Court ruling clears path for Morgan's Harbour Hotel sale
The receiver for Morgan's Harbour Hotel, Wilfred Baghaloo, says he can now move ahead with the sale of the property following a Supreme Court ruling in favour of the receivership, which a debenture holder had attempted to revoke.
Baghaloo, who is also managing director in charge of deals at PricewaterhouseCoopers Tax & Advisory Services Limited, again declined to disclose the identity of the main buyer until the deal closes, only stating that the interested company was a hotel operator from the Mediterranean.
Baghaloo, who in a previous story had declined to comment on the nature of the court case, now says he took debenture holder Lashmont Financial Services Limited and its Managing Director Myles McLymont to court when the company tried to displace him as receiver, following his appointment in September 2015.
"The presiding judge was Justice Carol Edwards. "Judgment was given on the afternoon of February 12. The judge ruled in favour of the receivers, citing misplaced interest by the defendants," the receiver said.
"The debenture holder sought to interrupt the sale of the assets by attempting to terminate the appointment of the receivers ... . I decided to ask the court for their guidance on the best way forward, given the rights of the debenture holder, the company's creditors, the board of directors and the shareholders. My primary concern was to ensure that all the rights of the various stakeholders were managed while recognising the debenture holder's overarching interest in the estate," he said.
The lawyer for Lashmont, Kemilee McLymont of Peter MC & Associates, declined to comment on the debenture holder's next move. Debbie-Ann Gordon & Associates, which represented the receivership, said the formal judgment won't be ready before next week.
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, 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 the purchase of debentures held by Development Bank of Jamaica, DBJ.
Baghaloo said the bid from the buyer-in-waiting would allow the debenture holder to fully recover its debt, while also providing"the best financial outcome" for the other creditors.
The value of the transaction was not disclosed.
"We have been trying to dispose of this property for almost a year and before us, many others tried to dispose of same for decades, without any luck. Having secured a suitable buyer, we were concerned that the requests of the debenture holders would more than likely frustrate the sale process, resulting in the preferred bidder walking away. This would be most detrimental to the company and its various stakeholders," the receiver said.