Court orders RBC not to close accounts of Atlantis

June 07, 2014 11:08 AM
PHILIPSBURG - The Court of First Instance ordered RBC Royal Bank NV on Friday to continue its banking relationship with Atlantis World Management (AWM) NV, Dawn Properties Ltd. and International Financial Planning Service (IFPS) Ltd.
 
The Judge ordered RBC to keep open at least one bank account until a Judge has ruled in the court case on the merits, which were filed February 4.
 
In case of non-compliance, RBC would have to pay a fine of US $250,000 per closed bank account and $250 for every other banking service it would decline to provide in violation of the Court's decision.
 
RBC had wanted to fully terminate its banking relationship with these companies, of which Francesco Corallo is the ultimate beneficial owner.
 
RBC had informed the companies on February 15, 2013, that is would terminate the banking relationship as per March 16, 2013, because the bank feared reputational damage due to persistent negative publicity about Corallo, for instance about his alleged connections with the Italian mafia.
 
AWM manages Atlantis, Beach Plaza, Paradise Plaza and Dunes casinos; Dawn Properties owns Paradise Mall in Simpson Bay; and IFPS manages the business complex with restaurants near Atlantis Casino in Cupecoy. The companies have been in banking relations with RBC for the duration of between seven and 16 years.
 
Corallo's companies feared grave consequences should RBC be allowed to terminate its relationship with these companies. No other bank in St. Maarten would be prepared to engage in business contacts with Atlantis and the other companies, due to their relationship with Corallo, Atlantis' attorneys informed the Court during the hearing of the injunction.
Without bank accounts, the companies would no longer be able to make and receive cash payments, which could threaten their existence. The companies would be forced to make cash payments to creditors, among which 300 employees, the receiver and utility company GEBE.
 
Atlantis also pointed to the fact that its companies had never had any run-ins with the law, let alone having been irrevocably convicted of crime in St. Maarten, or elsewhere.
 
Recently, AWM had opened an investor account with RBC in Toronto, Canada, in which Corallo, the person who allegedly would be responsible for "reputational risk," was specifically mentioned, Atlantis' lawyers stated.
 
In a previous ruling, issued October 19, 2013, the Court had stated that the bank's fear of reputational damage was justified and that this was a valid reason for terminating the relationship.
 
Pending the outcome of the main case, however, the Court of First Instance deemed the interests of Atlantis to weigh more heavily than RBC's rights to close the accounts. Therefore, the Court ordered the bank to continue its banking relations with the Atlantis companies.

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