Ginn Sur Mer Foreclosed Again. What’s Going On? [Updated 6/21}
Credit Suisse foreclosed on Ginn properties at West End, Grand Bahama in December 2009. Now another foreclosure is filed in the Bahamian Supreme Court. What’s happening? Inquiring minds need to know.
Palm Coast, FL – June 20, 2011 – [Updated 6/21 below] A June 9, 2011 Bahamas Tribune story reported that Credit Suisse and its syndication of lenders has filed papers with the Bahamian Supreme Court to foreclose on 1,476 acres of Ginn sur Mer property at West End, Grand Bahama. Several GoToby.com readers found this interesting enough to bring it to my attention. It’s interesting because Credit Suisse already foreclosed on the property in December 2009 in a New York City bankruptcy court. So why are they going through the motions again. I’m not an attorney, but a few speculations come to mind.Avoid property transfer tax
The Credit Suisse syndicate, presumably along with Ginn and Lubert Adler, formed G-LA Resort Holdings (Bahamas) to control their interest in Ginn sur Mer after the $675 million default and subsequent foreclosure. There was talk at that time of the New York foreclosure that Ginn-LA West End and Credit Suisse would form a joint venture to take the development forward or to sell it. Yet they apparently did not record the foreclosure and sale in Bahamas.
Could it be that they wanted to avoid a 10% Bahamian transfer tax? The New York Judgment of Foreclosure and Sale included $430,487,184.94 of principal plus interest totaling $64,608,426. At the time, interest was accruing at a rate of $91,404.49 daily. The Cushman & Wakefield appraisal used to justify the defaulted $675 million loan was allegedly vastly inflated. A transfer tax on either amount would have been very expensive. After all, the project had been advertised as a $4.9 billion resort community.
Ultimately, G-LA (now without Bobby Ginn) needed to gain Bahamian title. That was not accomplished by the charade foreclosure in New York. The recent Bahamas foreclosure filing lists only $61.351 million in principal and $16.576 million in interest. That certainly reduces any transfer tax.
Title of Ginn sur Mer land clouded
Another complication facing Credit Suisse and Lubert Adler is a lengthy lawsuit claiming Ginn’s original purchase of the West End property from Sammons was invalid as regards to 960 acres. The story of Anthony Cooper v. Ginn LA West End Ltd. is fascinating, involving land past down via deeds of ascension to the families of slaves and mixed-race offspring of white slaveholders. This tale deserves a more detailed telling at another time.
The crux of the lawsuit alleges that Ginn (buyer) and Charlie Sammons (the Jack Tar Resort as seller) conspired to illegally quiet title on land rightfully owned by Cooper’s relatives in order to complete their transaction. Complicit in this ploy was a member of the Ashe family, who reportedly received $100,000 and 77 acres to "make the title problem go away."
After years of litigation, the Cooper suit gained real traction when a Bahamian Court of Appeal set aside a lower court’s ruling against Cooper, directing the case back to a different judge. Is it possible that the foreclosure was initiated at this time in hopes of severing Cooper’s claim? Cooper has filed papers as an Intervener in the G-LA foreclosure, presumably to make sure his claim is not severed.
Loan to own
Credit Suisse and Cushman & Wakefield are defendants in a $24 billion lawsuit brought by property owners in Ginn sur Mer, Lake Las Vegas, Tamarack Resort, and Yellowstone Club. The suit alleges that Credit Suisse conspired to take over the luxury resorts by burdening them with loans backed by fraudulent appraisals by Cushman & Wakefield. The result of each loan was default followed by foreclosure and/or bankruptcy. Credit Suisse is accused of sweeping in to take over the resorts for pennies on the dollar using strategies that sometimes included sham debtors in possession. Is it possible that the latest foreclosure was begun in furtherance of the alleged loan to own scheme?
Same deal on Hilton Head
There were many property titles transfered from former slave families that excaped to the Hilton Head Islands and claimed land by adverse title. In the early 1960 the area started being bought up by investors who saw he easy way to buy blocks of land by offering owners individual owners cash. They then inflalated the value, (more commonly known as recapitalizing), at the new value created by having all the individual lots combined and proposing massive developements like the Sea Pines, that Bobby Ginn then got involved with in the 1980’s. Many were politicians from up north that came to Hilton Head for "Fishing", and saw the easy going uneducated blacks that could be bought off.
Stories abounded on Hilton Head,SC all through the 1990’s that would put the Sur Mer story in perspective, as nothing new.
The Bahammas authorithies will not allow the titles to change hands until they are paid what is due. They are beyond being bought off as some politicians stateside are, and so the refiling and "decapitalizing" of the property.
legal clarification regarding bahamas
The original foreclosure was filed in the US and not certified to the Bahamas. The Bahamas like all commonwealth-english law countries would have been required to appoint a conservator for the benefit of the creditors if the suit had been certified against the Ginn Sur Mer project. I believe both Mr. Ginn and Adler were in various legal negotiations to settle the loan from the CS participation during the initial foreclosure months. This is still in the Courts and the lenders need to know where all the money has gone.
AS fro the Bahamian Title law regarding generation property. Occupancy has to be continuous and for the whole portion of property being claimed. Otherwise it is prorated to the area which can documented as being farmed-occupied. They cannot claim 100s of acres if they only lived on 10-20. This is an old ploy by the Bahamians but there are records available (outside of the Bahamas) which can clarify the amount of property continuously occupied.
I have heard of claims being made due to a grandfather running goats on a property. These claims very seldom hold up under scrutiny. Title law in the Bahamas is an hybridized English system so all foreign citizens must be very careful when purchasing. Everything must be verified from multiple sources and a Quieting proceeding is required.
Reply to George
Both the Bahamian government and the courts are quite well known for their unscrupulous members.
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