Timeshare owners request US $50,000 and US $1,000 penalties

POSTED: 03/2/11 1:56 PM

Labor talks still ongoing

St. Maarten – Gerrit Van Giffen officially filed a petition requesting summary proceedings on Tuesday in hopes that the court will get the new owners of the former Pelican Resort Club and Marina to fulfill its contractual obligation to the time share owners. The court must now set a date for the hearing.

The petition names nine plaintiffs, seven of which are individual timeshare owners. The other two are the Advocacy Foundation Pelican Resort Club, which has been empowered to take the action, and the Tenants Association Pelican Resort Club. The named defendants are Simpson Bay Resort Owner Company B.V., Simpson Bay Resort Management Company B.V. and R.R. Management Company Ltd.

Van Giffen states in his petition that the filing is about a dispute over compliance with timeshare contracts that give his clients the right to timeshare units provided by the resort’s owners and management. That dispute arose because SBROC closed the resort on February 20 after acquiring the resort in the December auction. That acquisition obligates them to honor the timeshare rights but Van Giffen said they reneged in order to force the government to give them tax breaks and force the union representing the employees to waive its member’s rights as established in the labor laws.

Van Giffen asserts that SBROC “takes the incorrect view” when it states that operating the resort at the moment will harm the resort. He also estimates that SBROC has collected over 11 million dollars in maintenance fees and other contributions from the time share owners, giving them sufficient capital to run the resort.

“Closure of the resort is not justified. Through this procedure the plaintiffs seek to have their timeshare rights honored,” Van Giffen states in his petition.

The attorney requests the court order the defendants to seperately and jointly take actions to “fully and promptly” open the resort and allow the timeshare owners to access to their units two days after the court has ruled. If the defendants do not comply then the timeshare owners want the court to levy a 50, 000 dollar penalty for every day or part of a day that the resort remains closed.

Van Giffen also requests the court order SBROC to compensate each time share owner who was not able to use their unit by returning the maintenance fee they paid within two days of the ruling. If this is not done the attorney requests the court levies a 1, 000 dollar penalty per day or for part of the day that SBROC does not comply.

There’s also a request for the defendants to pay for the costs of the proceedings.

Future suit /New Foundation
Van Giffen also confirmed on Monday that the resort’s movable assets had been transferred to the Advocacy Foundation, which was set up to sue anyone who would seek to harm the timeshare owners’ position and allow them to recoup money from Royal Resorts to pay creditors. The Advocacy foundation was set up and registered at the Chamber of Commerce on January 12, 2011. The board members are Charles Robert Ryan of New Jersey, Jeffrey Mark Borowick of New York and Roy Martina of Ontario, Canada.

“I advised my clients to set up this foundation because there are regular board elections and some of the time share owners are friendly with Mr. Corso and Mr. Sutton and we wanted to ensure that they would not become board members and decide to call off the litigation. These members want to ensure that the litigation goes forward so that we can pay the creditors and we can’t do that because the money is being sent to Belize,” Van Giffen said.

The recouping of funds will be done in a separate proceedings where the Tenants Association Pelican Resort Club (TAPRC) will claim damages for Royal Resorts funneling money into “unauthorized accounts” in Belize. Documentation provided by the attorney shows two accounts in the United States where timeshare owners deposit their annual maintenance fee, two here in St. Maarten for the operational funding of the resort, and two in Belize.

Bloem asserts that Article 3 of the Management Agreement between Royal Resorts and Pelican Resort Club, The Management Company and Pelican Resort Club, the Owner Company allows for Royal Resorts to open Bank Accounts.

“There is no proof that there is any money missing and I don’t understand why they (ed. The timeshare owners) don’t tell you that they got weekly accounts that they got audited financial reports from Ernst & Young for 13 years,” Bloem said.

The specific stipulation states, “All bank accounts shall be opened at financial institutions agreed upon by both Royal and the Membership Company. The main criteria shall be service and accommodation, convenience and obtaining competitive interest rates on investment of idle funds and bank service charges. All bank accounts shall have signatories agreed upon by the parties.”

The provisions speak of the Funding Accounts – the two currently open in the United States – and the Operating Accounts – opened here in St. Maarten. No other account type is mentioned or allowed.

The management agreement states, “It shall be a breach of this agreement for any accounts beyond those contemplated above in connection with the Resort.”

Ongoing negotiations
The reopening of the resort is locked down in an ongoing “exchange or positions” between SBROC and Workers Institute for Organised Labor (Wifol). The resort claims they cannot operate with the labor costs that they face under the current Collective Labor Agreement for the Supervisors and Line Personnel. A court ruling says the company is bound to honor the arrangement. That eventually led to the closure Van Giffen mentions in his petition. Head of the Labor Department Rafael Boasman and the prime minister’s legal advisor Hensley Plantijn have been working with the parties to come to a compromise that will re-open the resort and send the employees back to work, while the court verdict is appealed. They circulated a final draft on the weekend. Wifol submitted amendments on Monday and are now waiting for a reply.

“We made an excellent offer that they cannot refuse. If the other side say what we’ve requested is unreasonable, we will advise our client to join in the proceedings that the timeshare owners have initiated. We want this agreement to include that the resort will not close again based on the outcome of the appeal and we also want a more permanent solution for the employees than just what will happen during the appeal. Right now there are only two possibilities. Either both parties will accept the agreement or Boasman will accept and Bloem will not accept,” Wifol attorney Wim van Sambeek said.


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