Ginn Sur Mer Lawsuits Continue to Move Forward

Meanwhile, a Ginn spokesman in Bahamas implied the lawsuits will not affect Ginn sur Mer when interviewed by The Freeport News last week.

Palm Coast, FL – March 15, 2010 – Ginn Development senior vice president Al Jones was interviewed by The Freeport News last week (read story). With carefully worded responses, he managed to put a positive spin on Ginn’s progress at Ginn sur Mer, the $4.9 million mega yacht marina and casino project on Grand Bahama, implying that the project is unaffected by a series of lawsuits. An examination of the Second Amended Complaint and the Plaintiffs’ Motion for Partial Summary Judgment will lead you to disagree with Mr. Jones.
In fact, one lawsuit previously reported by continues to move forward. While complaints represent alleged wrongdoings, not convictions, they often provide interesting information about the basis of the allegations; additional information in the chess game strategy of the plaintiffs and defendants.
I’ve attached filings in two related cases affecting Ginn sur Mer. Several charges are alleged against Ginn and others participating in the sales of lots at Ginn sur Mer.
Credit Suisse $675 Million Loan
Ginn represented in sales literature and in the sale contract that "each Ginn Community is separately owned by an independent Project Partnership, and each such Project Partnership is solely and exclusively responsible for the obligations and liabilities incurred in connection with the acquisition, development, financing, marketing, management, and operations of the specific Ginn Community owned by such Project Partnership." The lawsuit alleges that this was a false and misleading statement.
In fact, Bobby Ginn pledged his ownership interests, along with the ownership interests of his financial partner Lubert Adler as collateral for a $675 million Credit Suisse credit facility.
Further, the $675 million credit facility was used to provide a $332 million distribution DIRECTLY to Lubert Adler and Bobby Ginn (over 49% of loan proceeds).
The $675 million loan was used to fund the development of Ginn Communities owned by five theoretically independent Ginn Project Partnerships, including Ginn sur Mer (also known as Versailles sur Mer or VSM).
The ability to repay the $675 million debt was dependent upon cash flow from sales in the Ginn Communities owned by five theoretically independent Ginn Project Partnerships, including VSM.
The controlling Ginn entity (Ginn-LA West End) was liable for the full amount of the $675 million debt even though the proceeds of that credit facility were used for the Ginn Communities owned by five other Ginn projects.
The VSM land was mortgaged for $276,750,000 of the $675 million credit facility even though it received only 2% of the loan proceeds.
Credit Suisse foreclosed on the Ginn sur Mer project just before the first of this year.
Inflated Appraisals
The Credit Suisse (CS) loan was based on a non-conforming appraisal methodology, setting value based upon projected cash flow from forecast sales. [Another lawsuit alleges that Credit Suisse intentionally enticed Ginn into the credit facility with the false appraisals with full knowledge that Ginn would default, allowing either Credit Suisse or a surrogate to assume control of the indebted development.]
Ginn Financial, the mortgage originating subsidiary of Ginn-LA attempted to use the CS appraisals to support inflated selling prices of VSM lots. When one appraisal company refused to provide appraised values equal to Ginn’s selling prices, Ginn Financial shopped for another appraisal company that complied with Ginn’s request to appraise at the selling price without comparing values with similar properties outside the Ginn project (by using non-conforming appraisal methods).
Lender Shell Game
Sales contracts and loan origination documents specified that Ginn Financial was the lender that would provide mortgage financing to buyers. Closing documents disclosed that another entity, unlicensed to lend at that time, provided the loan.
Interstate Land Sales Full Disclosure Act (ILSA)
The suits allege several ILSA violations. The HUD registration failed to include information about the $675 million CS credit facility. Property reports failed to disclose, as required, complete information on property taxes. Neither did they include material facts about recording deeds in the Bahamas.
The allegations in these lawsuits, some undisputed by Ginn, make it difficult to put too much credence in Al Jones’ representation to The Freeport News. Clearly, the Ginn sur Mer project has been and will continue to be affected by both Ginn-LA’s financial difficulties and by the active lawsuits.
6 replies
  1. John
    John says:


    Now this is what I call a law suit! I just read through this for the first time this morning and this one has the makings of something interesting to watch unravel.

    I say kudos to the appraisal firm that turned down the money and the opportunity to be the go to guys because they were not comfortable with what was being asked. If more people had this kind of integrity and knowledge we would not be in the position we are currently in as a Nation.

  2. Thomas Ginn
    Thomas Ginn says:

    Ginn Sur Mer Lawsuits Continue

    This community was not the normal…. Hard to appraise when nothing to compare to and that’s why a non-conforming appraisal was done. Lets not forget that property values all over the US and other countries continued to go through the roof.

    Ginn’s request to appraise at the selling price without comparing values with similar properties outside the Ginn project (by using non-conforming appraisal methods).

  3. bankslayer
    bankslayer says:

    Ginn Sur Mer

    It is hardly something new for Ginn to be accused of fraudulent appraisals, they have been accused of doing it in every Community. Isleworth was used as a Comp for Bella Collina and Reunion for instance, this was outrageous at the time Bella Collina had nothing it was dirt, but they appraised the lots up to $2.1m those lots are now on offer for under $100,000 over 95% drop in value and they are not even selling at that price. A golf lot Bank Owned is for sale at $6,700 a drop of 99% and still not selling. As for the post saying Ginn Sur Mer was not ‘normal’ you are correct it was dirt with nothing else there and should be appraised as such. These appraisals were always based on Bobby Ginn’s ‘visions’ and not reality. The appraised value is how much that lot is worth on the day of the appraisal not what it will be worth if Ginn finishes the Community according to his ‘vision’ which we now know has never happened in any of his Communities. The appraisers have a lot to answer for and will be made to pay for their greed when they are in Court and I am sure they will be pointing the finger at Ginn to get themselves off the hook, it is going to be very interesting indeed.

  4. david
    david says:

    self employeed

    As a former ginn employee, i have been waiting for over 3 years to say this…

    Al Jones is a total retard! I am suprised this guy makes it out the front door every morning.

  5. cd
    cd says:

    i agree

    i agree Al Jones is a tard. Along with wayne smith and all the other buddies bobby put on the pay roll. oh yea and crooks too. we would all still have jobs if they wouldn’t have been using company money for there houses, boats trips and race teams

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