Standard Trust director guilty of mismanagement

POSTED: 11/7/13 1:53 PM

Court holds De Tullio-Stamm responsible for deficit in Busarov-bankruptcy

St. Maarten / By Hilbert Haar – The Court in First Instance has found Corinne de Tullio-Stamm guilty of mismanagement and holds her responsible for the complete deficit in the bankruptcy of Yordan Busarov’s Evmolpia Private Foundation. The court sentenced De Tullio-Stamm to pay the trustees in the bankruptcy,  Hendrich Seferina and Maarten Le Poole of HBN Law an advance of 200,000 guilders on the deficit that could run into the millions of dollars.

Evmolpia’s bankruptcy is linked to a plan to construct an apartment building in Oyster Pond on a piece of land near the turnoff to the French side. Construction started but the building was never finished.

In April 2007, Standard Trust, of which the 50-year-old De Tullio-Stamm is a director, established Evmolpia at Busarov’s request. Busarov and his girlfriend Penka Ivanova Cvetkova were the beneficial  owners of the foundation. A couple of weeks later, Busarov gave the foundation the piece of land in Oyster Pond. The idea was to build an apartment complex and to sell the apartment rights to third parties.

In June 2007, Twoliwalks Construction – a company of Busarov – signed a contract for the construction of the complex with the understanding that it would be finished within twelve months.

On July 5 Albert van der Waag, a professor of behavioral and clinical medicine at the /American University in Cupecoy, bought two rights of apartment in the project for $500,000; he also loaned the foundation $400,000 at a stiff interest rate of 15 percent. In February 2009, the foundation borrowed an additional $775,000 from Van der Waag against the same conditions and with the understanding that the loan was due in August of that year. Van der Waag obtained a right of mortgage for $1,155,000 as security for his loan.

In the same month, the foundation sold three rights of apartment to Pentar Ltd., a company based in Anguilla for $1,200,000. On the same date (February 26, 2009), the foundation sold two rights of apartment to Beehive realtors NV for $800,000 and the economic ownership of two other rights of apartment to Van der Waag for $500,000.

Interestingly, both Van der Waag’s $500,000 purchase contract, the contract with Pentar and the deals with Beehive and Van der Waag’s second contract state that they paid the price in full to the foundation. Together with the two loans, Evmolpia received therefore $4,175 million.

In July 2009, De Tullio somehow smelled a rat. As a director of the foundation, the Standard Trust Company “accepted” the resignation of Standard Trust as sole board member and of Corinne de Tullio-Stamm as the sole member of the advisory board. They were replaced respectively by Yordan Busarov and his girlfriend Penka Cvetkova.

Four days after this decision, the loans were not repaid to Van der Waag and the apartments were not ready. Two years later, at a public auction in September 2011, Van der Waag bought five rights of apartment for $500,000.

On February 27, 2012, Evmolpia was declared bankrupt. When Corinne de Tullio was questioned as a witness in the bankruptcy on June 11, 2012, she stated that the foundation had never had a bank account and that the foundation never received the two loans from Van der Waag (totaling ($1,170,000).

According to the court ruling, De Tullio also stated: “Liabilities were contracted of which it was in my opinion foreseeable that they could not be honored. The foundation borrowed more and more money against a high interest rate, with short terms and high fines while the real estate market already was not too good.”

On June 25 of last year, the trustees put a lien on real estate belonging to De Tullio for an amount of $1,435,000.

The trustees asked the court to declare that Standard Trust and De Tullio are guilty of mismanagement and that this mismanagement is a prima cause of Evmolpia’s bankruptcy, to sentence De Tullio and Standard trust to pay the deficit from the bankruptcy and to pay an advance on this deficit of 200,000 guilders.

Standard Trust and De Tullio-Stamm countered that they are suffering damages from the procedure the trustees have initiated and asked the court to sentence Seferina and Le Poole to pay for this. They reproach the trustees for abusing legal procedure and that this is damaging their reputation.

Standard Trust’s reputation – and that of its directors Corinne de Tullio-Stamm, her husband Allard Stamm and Jodi Lynn Garner – suffered already a heavy blow during the past couple of years when the company was dragged into the Marcel Loor-investigation with accusations of money laundering. On appeal, the company and its directors were acquitted of money laundering in November of last year but they were fined 10,000 guilders (almost $5,600) each for failing to report unusual transactions to the Financial Intelligence Unite MOT.

The court rejected Standard Trust’s defense that Busarov was the actual director of Evmolpia. “”This does not set Standard Trust as the formal director free of its responsibilities and liabilities,” the court ruled. That the trust company opposed Busarov’s policy, “is insufficient to assume that it took measures to avert the consequences of Busarov’s actions.”

The court held it against Standard Trust and De Tullio that they did not maintain a proper administration for the foundation. That Busarov refused to provide figures to the trust company is irrelevant, the court notes in its ruling: “This does not take away the obligation of Standard Trust to produce annual accounts.”

The court ruled that Standard Trust and De Tullio-Stamm’s mismanagement was an important cause of the bankruptcy and that they are liable for the deficit – all the debts that cannot be paid after a settlement.

 

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