By NEIL HARTNELL
Tribune Business Editor
Orchid Bay’s manager feared he would lose everything he had worked for if Royal Bank of Canada (RBC) called in its $1 million debenture, having kept the 203-acre Abaco property “open and operating by whatever means” available.
Christopher Albury, whose Coastal Property Services (CPS) bought out the RBC debenture to become the development’s secured creditor, alleged that his father, James, was in danger of losing his own house had the bank moved to realise its security.
Chris Albury, in an affidavit filed with the Supreme Court to support a failed bid to overturn Orchid Bay’s receivership, alleged that his father had used his own funds - and taken out a personal loan - to keep the property running after its owner ran into financial troubles in the US.
Roy Sweeting, the Glinton, Sweeting and O’Brien partner who is acting for the Alburys in their battle with the receiver, admitted that the outcome of Monday’s court hearing was “very disappointing” for his clients.
Confirming that Justice Estelle Gray-Evans rejected their application to overturn the receivership orders, on the grounds that Coastal and James Albury were not parties to the original action and therefore had no standing.
“Synovus [bank’s] receiver purports to have taken possession of the property on the strength of three Orders made ex-parte in that action in March, April and June of 2013 by the Deputy Registrar of the Supreme Court in Freeport,” Mr Sweeting said.
“As the sole secured creditor of Great Guana Cay (Abcao) Development Company, with the only subsisting charge over the assets of Great Guana Cay (Abcao) Development Company, CPS and its receiver, Mr Albury, are considering all their options for the lawful enforcement of their rights and remain confident that relief will be forthcoming sooner rather than later.”
A realtor and businessman by profession, Chris Albury effectively said his CPS company purchased the RBC debenture - taking its place as the senior secured creditor of Orchid Bay’s parent company, Great Guana Cay (Abcao) Development Company - as the only way to prevent his father losing hundreds of thousands of dollars.
“Before the debenture was purchased, Great Guana Cay (Abcao) Development Company was in default of the loan from RBC which was secured by the debenture, and RBC was threatening to take steps to realise its security interest, starting firstly with the sale of the house in which my parents have lived since 2000,” Chris Albury alleged.
“My father was also very alarmed, since he and several other employees were owed substantial amounts in unpaid salary due to them from Great Guana Cay (Abcao) Development Company, and my father had also used his own funds and taken a personal loan to obtain further funds to keep Orchid Bay operating.
“He and I both considered that if RBC were forced to realise their security interest, there was every chance that these debts could become unrecoverable, and my father would lose his employment, his beneficial interest in Great Guana Cay (Abcao) Development Company and the substantial amounts owed to him. The other employees would also lose their employment and the amounts owed to them.”
Chris Albury added that Albury’s Property Management (APM), a business owned by his mother, Melonie, had provided common area maintenance and garbage collection services for Orchid Bay for many years.
The company also provided property management services to Orchid Bay homeowners, dealing with short-term vacation rental clients; operated a golf cart rental business; and provided maintenance services for homeowners.
“During those times when Great Guana Cay (Abcao) Development Company was not paying my father his salary, my parents have been able to live on the income from APM,” Chris Albury alleged.
“Moreover, when Great Guana Cay (Abcao) Development Company was unable to pay its local expenses for such things as the purchase of gas and diesel for the fuel dock at the marina, APM has provided funds for that purpose as well.
“Funds from APM have even been used to meet Great Guana Cay (Abcao) Development Company’s payroll occasionally. My parents’ focus for the past two to three years has been to keep Orchid Bay open and operating by whatever means they could.”
After his CPS entity became Orchid Bay’s top secured creditor, Chris Albury alleged he was advised to appoint a receiver to prevent any of the other unsecured claimants from trying to put the development into liquidation.
“My father was the person most familiar with the assets and operations or Orchid Bay, and was already resident on the premises. As such, he seemed to be a very good and cost-efficient choice of receiver,” Chris Albury alleged.
