Wyndham hotel receivership intact
Published:Wednesday | February 19, 2014 | 12:00 AM
Avia Collinder, Business Reporter
RBC Jamaica has declined to clarify the status of the Wyndham, saying its takeover of the assets is still being fought in court and that it does not comment on client-related issues.
The bank took over the hotel on claims that property owner Ocean Chimo Limited had failed to keep up with its loan payments, which Ocean Chimo and principal shareholder Delroy Howell is contesting in court.
RBC Jamaica, in response to queries relating to the fate of the hotel in the face of the bank's acquisition by Sagicor Group Jamaica, said that the issue remained with the courts.
"As the matter is currently before the court, we reserve the right to not comment at this time," the bank said.
The bank also declined to comment on the current size of the debt associated with the property, but court documents indicate that the Jamaican bank and sister operation in Trinidad are seeking to recover more than US$33 million.
Sagicor earlier this month said Royal Bank sold the non-performing loans of RBC Jamaica ahead of the deal in which it paid $9.5 billion for the 13-branch operation. The acquisition awaits final approval by regulators.
The size of RBC Jamaica's bad-debt portfolio at sale was not disclosed, nor the buyer. However, the bank's non-performing loan portfolio amounted to just under $7 billion at year end October 2013.
The former Wyndham hotel was placed in receivership in August 2011, and, at one time, was placed on the market for sale by receiver Kenneth Lewis.
Lewis was not reached for comment, but an assistant at Mair Russell Grant Thornton Limited - where Lewis is a senior partner - said the receivership remained intact.
Efforts to reach Howell were also unsuccessful.
Unresolved issues
The 303-room hotel, which sits in the prime business district of New Kingston, was acquired by Ocean Chimo in 2008. Howell first operated the hotel under the Hilton brand, but later switched management companies to Wyndham.
The property has been closed since a fire last year, after which plans for its auction were cancelled.
Regarding the fate of the 200 employees at the hotel, Wednesday Business was advised that a recent meeting between their representative, the Bustamante Industrial Trade Union, and RBC Jamaica, which was mediated by the Ministry of Labour, failed to resolve the issue of redundancy payments. Neg-otiations are said to be ongoing.
Court documents filed in August 2011 show that Ocean Chimo borrowed more than US$30 million between 2005 and 2008 from RBTT Bank Jamaica Limited and RBTT Bank Limited - both later rebranded RBC under Canadian ownership.
RBC holds mortgages over the hotel property as well as a debenture over its fixed assets.
Current case listings of the Supreme Court show that three cases involving the litigants were all due to be heard by Justice C. Edwards on February 6.
The listed cases were Delroy Howell v Royal Bank of Canada, Ocean Chimo Limited v RBTT Bank of Jamaica, and RBC v Delroy Howell.