Retroactive bankruptcy judgment puts bonds at risk
$30 MILLION in bonds issued by a hotel development company in 2012 are at risk following a judgment retroactively declaring it bankrupt.
The First Circuit Court of Coclé handed down a judgment on October 21 decreeing that R.G. Hotels, owner of the Ibiza Crown and Ibiza Coronado projects, went bankrupt July 31, 2012.
The judgment, has placed the future of the company in disarray, and the bonds at risk reports La Prensa.
The decision came a month after the new administration of the company requested to enter voluntary bankruptcy after finding several financial irregularities.
The retroactive bankruptcy declared by Judge Manuel de Jesus Corrales Hidalgo was based on financial statements submitted to the court.
The decision means the bondholders will not have access to a trust that was used to secure the bonds when they were issued, a fact that has generated confusion in the financial sector. La Prensa sources have also warned of potential problems with external audits of the company.
The developer has previously come under scrutiny because of a controversial loan it was givenby Caja de Ahorros in which it used the social areas of its projects as collateral. That agreement violates property laws, as those areas are the common property of the entities who invest in the project. Caja de Ahorros has foreclosed on those areas, but has faced lawsuits from property owners.
