The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

An Abaco development’s receiver is alleging that operational revenues were not being deposited into its bank accounts, while lot sales to clear a previous debt may have been more than five times’ undervalued.

Paul Gomez, the Grant Thornton (Bahamas) partner, questioned why 30 lots at Orchid Bay, plus an additional 16 acres, were sold for just $1.2 million to clear a former Royal Bank of Canada (RBC) debenture when the combined value of five recent lot sales at the property was $1.472 million.

And he alleged that upon taking control at the Guana Cay-based real estate development, the Grant Thornton team uncovered evidence to suggest Orchid Bay’s operational revenues were not being deposited in bank accounts belonging to the company.

Mr Gomez alleged that the marina, restaurant, golf cart rental and other revenue streams were instead being deposited into accounts belonging to Albury Property Management, a company owned by James and Melonie Albury.

The Alburys, though, have countered that they have done nothing wrong and that every action taken was designed to secure their interests and those of other Orchid Bay employees and creditors.

James Albury, in previous filings, alleged that he understood 50 per cent of the shares in Orchid Bay’s parent company had been held in trust for him.

And, in a December 20th affidavit, his son, Christopher, said: “My parents’ focus for the past two to three years has been to keep Orchid Bay open and operating by whatever means they could.”

Mr Gomez’s own affidavit was among a batch of documents filed with the Supreme Court yesterday to help him successfully resist an application to overturn Orchid Bay’s receivership.

James Albury and Coastal Property Services, the company that took over the RBC debenture, had sought a Supreme Court Order to overturn Mr Gomez’s receivership via a summons issued on December 16, 2013.

They argued that he and Grant Thornton had “no right or authority to take possession or control” of Orchid Bay, and “their seizure and occupation of that property on December 12, 2013, constituted an illegal and ongoing trespass, and a wrongful interference”.

However, Jacy Whittaker, attorney for Mr Gomez and a partner in the Freeport-based ParrisWhittaker law firm, confirmed to Tribune Business yesterday the Supreme Court had rejected the application to overturn the receivership.

This newspaper understands that Mr Whittaker was able to successfully argue, before Justice Estelle Gray-Evans, that neither Mr Albury not Coastal were able to bring the application because, since they were not parties to the original action, they had no standing to do so.

Tribune Business also understands that Roy Sweeting, the Glinton, Sweeting and O’Brien partner who is acting for Mr Albury and Coastal, served notice of his intention to appeal the ruling. Mr Sweeting did not return this newspaper’s call seeking comment before press time.

Tribune Business previously exclusively revealed that Mr Gomez is the receiver/manager for the William B. Johnson Investment Company and William B. Johnson entities, which own 100 per cent of the outstanding and issued shares in Guana Cay Abaco Development Company. This is the entity that trades as the 203-acre Orchid Bay Marina and Resort.

US bank, Synovus, is the main lender/creditor of those companies’ principal, businessman William B. Johnson, a well-known American entrepreneur who was once the owner of the Ritz-Carlton hotel chain.

Mr Gomez is thus the receiver for Guana Cay Abaco Development Company’s share capital, and he has alleged that James Albury and Coastal sold $16 million worth of property for just over $1 million to clear the former Royal Bank of Canada (RBC) debenture.

Providing further details in his latest affidavit, Mr Gomez alleged that the combined value of four Orchid Bay lots - not covered by the former RBC debenture - and which were sold between 2007 and 2012, was $1.472 million.

“Coastal sold 30 interior lots and (16 acres on the beach for the sum of $1.2 million,” Mr Gomez alleged.

“The conveyances at [b] to [e] above total the sum of $1.472 million, yet Coastal contends that the best price possible for 30 similar lots in addition to 16 acres on the beach was only $1.2 million.”

Suggesting that there were “substantial disputes of fact” that needed to be investigated, Mr Gomez further alleged: “Coastal and James Albury appear to be quite intent to convince the court that the debenture is still in force.

“They have not provided us with proof of the actual amount that has been credited to the $1 million debenture from the recent sale of $1.2 million.”

Mr Gomez then claimed that at a meeting with staff following the Grant Thornton ‘take over’, his fellow director, Derek Sweeting, was told by staff members that they did not have formal employment letters.

And they were also unsure whether they were employed by Orchid Bay or Albury Property Management and Rentals, a business name registered to James Albury’s wife, Melonie.

“Mr Sweeting has informed me that to confirm these findings, he cross-referenced several of the deposits with the daily sales reports for the marina and restaurant, and found that they corresponded with the days and amounts of the deposits into Albury Property Management’s bank accounts,” Mr Gomez alleged.

“In particular, during the month of July 2013, over $200,000 in deposits went to the Albury Property Management accounts from what appears to be Guana Cay Abaco Development Company marina-related income.

“ln addition there are two credit card machines in the marina office. One is labelled ‘APM-Marina’ and the other is labelled ‘Rentaland Cars’.”

Mr Gomez alleged that their inquiries with the banks and machine issuers showed these were issued to Albury Property Management to accept marina and golf cart rental payments, while another collected restaurant income.

“Mr Sweeting advised me that upon further investigation, he discovered that the sales proceeds from the resort and marina operations were being deposited into Albury Property Management’s bank accounts and not Orchid Bay’s bank accounts,” Mr Gomez alleged.

“I am further informed by Mr Sweeting that despite his requests, James and Melonie Albury have failed to provide any agreements which would allow them to operate Albury Property Management from the premises of Orchid Bay, receive/collect income from the marina, restaurant and bar, receive income from rental homes owned by Guana Cay Abaco Development Company, and provide landscaping, maintenance, garbage collection and cleaning services to Orchid Bay,” Mr Gomez alleged.

“Nor have they provided proof of ownership for the golf carts and/or any agreement which would allow them to operate that business from the premises of Orchid Bay.”