Bacolet Bay News Update 28 November 2018

I and another angry purchaser exchanged a large number of emails with the FRC yesterday and learned a number of new things, mainly things that should have been communicated to purchasers as a matter of course as they affect our investment in the project. Here is what we now know:

Where Has the Money Gone?

The money raised by sales over a decade ago has apparently been spent on land, the initial construction work and, somewhat scandalously, on repaying the original founders of the project who are no longer involved but have walked away with their money.

New Investment is NOT Going to BDF

According to David Arnold, the management company BDF (Bacolet Development Finance) is  in “a distressed state”, so a Newco called BB Investor Co Ltd has been created to handle new investor funds.

The FRC Are Not Looking After Purchasers

Contrary to what we had been led to believe over the last couple of years, the FRC is not looking after the interests of purchasers – just investors. “I think that you are purchasers, and not investors. That is a very important distinction because the FRC is appointed by the investors, and we do not represent the purchasers.” – David Arnold. So basically if you’re a purchaser, you’re on your own.

The Land is Not Owned by BDF

Thought the management company owned the land on which the resort will be built? The only asset the project currently has? Think again. It’s actually owned by a vehicle called Ivymount, which is listed in the ICIJ Offshore Leaks database as being based in the British Virgin Islands. Ivymount is in turn managed by a Channel Islands company called Nerine Fiducaries. Nerine and various permutations thereof – most likely connected companies – appear frequently in offshore leaks including the Panama Papers and Bahamas Leaks. See the ICIJ search results.

Optimism is Not High

Whilst Fleury and Gunn have been talking up their optimism about the project, the fact remains that construction has not started and the project has run out of money. David Arnold says: “All in all, just like many construction projects, a lot of money has been spent on groundwork without much to show for it. And then the money ran out as the global financial crisis struck. The consequence is that the company has no money leaving all its contracts in great distress, not helped by a lack of communication and the fact that management then offered financial compensation to some which could never be met. This project needs investors and purchasers to act collectively; it will only take one investor or purchaser acting out of turn to cause it to fail and that would be catastrophic for all. It is in a very perilous state.”

QUESTIONS

The above raises several questions for the BDF and the FRC that we are yet to receive an answer to, notably:

Why was I (and presumably other purchasers) issued a contract for a full refund last year, and assured 3 months ago that this would still happen, when it was known all along that the company would be unable/unwilling to honour it?

Who are the original founders of the project who were able to walk away with their money?

Why were purchasers not informed about the creation of a Newco, and that the investment money that has been talked up in the last couple of years would go to this Newco and not the entity our contracts are with, BDF?

Which individuals are in charge of the Newco?

If the FRC is independent of BDF and trying to put pressure on them to secure a successful outcome, why is Christopher Williams on both the FRC and the board of GCR with Michael Gunn and Kash Lais?

Can BDF or the FRC explain the number of offshore entities related to this project?

Why is nothing being communicated to purchasers? Why has it taken the hard work of individual purchasers to obtain and publish this information?

Why are purchasers threatening legal action to obtain what is contractually theirs by right being accused by the FRC of “acting out of turn“?

 

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    1. […] given the history of the project I was sceptical that this would actually happen and an email exchange with David & Joachim from the FRC last month confirmed my fears, with Joachim saying there would be no payments for a long […]

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