Rainbow Beach Club: “Litigating owners plan for a hostile takeover”

POSTED: 04/26/11 11:59 AM

Rainbow Beach Club spokesman Erato strikes back

St. Maarten – Johnny Erato, the spokesman for the Rainbow Beach Club hit back at the 28 owners that are suing four companies, seven individuals and two banks that are linked to the property, by alleging in a statement he provided to this newspaper that an ex-comptroller is the driving force behind a plan for a hostile takeover. Erato also claims that owners are renting out their condos illegally and that they are evading local taxes to the tune of $1 million a year.

“The ex-comptroller for Rainbow Beach Club Management was dismissed by a St. Maarten court for embezzlement,” Erato states. “The Rainbow Beach Club Home Owners Association chairman wasted no time. He contacted the ex-comptroller and together they tried to create a plan to encourage condo owners to stop paying all monthly dues in an effort to force the current management out and thus create a takeover plan.”

Erato says that the plan included the re-employment of the fired comptroller. “How do we know this? By mistake the email for the takeover plan was sent to Rainbow Beach Club Management. The ex-comptroller not only stole money from Rainbow Beach Club but also corporate and payroll documents that she shared with the home owners association chairman.”

While Erato does not identify his opponents by name, he refers to one litigant “who suggested that re-sales were down at Rainbow Beach Club since our indigenous realtors were gutless.” The remark stems from an open letter published in local newspapers. “This is the same litigant who purchased multiple condos and doubled the investment eleven months later.”

Later in his statement it becomes clear that the home owners’ association chairman is Claudio Iodice, who presented himself in early July 2009 under a false name (as Jim Cummings) at the Today newspaper with a complaint about a court ruling that went against the owners. Iodice was accompanied on that occasion by Michelle Pollock who presented herself that day as Alice Jones.

In another open letter, Erato charges, the litigating owner urged other owners to join the litigation team. “Hurry and join before the 5 year statute of limitations runs out. It is urgent; send your check of $300 for the lawyers.”

Erato claims there is another open letter from another home owners’ association chairperson “stating she is so wealthy, she can endlessly litigate Rainbow Beach Club Management into submission.”

“One open letter from a Rainbow Beach Club owner litigant and group leader states that she hopes to make $750,000 per apartment via her group’s litigation against Rainbow Beach Club,” Erato states.

The 28 owners are taking the Rainbow Beach Club to court in a dispute over discrepancies between their purchase contracts and the deeds of division that were passed at a local notary.

But Erato claims with a verbatim reference to the rental clause that the purchase agreement “states emphatically exactly what Rainbow Beach Club owners purchased, including the fact that they may not rent privately.”

According to Erato “certain litigating owners” operate private rental web sites,” that were made even before they obtained their condo-keys.

“In the real world this is called a premeditated act of unlawful enrichment, but not for this group of trusting Americans. This private rental business within Rainbow Beach Club by many cheating owners does not only cheat Rainbow Management out of its due hotel commission (the main purpose for developing the property) but these owners slip under the government’s tax radar. We are talking about unrecorded amounts of over $1 million per year that this country will never see from these cheating owners,” Erato states.

The true perception from these innocent owners, Erato adds for good measure, “is that they could get away with almost anything in what they see as a banana republic.”

Erato further claims that several owners urge visitors who rent their condos via an information sheet to keep a low profile. “Remember you are not renting, you are a guest and not paying,” he stated.

Erato vehemently denies a charge by the litigating owners that they only received a copy of their deed of division shortly before their visit to the notary. “This lie is beyond the pale,” he states. “All owners, many of them with attorneys, had weeks and months in advance to go over all documents. At the closing buyers stated in writing that they had examined the deed’s contents and that it was signed after summary reading. “The idea was, let’s get our foot in the door, and then we will rearrange the furniture,” Erato scoffs.

Erato states in his reaction to the lawsuit that one of the litigating owners purchased five condos at Rainbow Beach Club and that he has in the meantime quadrupled his investment. “This is all about making big money under the government’s radar. It’s big business, nor rest and recreation when millions in unrecorded profits are made.”

Erato furthermore states that Claudio Iodice (again, without identifying him by name), the litigating chairman of the home owners association, is in the process of buying another $800,000 condo at the property. “He can’t get enough of a bad thing.”

In closing, Erato notes that there is “a new breed on St. Maarten, one that has learned how to beat the system while using our local court system as their private playground. So far they average about one new court case every two months. And the costs are merely pocket change for the group that is on a takeover mission. These are some serious city slickers who are determined to teach us island people some new tricks on finance and hostile takeovers.”

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Rainbow Beach Club: “Litigating owners plan for a hostile takeover” by
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Comments (2)

 

  1. Phil Doherty says:

    Wake up folks, the number of people suing this MONSTER is up to over 100 people on one site (RAINBOW) over 120, as we speak, people and growing per day, he has lost his legal cases in ALL of the front buildings, and is claiming to be the savior of all the rest, WHAT A LOSER!!!

  2. Lloyd Korzen says:

    So long story short as I read between the lines. The developer continued to manage the Rainbow long after it was sold out, sucking the fees being paid dry. One or more of the homeowners decided to try to put an end to this. The buidings are getting run down because any money that would be spent is would come out of the profits.

    Management of the property should be taken away from the developer immediately and offered up for tender to at least three other companies who can substantiate what they will do for the money they are paid and be held accountable on a monthly basis.

    As well there should be an independat consultant to oversee the progress again on a monthly basis.

    If I was one of the owners I would make sure I receive a monthly accounting of the state of affairs. If this isn’t done it is doomed for failure.

    This is nothing but a scam in progress controlled by the developers.

    I understand that things have changed since December 2013 and I as a potential owner would like top know what the resolution is and what the plan is otherwise I will look elsewhere.

    St. Martin is where I will retire some day as it is the most beautiful place on the planet. Sad to here about this ludicrist situation.

    I am a contractor in Cvanada and I can certainly be a large help to get this place back into shape in short order for a respectible price with some quality products.

    Here’s hoping that things work out for the owners.

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