The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A furious battle yesterday erupted over Grand Bahama’s Old Bahama Bay resort as a group of its condo owners vowed to resist moves to replace them as the management company for the property.

John MacDonald, president of Island Ventures Resort and Club (IVRC), the entity formed by the 73 condo owners to keep the hotel open following Ginn’s 2011 default, urged Old Bahama Bay’s owner/management company not to proceed with its planned Friday takeover as it “will not be vacating said premises”.

And, warning that IVRC would involve the police and launch Supreme Court legal action, he accused Lubert Adler-Old Bahama Bay (LRA-OBB), the vehicle that owns the West End-based hotel, of inflicting “emotional distress” on 100 staff, vendors and the condo owners due to the uncertainty created by its ambitions to take back management control from IVRC.

However, Michael Scott KC, LRA-OBB’s attorney, in a March 26, 2025, letter to Lennox Paton, legal representatives for IVRC, countered that the latter’s failure to smoothly handover Old Bahama Bay and its amenities - despite being given more than the required four weeks’ notice that its licence was to be terminated by March 28, 2025 - is responsible for the “chaos and discord” now occurring.

Pointing out that IVRC had been granted a ‘bare licence’, and not a lease, to operate Old Bahama Bay, its marinas, restaurants and other facilities, he demanded that it “fulfill their legal employer obligations” and accused it of owing almost $600,000 in unpaid VAT, real property tax and marina dockage fees.

Orlando-based Kingwood International Resorts, which has previously attempted to acquire Old Bahama Bay and the former Ginn development in Grand Bahama’s West End, has been lined up to take over the property’s management and operations according to promotional material seen by Tribune Business.

Describing Kingwood as “a proven leader in hospitality”, the brochure sent to all Old Bahama Bay condo owners confirms: “Old Bahama Bay Resorts & Yacht Harbour Rental Management is the official on-site management company for villas located within Old Bahama Bay Resort and Yacht Harbour, managed by Kingwood International.”

However, Mr MacDonald and IVRC yesterday voiced concerns over the Kingwood arrangement, and whether it has been approved by the Government to operate Old Bahama Bay, given that the Government has previously rejected its various applications for approval to acquire the former Ginn project from Lubert Adler. He also questioned if Kingwood has secured the necessary licences and insurance, plus work permits.

Lubert Adler, the investment bank that was Ginn’s former financing partner, took over the West End development’s core property and Old Bahama Bay after the developer defaulted some 14 years ago. It has been seeking a buyer, and exit route, for some time, and Tribune Business previously reported it had done an offshore deal with Kingwood where the latter’s principals took control of LRA-OBB and other affiliates.

However, Phylicia Hanna-Woods, the Bahamas Investment Authority’s (BIA) director, confirmed in September 2023 that Kingwood had been rejected as the project’s prospective purchaser because it was “unable to satisfy the Government of their fitness to do business in The Bahamas”. Now Kingwood appears to be back, albeit in an ownership rather than buyer capacity, and Mr MacDonald has seized on those concerns.

In a package sent to Old Bahama Bay condo owners, which has been seen by this newspaper, he also cited Kingwood’s payment of $325,000 in sanctions to the US Justice Department to settle COVID-related fraud allegations, and the $21m in “punitive damages” awarded against it by a Georgia court following a dispute with homeowners in one of its developments, as causes for concern. The Georgia ruling is being appealed

Mr MacDonald, in his missive to fellow condo owners, questioned how the transfer of payroll and liabilities to the new manager, along with accounts and assets, will occur. He complained that “there is nothing on paper or any type of real plan moving forward. Just commands and demands”.

And, in a March 26, 2025, letter addressed to both Lubert Adler and Kingwood, he warned that IVRC will not relinquish Old Bahama Bay’s management without a fight. “Be advised, in accordance with the attached letters, as legal tenants of the premises at issue, IVRC will not be vacating said premises. We are hopeful that you will abide by the appropriate landlord/tenant laws and not enter on to the premises.”

Seeking to deter LRA-OBB and Kingwood, he urged it not to change any locks or operating systems; remove staff and vendors; or remove property and equipment or in any way disrupt Old Bahama Bay come tomorrow when IVRC’s licence is allegedly due to expire.

“Any attempt will be referred to the local authorities for immediate removal and arrest if necessary,” Mr MacDonald wrote, “followed by the filing of a lawsuit by IVRC’s attorneys, Lennox Paton, for the following but not limited to possessions, actual damages, emotional stress to over 100 staff members, vendors and over 70 condo owners along with punitive damages and costs.”

Mr Scott, though, in a March 26, 2025, letter signalled that neither he nor his clients will be deterred. Writing to Sophia Rolle-Kapousouzoglou, the Lennox Paton attorney acting for IVRC, he argued that LRA-OBB had the ability to terminate IVRC’s ‘bare licence’ to operate Old Bahama Bay “for any reason.

And Mr Scott asserted that IVRC had been given “ample time to prepare for the vacation of the property and to fulfill its obligations”, while adding that LRA-OBB had ignored “material breaches” of the licence terms that it will seek to recover damages for.

These alleged “breaches” were not specified, although Mr Scott alleged that IVRC owed some $597,223 to his client representing VAT, real property tax and marina dockage fees that the latter was to pay to the Government under the terms of its licence.

“IVRC are required to vacate the bare licence property no later than 12pm on March 28, 2025,” Mr Scott wrote,”failing which LRA will take steps to secure possession of its property.... Any governmental approvals or otherwise obtained by my clients are of no concern to your clients by reason of the” bare licence’s termination, notice of which was provided some six weeks ago.

“In these circumstances, your clients should govern themselves accordingly and you are hereby notified that LRA will take all appropriate and necessary steps to effect possession as is hereby noticed,” Mr Scott continued. “For the sake of the employees of IVRC and the sub-licencees, it is detrimental for IVRC to ignore the clear terms of the licence and not abide by them.

“IVRC’s defiance and unruly conduct sows chaos and discord, creating fear and anxiety. It is our expectation, and the obligation of IVRC, that they immediately implement the termination provisions of the bare licence giving valid notice to their employees and sub-licensees and, in the circumstances, fulfilling their legal employer obligations under the Employment Act and Bahamian law generally.”

Ms Rolle-Kapousouzoglou, in earlier correspondence with Mr Scott yesterday, dismissed allegations that IVRC had breached the ‘bare licence’ agreement and voiced concerns over his hint that LRA-OBB will retain her client’s entire security deposit as a result.

“The allegations regarding the purported breached of the agreement by IVRC are rejected and, unfortunately, your correspondence has regrettably not assuaged the concerns of our client regarding the security deposit,” she wrote. “In fact, the statement in your correspondence... has only reinforced our client’s concern that an unfortunate but entirely avoidable situation could arise where LRA wrongfully seeks to withhold the security deposit.”

Mrs Rolle-Kapousouzoglou said Juljana Cama, on behalf of Kingwood/LRA-OBB, had confirmed on March 6, 2025, that all fees relating to the agreement have been paid by IVRC along with all utilities invoices. She reiterated that claims IVRC had violated the licence terms were “unfounded” and “cannot serve as grounds” for withholding her client’s security deposit.

“We have been instructed to advise that, due to your correspondence, particularly regarding the security deposit, IVRC has been compelled to decide not to vacate the premises on March 28, 2025,” Ms Rolle-Kapousouzoglou wrote. “IVRC remains open to agreeing to acceptable and reasonable terms for a mutually agreed third party to hold the security deposit, but is not willing to vacate the premises without this arrangement in place.”