Atlantis, Brookfield Battle Could Be Years

Tuesday 17th, January 2012 / 09:46 Published by

Atlantis, Sol Kerzner.

Top accountant and liquidator Craig Tony Gomez says the legal battle for Atlantis could go on for years, but in the short term, thousands of Bahamians can expect job security.

Gomez, the managing partner at Baker Tilly Gomez said, after reading over some of the particulars of the court document, that the ownership of the assets can be held in a vacuum. Gomez expects the day-to-day operations on Paradise Island will carry on despite the legal troubles.

“If Brookfield’s action is successfully blocked, one can assume the senior participants would want to replace them in a similar arrangement,” he told Guardian Business. “They also might just want to revert back to the initial position of trying to restructure. Either way, the management team will be in place and have to perform.”

Gomez said at the end of the day the resort still has to earn money. Over the next six months to a year, he felt confident that the thousands employed at Atlantis and the One&Only Ocean Club do not have to fear for their jobs. Beyond that, however, it is difficult to say what will happen.

According to the court document, the senior lenders suing Brookfield Asset Management allege the Canadian multinational is “positioning themselves to realize a profit several times the amount of the loan they are forgiving if the project turns around and appreciates in value over the coming years”.

Gomez pointed out that this statement, while the opinion of the senior lenders, should at least serve as an indication to Bahamians on the possible future of the property.

“A hedge fund has to make as much money as possible for its shareholders,” he added. “It will switch investments under its investment strategy if one doesn’t work, or they flip it when it becomes profitable. They are not hotel people. They are investment people. This indicates that as much as ever.”

While the document states the senior lenders seek to block the deal “with the clock ticking” and come to a speedy resolution, Gomez added that this scenario may carry on for years. He said “the reality is it often doesn’t work that way”.

Meanwhile, a level of uncertainty will remain for Brookfield, the senior lenders, and of course, The Bahamas.

On Friday, this newspaper revealed a legal battle being waged in the U.S. between Brookfield and senior lenders in Kerzner’s $2.5 billion mortgage debt. Four senior lenders from the U.S. are suing Brookfield, the Canadian conglomerate, to stop what they call “brazen self-dealing” that resulted in its apparent acquisition of Kerzner International’s assets in The Bahamas and Mexico back on Nov 30.

The plaintiffs allege that Brookfield colluded with junior lender PCCP and special servicer Wells Fargo, exploiting certain administrative powers to carry out the transfer of assets without approval and in violation to the loan agreement.

Source: The Nassau Guardian

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