SSL founder, relatives in legal face-off over sale of property
BUSINESSMAN HUGH Croskery’s bid to settle a debt with a ‘$225 million’ St Ann villa is now the subject of a legal fight involving relatives who claim they should have been consulted first. The Supreme Court is to rule on July 7 whether the transfer...
BUSINESSMAN HUGH Croskery’s bid to settle a debt with a ‘$225 million’ St Ann villa is now the subject of a legal fight involving relatives who claim they should have been consulted first.
The Supreme Court is to rule on July 7 whether the transfer to George Chai, a retired bakery owner who is owed the debt, will have to wait until the trial of the claim brought by family-owned Coral Cove Management Limited (CCML) in February.
An interim injunction was granted on March 21 and extended on May 9 until the July hearing.
CCML is claiming that Croskery breached an agreement giving it a right of first refusal (ROFR) if the property in Discovery Bay is to be sold or transferred.
An ROFR is typically found in contracts that give the holder the right to enter into a business transaction with a person or company before anyone else can.
In response, Croskery has placed a recent valuation of the property before the court and will, seemingly, abide by the ruling of the court in the matter. He wants the property sold at the current market value.
Chai’s attorney, David Wong-Ken, has declined to comment. But in January, he told The Gleaner that “George negotiated with Hugh Croskery to settle some private debts and obligations, including the settlement of a mortgage over one of the same houses that Croskery agreed to transfer to George in settlement of those debts.”
CCML is making its case through directors and siblings Heidi Clarke and Bruce Lopez.
Croskery is the first defendant, followed by his children Mark and Sarah.
CCML owns a property neighbouring the one that Croskery is seeking to transfer. Both properties have separate titles but are not separated by boundaries, Lopez said in an affidavit filed on May 5.
He said they share a small cove “which would be impractical to separate” and that because of the layout, “shared use of the land and amenities allows for better enjoyment of either property”.
Lopez said he and his siblings inherited the properties through shares in CCML held by their parents, who are now deceased.
“My family and the Croskery family are blood relatives and have been close family friends prior to my birth. The subdivision and existing layout of the two properties happened only because of this connection, and the properties are an important part of our family history,” Lopez shared.
“The ashes of our parents were sprinkled in the cove,” he added.
IMPORTANT FAMILY HISTORY
According to him, the “intimate nature of the properties and the important family history underpin the reason the ROFR is of fundamental importance to the claimant”.
Lopez, an architect, said he had a meeting at Croskery’s Norbrook, St Andrew, home on October 19, 2022. But before that, he emailed Croskery about “rumours at the time that Stocks and Securities Limited (SSL), of which Hugh is the main principal, was in financial trouble and that the property may be at risk of sale”.
Croskery is the founder of and major shareholder in SSL, the investment firm hit by a $3 billion fraud that emerged in January.
“Most of the time was spent with Hugh explaining how he ended up in a dire financial predicament. He spoke of having been convinced to provide the property and his Norbrook home as security to cover his indebtedness to a creditor, who he did not identify, and that steps had already been taken to enforce this security,” Lopez said.
Lopez claimed CCML was not mentioned and that Croskery “did not offer (verbal or otherwise) to sell the property at US$3 million, nor was the figure of US$3 million mentioned”.
He alleged that at the end of the meeting, Croskery stated that if “we” could raise “US$5 million (US$4 million of which would be paid to his unnamed creditor and the remaining US$1 million retained by him) we may be able to keep the property”.
“This statement was not presented as a formal or direct offer, or with any reference to the ROFR, and there was no mention or suggestion of any timeline or deadline,” Lopez said, adding that he did not believe there was a genuine sale offer and has not spoken with Croskery since the meeting.
Lopez also contends that the property is “not valued anywhere close to US$5 million” and that he interpreted the figure “as intimating that my family had no choice but to accept the status quo”.
Citing Croskery’s reference to a property being sold for J$100, Lopez referenced a transfer tax certificate that the property’s market value was “independently determined by Tax Administration of Jamaica to be J$225 million in November 2022”.
Meanwhile, CCML has received support from Sarah, who has declared: “I agree that the claimant is entitled to the right of first refusal.”
Sarah explained in her affidavit that she has no beneficial interest in the property and pointed to a July 2022 court ruling which said: “Mark and I hold the property on trust for Hugh.”
The two children are named on the title registered in 2000.
She said a meeting was held at SSL’s St Andrew offices in July 2022 and attended by her father, Mark Chin, Christina Chin, Chai, and his attorney, to discuss “monies owed to Chai by SSL and Hugh personally”.
Chai is a shareholder of SSL.
Mention of the ROFR “was met with disregard and rejection” by the Chai team after their demands for the Discovery Bay property and Croskery’s Norbrook home to settle the debt, she said.
Sarah also said Chai rejected her offer to settle her father’s US$1 million personal debt.
A settlement was inked on August 22, 2022, and involved two SSL companies, Croskery and Chai, and, among the things agreed was for the Discovery Bay property to be transferred to Chai.
“As my name was still on the title to the property as his nominee, Hugh requested that I sign the agreement, which I did. Mark did not sign,” she said.
“I am extremely embarrassed and upset at the situation in which the claimant, and by extension the Lopez family who are relatives and dear family friends, find themselves in seeking to enforce the ROFR.”
Croskery is represented by attorney Courtney M. Williams, who is instructed by Judith Cooper-Bachelor of Chambers Bunny & Steer.
CCML is represented by Myers, Fletcher & Gordon.