Simpson Bay Resort Update March 4, 2011

Simpson Bay Resort & Marina

March 4, 2011

Dear Timeshare Members,

Great efforts have been made to serve the interests of the resort’s timeshare members, employees, and the residents of St. Maarten.  It is in the interest of all the parties that cooperative efforts continue so that the resort can open as quickly as possible and Annual Maintenance Fees (AMF) can remain as low as possible.

There are three main challenges affecting the opening of the resort and an efficient future operation.  They include: i) labor, ii) movable assets, and iii) lawsuits.

ISSUE #1 – LABOR

Active negotiations for an efficient and fairly paid union work force have been ongoing since December 17, 2010.  More than 100 hours of meetings and the intervention of three separate groups of government mediators have been unable to get any commitment from the union.  This is especially disappointing and frustrating in light of reaching verbal and written agreements with the union President on three separate occasions.

The fact of the matter is that in 1996 the Board of the Tenants Association of Pelican Resort Club (TAPRC) chose to continue employment with the previous workers of Billy Folly Development under the continuation of the existing Collective Labor Agreement (CLA) and recognizing approximately 15 years of accrued benefits and seniority compounded by inadequately low contractual productivity levels.

An overview of the various proposals is below:

Proposal #1 Employ all 182 union members of PRCMC labor pool
Six (6) month Labor Contract to review needs
Same wages as with PRCMC & same positions
Benefits package as prescribed by law
No trial period (which is allowed by law)
Proposal #2 Employ all 182 union members of PRCMC labor pool
Twelve (12) month Labor Contract to review needs
Same wages as with PRCMC & same positions
Benefits package as prescribed by law
No trial period (which is allowed by law)
Proposal #3 Employ all 182 union members of PRCMC labor pool
Permanent Labor Contract
Same wages as with PRCMC & same positions
Benefits package as prescribed by law
Sixty (60) day trial period (which is allowed by law)
Written guarantee to keep at least 132 people (72%)
Proposal #4 Employ a minimum 145 union members of PRCMC
labor pool (minimum 80%)
Permanent Labor Contracts for all 145+ workers
Same wages as with PRCMC & same positions
Benefits package as prescribed by law
No trial period (which is allowed by law)

 

All of these proposals included even more benefits for workers such as an agreement to immediately enter into a new sustainable CLA, interest free advances to any worker not employed who may be awaiting termination payments, etc.  Although several proposals were agreed to – including the January 19, 2011 execution of an Agreement of proposal #4 above – the union subsequently rejected all options put forth by owner representatives and government mediators.

A fifth – and even more generous – written proposal was agreed to on Saturday February 26, 2011 through the government mediator.  After reaching yet another verbal agreement the union subsequently reneged and demanded three more costly conditions. Proposal number five is not outlined here because even though the mediator’s deadline has passed, the new owner is still willing to honor the commitment made by the parties – which includes keeping the content of the negotiations confidential pending the final outcome.

The union’s position is that Simpson Bay Resort Management Company B.V. (SBRMC) must employ every worker previously employed by Pelican Resort Management Company (PRCMC) under identical terms and conditions and recognizing all seniority and benefits of a 30-year old CLA.  On February 8, 2011 the union did win an Injunction Case supporting part of their position; however, the ruling will likely be overturned in appeal or with the Supreme Court due to judicial merits. The union is presently demanding even more than the February 8, 2011 verdict. Unfortunately, the appeal case may take a full year to complete.  The owner has requested the union to agree to a “speedy appeal” process in the St. Maarten courts. Regretfully, the union thus far has only been willing to agree to a “speedy appeal” if the new owner meets new and higher demands – some of which go far beyond the February 8, 2011 verdict.

ISSUE #2 – MOVABLE ASSETS

The auction of December 16, 2010 and subsequent sale on January 26, 2011 did not include certain movable assets.  Primarily these are the items inside the units such as beds, TVs, curtains, dishes, etc. that are critical for your enjoyment of the resort.

Through February 17 & 24, 2011 newsletters and lawyer notices, the Board of TAPRC has recently advised that these assets are worth US$5 million, that they have been transferred into a Trust to protect them from creditors, and that these same moveable assets may be rented for US$100,000- per month.

On February 28, 2011, the resort proposed to trade the movable assets for the millions of dollars of 2011 Annual Maintenance Fees (AMF) paid by timeshare members for their 2011 occupancy but collected and spent by TAPRC in 2010.  This simple solution protects all timeshare members of intervals 8-52 from paying a second 2011 AMF if TAPRC already spent the money they paid.  Furthermore, it finalizes another important issue for getting the resort open as quickly as possible and with the least cost to timeshare members.

On March 3, 2011, TAPRC Chairman Jeff Borowick responded to this proposal with a request for additional information.  Mr. Borowick expressed a willingness to meet on this issue once the documents are received.

ISSUE #3 – LAWSUITS

After an estimated US$1 million in legal fees, the TAPRC’S team of USA and Dutch attorneys has been unsuccessful in every verdict.   These legal fees have been paid from an unbudgeted US$295,000- of 2010 AMF and the unilateral Special Assessment of US$100- per interval some members paid.

TAPRC has been suing every company and person imaginable – through TAPRC, through Pelican Resort Club Owner Company N.V. (PRCOC), through Pelican Resort Club Management Company N.V. (PRCMC), and now through the new foundation.  TAPRC has initiated numerous legal battles against the following companies and entities without success.

  • RR Management Company Ltd.
  • RR Marketing Company Ltd.
  • Alpha Marketing & Management B.V.
  • Quantum Investment Trust Ltd.
  • Richard Sutton
  • Richard Corso

 

It is noteworthy that thus far no company or individual has initiated any legal suits against TAPRC, PRCOC, PRCMC, or any individual Board Member.  Despite being owed millions of dollars and being the victims of slanderous acts, legal proceedings have not been initiated because legal battles are not the optimum method to serve the interests of the timeshare members, the employees, or the people of St. Maarten. Lawsuits serve the lawyers.

Suits may be brought against perpetrators of TAPRC’s agenda for a variety of charges including slander, defamation of character, fraud, attempted embezzlement, tortuous interference, misfeasance, and malfeasance.  Several high profile Pelican Capital Improvement Program (PCIP) advocates can be charged with assault and one with battery.  Simpson Bay Resort can sue TAPRC for the return of millions of dollars of 2011 AMF.

The legal battles can drag on for years to come – possibly with the resort remaining closed – if proper and cooperative actions are not taken now.

In addition to appealing cases already lost, this week TAPRC has started more legal posturing and lawsuits that may have very adverse impacts on opening the resort.  Appeals can take years to complete, cost millions of dollars, and although the lawyers will be happy, the timeshare members are guaranteed losers.

TIMESHARE MEMBERS HAVE POWER

Every timeshare owner can make a difference in possibly getting the resort open faster and helping to keep AMF as low as possible.  Contact the TAPRC Board at pelicanboard@gmail.com and advise them to serve the members by:

  • Trading the movable assets for debts so no member has to double pay 2011 AMF and,
  • Withdrawing all the lawsuits in exchange for guarantees that counter claims will not be filed.

In the absence of a settlement a Special General Meeting is likely to be called but this may take months and the resort will likely continue to be closed. Together we can resolve these issues and expedite the return to enjoying your vacation home.

Sincerely,

SIMPSON BAY RESORT MANAGEMENT COMPANY

Rodrigo Gamboa

Corporate Coordinator

RR Management Company

authorized management agent for Simpson Bay Resort Management Company

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