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.”