The Alburys have thus presented themselves as the saviours of the Great Guana Cay-based Orchid Bay. James Albury had previously alleged that “faced with the loss of a real estate project in which he had invested 22 years of hard work and dedication”, he had explored ways to secure its long-term future.
But this appears to have cut little ice with the court-appointed receivers from Grant Thornton (Bahamas).
They, led by partner Paul ‘Andy’ Gomez, were appointed following an application to the court by Synovus Bank, the $27 billion financial institution that is seeking to enforce a $6 million-plus judgment against Orchid Bay’s owner - well-known Atlanta businessman, William B. Johnson, and his investment companies.
Mr Gomez, who has to-date successfully resisted the Alburys’ efforts to remove him as receiver, has raised a series of issues he plans to investigate in previous Supreme Court filings:
That Jimmy Albury is holding numerous conflicting roles, including those of property manager and Orchid Bay executive on one hand, and as receiver of and judgment creditor against Orchid Bay, on the other.
He is challenging whether the sale of Orchid Bay real estate to clear the former RBC debenture now held by Coastal was a “bona fide, arm’s length” transaction, as some $16 million worth of property was sold for $1.2 million.
Mr Gomez is also challenging the Alburys’ action in allegedly adding other debts owed by Orchid Bay/Great Guana Cay (Abcao) Development Company to the debenture, arguing that the security should be lifted through the receipt of $1.2 million from the real estate sale.
The receiver’s agents have also alleged that revenues generated by Orchid Bay’s operating assets, such as the resort, marina and restaurant, have not been deposited into its bank accounts but those of the Alburys’ instead.
Mr Gomez and his team have also claimed that the Alburys have yet to provide any agreements showing they were permitted to do these actions, plus lease premises at Orchid Bay.
In particular, Mr Gomez has alleged there is no evidence to support Jimmy Albury’s claim that 50 per cent of the shares in Great Guana Cay (Abcao) Development Company were being held for him in trust.
However, Chris Albury’s December 23, 2013, affidavit alleges that Philip Galanis, the HLB Galanis accountant and partner, was initially appointed as receiver over 100 per cent of Great Guana Cay (Abcao) Development Company’s shares prior to his replacement by Mr Gomez on March 21 this year.
The document then alleges that Grant Thornton (Bahamas) accountants, together with police officers and the Supreme Court’s Deputy Provost Marshall, Jack Davis, took over Orchid Bay on the same day that the Alburys’ attorney was challenging an Order requiring them to turn over numerous documents to Mr Gomez.
James Albury had previously branded this as “a fishing expedition”, and had urged the Supreme Court to overturn the initial Order that was obtained with only the receiver’s attorney present.
Detailing how the takeover occurred, Chris Albury alleged: “Mr Davis had the locks changed on all of the buildings in the marina compound, including my parents’ residence.
“He refused to allow either of my parents to collect their personal property, and even insisted on searching my mother’s handbag before allowing her to take it with her.”
Chris Albury alleged that Mr Davis took possession of computers, keys and records that were not the property of Great Guana Cay (Abcao) Development Company, “and threatened my father that he would be arrested by the police if he returned to the property.
“At first, my parents were denied entry into their homes, even when my father protested that he could not leave the property without his blood pressure medication. Later on, however, they were allowed briefly into the house to collect a change of clothes and a few personal effects under the supervision of a policeman.”
Chris Albury said that since their eviction, his parents have been staying at one of the Orchid Bay properties managed by APM. However, they would “soon have to find alternate living quarters” if unable to return to their home.
Alleging that his mother had been unable to operate her APM business, Chris Albury accused Mr Gomez of “substantially interfering” with his father’s management of Orchid Bay.
And he alleged that, since Mr Gomez was appointed receiver over Great Guana Cay (Abcao) Development Company’s shares, he could not “reach directly through and seize the assets” of the company.
And Jimmy Albury had previously claimed that Synovus, via Mr Gomez, had “arrived on the scene and began trying everything it could to get between Great Guana Cay (Abcao) Development Company and its secured creditor”.