC Board chaired by Robert Shaw, and was specifically introduced to that Board by Richard Sutton [new owner of Simpson Bay Resort-Ed.]," the TAPRC board said.
"It was based on a Royal Resort Cancun investment concept and Mr. Sutton even took credit for this in a newsletter entitled "What Everyone Wanted to Know About Pelican, But No One Would Tell You!" by Richard Sutton. He handed this out at the 2004 AGM when he was on the TAPRC Board. His statement at that time was "The PCIP programme was started to raise funds for improvements at the resort. This was a membership investment programme. It was tested from January to February 1998. Based upon its strong acceptance, the programme officially began in May 1998. This programme was based upon a Royal Resort investment concept utilised in 1982."
TAPRC said it had directed Corso and Controller Ricardo Iman, during an April 2010 meeting, to pay every PCIP note as it came due, with no exceptions, and it had been Corso who had unilaterally decided not to do as TAPRC had directed. "The Board has never once wavered on this decision."
The board froze the PCIP programme early in 2010 because of a foreclosure threat made by Sutton to the board, it said, and because it was uncovered that Corso had never actually set up or directed the funding of a specific accounting reserve to pay back those PCIP investors who had indicated their wishes not to roll over their PCIP investments.
TAPRC said it had never expected Corso to refuse to comply with the directive to pay PCIP notes and that Corso had chosen to discontinue making these payments without board authorisation, even though he knew this action would hurt a number of PCIP investors who were retirees.
"We want you to know that Corso never missed paying himself his monthly interest on his secure US $500,000 investment, yet he had no problem directing Judy Besta [Royal Resorts Caribbean employee-Ed.] not to pay PCIP investors," TAPRC said.
"We've heard from several investors that Corso talked them into reinvesting in this programme by telling them their PCIP investment was safe as long as Royal was the Resort's management company. He added that he and his wife had personally invested US $500,000 in Pelican, implying that he was also a PCIP investor. Corso was disingenuous in that he did not share with them that his personal investment money was protected by a lien on the entire property."
According to TAPRC, Corso agreed in the beginning of January that PCIP repayments that had matured since September had not been paid [and that the Board had directed that said PCIP payment maturities were to be paid-Ed.]. He was asked to provide a plan for how repayments for the remaining owner funds would be made through 2012. Such a plan has reportedly never been submitted.
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