Moratorium, trustees in place at Simpson Bay Resort Company

August 01, 2012 2:36 PM

SIMPSON BAY--The Court of First Instance granted a request filed by Simpson Bay Resort Management Company (SBRMC) to declare a moratorium on the Company to avoid the Court declaring it bankrupt. The request was filed on June 14 and the Court granted it on July 19.

According to Company director Mark Miller, management was forced to intervene and request a state of moratorium instead of bankruptcy, after four members of Worker's Institute for Organised Labour (WIFOL) and SBRMC employees had requested the Court of First Instance to declare the Company bankrupt in May 2012. The employees took this route in order to force the Company to abide by the court ruling of April 2, 2012.
 
A moratorium now means that management needs the approval of court-appointed trustees to take all legal decisions and as such, manage the business of the Company. The Court of First Instance has appointed attorneys Rik Bergman and Gert Bergman as trustees in the moratorium. Miller said management had been working closely with the trustees to manage the Company's business.
 
In the April 2 ruling, Judge René van Veen ordered Simpson Bay Resort to meet its obligations as employer towards WIFOL members, as stipulated in the collective labour agreements (CLAs) for line personnel, supervisors, middle management and administrative personnel of the former Pelican Resort Club.
 
The judge ordered SBRMC to pay WIFOL members' salaries retroactively and according to the CLAs, and to (re)employ workers in their respective positions until the moment it had been established irrevocably that SBRMC was no longer legally obligated to meet the stipulations in this verdict.
 
In a July 31, 2012 letter to employees, Miller said: "If the Company was declared bankrupt, the owner of the Resort would have most likely ended the operating agreement between the Resort and the Company. This means that if the bankruptcy request of the members of WIFOL had been granted, the Company most probably would have lost its only source of income. This could still happen if the Company is declared bankrupt in the future."
 
"The decision to file for a moratorium was taken after WIFOL and the four members of WIFOL who requested the bankruptcy refused to stop execution measures pending the final decision of the Court of Appeal. The decision to request the state of moratorium was as such taken to allow you to continue working pending the final outcome of the court cases," Miller said.
 
Miller told the employees that management realises that the grant of the moratorium will also have a negative impact on the business of the Company and ultimately its ability to survive. A moratorium, for example, means additional expenses in the form of trustee fees and general operational expenses.
 
"These additional expenses come at a difficult time where the operation of the Resort is already greatly burdened. The simple reality is that these unnecessary expenses could have been put to much better use for the benefit of the Company and also your employment," Miller said.
 
He added that WIFOL and its four members who had requested the bankruptcy had not considered the consequences that a bankruptcy would have for the company's 91 permanent employees.
 
"Management regrets that WIFOL and the four members of WIFOL who requested the bankruptcy did not agree to suspend execution measures pending the decision of the Court of Appeal, now scheduled for August 31, 2012. This decision obviously will have great consequences for the ability of the Company to continue its operation. In other words: this verdict will have great consequences for the capability of the Company to continue paying your wages going forward," Miller said.
 
He added that management intended to schedule another meeting with all employees as soon as the August 31 verdict was rendered.
 
Miller told the employees that the immediate costs of the April 2 verdict would be in excess of US $1.1 million. The overall cost and expense of this verdict, he said, amount to between US $5 million and $6 million.
 
"As management has stated from the beginning, these costs will most probably result in the financial ruin of the Company. These costs seriously endanger the business of the Company, your present employer. It is for this reason that management has made all possible efforts to avoid being unnecessarily and unjustly burdened with these costs and expenses. You might have been told, and therefore believe, that management was fighting you since management was unwilling to pay you, assuming you are one of the persons that was also employed by Pelican Resort. The reality is that for the last 1 1/2 years management has devoted great efforts and resources to fight in order to ultimately be able to also preserve your employment," Miller said.

(The Daily Herald)

In the court cases Simpson Bay Resort Management Company (SBRMC) was represented by attorney Jairo Bloem of Bloem & Associates. Workers Institute for Organised Labour (WIFOL) was represented by Maarten Le Poole and Wim van Sambeek of HBN Law on Sint Maarten.

Related articles:

- WIFOL’s ‘willing to talk’ with Simpson Bay Resort

- Resort threatens again with closure: Court rejects Simpson Bay Resort’s request to freeze April 2-ruling

- Court turns down challenge request in Simpson Bay case

- Lawyers challenge judge in Simpson Bay Resort case

- Van Sambeek: Simpson Bay Resort unresponsive to negotiation efforts

- Surprise ruling by Sint Maarten court

- WIFOL wins case in ongoing Simpson Bay Resort struggle