Buyer found for Morgan's Harbour Hotel - Deal awaits finalisation of court fight
A buyer has been found for Morgan's Harbour Hotel, capping a two-year search, according to the appointed receiver, Wilfred Baghaloo.
But Baghaloo also told the Financial Gleaner on Tuesday that the disposal of the property would have to await the outcome of an ongoing court case, on which a decision is pending this month.
The receiver, who is also managing director in charge of deals at PricewaterhouseCoopers Tax and Advisory Services Limited, says the judgement is not expected to derail the deal.
He declined to identify the prospective buyer ahead of the ruling, nor would he comment on the substantive issue to be decided by the court.
Morgan's Harbour is a 60-room hotel located near historic Port Royal. The property was originally owned by Morgan's Harbour Limited, whose principal and chairman is Neville Blythe.
Blythe bought the hotel in 2004 through Guardian Investment Limited and UGI Group Limited. In 2014, he originally leased the hotel to Lashmont Financial Services Limited, which renamed it the Grand Port Royal Marina & Spa. The lease was reported to have been secured with an option to purchase from Blythe.
The hotel has been the subject of a legal dispute between Blythe and Lashmont Financial, after the lessee secured Morgan's Harbour's debt via purchase of debentures held by Development Bank of Jamaica, DBJ.
Morgan's Harbour Limited has been fighting the takeover of the debt since then, and the case had a hearing on January 18 of this year.
Also, in January, Lashmont Financial placed an advertisement saying it had appointed a receiver for the hotel. However, Baghaloo said the notice was just an extension of his appointment. Lashmont first appointed Baghaloo and Caydion Campbell of PricewaterhouseCoopers as joint receiver-manager of Morgan's Harbour Limited in 2015.
The hotel was first placed on the market after the Supreme Court refused an application for an interim injunction by Morgan's Harbour Limited against Lashmont Financial on December 8, 2015, according to Baghaloo. Had Morgan's Harbour been successful, it would have seen a suspension of the receivership, he said.
Baghaloo told the Financial Gleaner that Lashmont had initially offered $212 million for the hotel, plus $263 million to settle debt owed by Morgan's Harbour Limited.
However, he said the DBJ as the principal creditor objected to the arrangement as it did not give priority to payment of the debt owed to it. Lashmont, alternatively, bought the debt owed by Blythe's company from the development bank.
In its application for the injunction, Morgan's Harbour Limited contended that the debenture under which the receivers were appointed was "irregularly acquired" by Lashmont from the DBJ, saying the lease agreement precluded Lashmont from buying the debenture from DBJ, Baghaloo said.
The application was denied by Justice Brian Sykes, who heard the application in chambers, the receiver said.
Lashmont is owned by the Myles McClymont and his family, who are said to be Jamaicans with companies in the United Kingdom.
A representative in the office of Debbie-Ann Gordon & Associates, the law firm representing Lashmont, promised court documents on the 2015 ruling, but these were not forthcoming up to press time.
The Financial Gleaner also reached out to law firm Peter MC & Associates, which represents Morgan's Harbour Limited, but the responsible attorney was said to be out of office.