RG Hotels investors left holding the candle

INVESTORS in  RG Hotels who parted with $30 million for bonds  bonds issued by R.G. Hotels in 2012 have been caught in the middle of a legal dispute between the current owners and the founders of the company.

The company , is now facing a retroactive bankruptcy process, a decision that has sent shock waves through Panama’s financial community.

Antonio Bonilla, a foreign investor in R.G. Hotels, claimed on Tuesday, December 1, through his lawyers that the company he bought was a “house of cards” that used false information in their financial statements and overvalued properties.

He is claiming that guarantees that support the bond issue have a value of only $2.1 million, while those of bonds are now worth $7 million reports La Prensa

ABS Trust, the company that manages the collateral, claimed in a January 2015 letter sent to the Superintendency of Securities that the assets in their custody had a value of $13.8 million.

With both the current and former owners pointing fingers at each other, the bondholders are left uncertain of how much of their investment they will get back. Bonilla, said Tuesday that, after analyzing all the financial information, he concluded that the company, which was purchased for $125 million, is actually worth $35 million, while its debts total $70 million.