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Published On: Fri, Dec 11th, 2020

Auction Pasanggrahan hotel rescheduled for March 4, 2021 – UPDATED

PHILIPSBURG – The auction of the Pasanggrahan Royal Guest House on Front Street is not off the books yet. OBNA, the Development Bank of the Netherlands Antilles (Ontwikkelings Bank Nederlandse Antillen), announced in a press release that the auction, originally scheduled for December 10, has been postponed until March 4 of next year.

OBNA holds the mortgage rights on the property. At the request of the current owners, the Court in First Instance granted Pasanggrahan on Wednesday a temporary moratorium of payments (voorlopige surséance van betaling) and a cooling-off period of one month. The court also appointed an administrator at the hotel.

The court granted Pasanggrahan reprieve after the property reportedly secured a financial guarantee of up to $8 million from an American investment banker, Stockton Fuller and Company in Nashville, Tennessee. Manta.com describes this company as an investment counselor, established in 1996. It employs “a staff of approximately 1” and has a reported annual turnover of just $69,000.

Attorney Roderik van Hees, who handles communication about the dispute with Pasanggrahan for OBNA, stated via email in answer to a question from stmaartennews.com that “OBNA is not aware of any recently financing obtained by Pasanggrahan, let alone by this company.”

“The goal of the temporary moratorium of payments and the cooling-off period is to allow the court-appointed administrator to find a solution for Pasanggrahan’s financial problems,” the press release states.

The hotel was severely damaged during Hurricane Irma and it is further feeling the impact of the COVI-19 pandemic. Booking.com advertises the hotel’s room price as $289 per night. The reference to Pasanggrahan’s financial problems most likely indicates that the hotel is no longer capable to repay its mortgage.

In such situations, the bank is entitled to call in the debt. A similar situation occurred several years ago with the former Caravanserai Beach Resort. After the resort defaulted on its mortgage payments Scotiabank called in its debt in 2013 and auctioned the resort in 2014. For $14 million it became the property of Alegria.

The cooling-off period for Pasanggrahan can be extended once by a month. “During the cooling-off period holders of security rights such as a mortgage and a right of pledge cannot exercise their right to enforce their claim against the assets of the company,” OBNA explains in its press statement.

Considering these circumstances, the development bank has decided to reschedule the auction for March 4, 2021.

The bank points out that it has “the right and the obligation” to safeguard its economic and financial interests. “Any purchaser of the right of long lease will have to comply with the stipulations and conditions of the deed of long lease and any other rules and regulations, including those that apply to monuments, if applicable.” The bank notes that these rules have been determined by country St. Maarten.

“OBNA does not violate any of the conditions in the deed of long lease, nor does it violate any other applicable rules and regulations by doing so.”

The bank has put communication about the dispute with Pasanggrahan in the hands of Roderik van Hees, an attorney at the office of VanEps Kunneman VanDoorne.

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PRESS RELEASE OBNA (DEVELOPMENT BANK OF THE NETHERLANDS ANTILLES) REGARDING PASANGGRAHAN ROYAL GUEST HOUSE

This morning at 10 o’clock, the auction of the property located at Frontstreet which is known as the Pasanggrahan Royal Guest House, was planned to take place. This auction is the result of the exercise of the mortgage right of the Development Bank of the Netherlands Antilles (OBNA) on said premises. By judgment of the court yesterday afternoon, at the request of the current owners, a temporary moratorium of payments (‘voorlopige surseance van betaling’) was granted and a cooling-off period (‘afkoelingsperiode’) of one month was allowed, with the appointment of an administrator at Pasanggrahan. The goal of the temporary moratorium of payments and the cooling-off period is to allow the court-appointed administrator to find a solution for Pasanggrahan’s financial problems. The cooling-off period can be extended with one additional month only. During the cooling-off period, holders of security rights such as a mortgage and a right of pledge cannot exercise their right to enforce their claim against the assets of the company involved. Therefore, and taking into account the possibility that the cooling-off period will be extended with one month, OBNA has rescheduled the planned auction to 4 March 2021.

OBNA has the right and the obligation to safeguard its economic and financial interests. OBNA points out that any purchaser of the right of long lease will have to comply with the stipulations and conditions of the deed of long lease, which have been determined by the Country of Sint Maarten, and any other applicable rules and regulations (including those that apply to monuments, if applicable). By publicly auctioning the right of long lease, OBNA does not violate any of the conditions in the deed of long lease as determined by the Country of Sint Maarten, nor does it violate any other applicable rules and regulations by doing so.

All communication going forward will be channeled through our lawyer, Roderik van Hees of VanEps Kunneman VanDoorne.




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