Unclear whether Rain Forest will take legal action – Court lifts lien on Emilio Wilson Estate

POSTED: 09/26/12 12:31 PM

St. Maarten – Judge Mr. Diederik Thierry lifted the lien Rainforest Adventures St. Maarten and Rain Forest Tram Ltd. placed on the Emilio Wilson Estate on August 6. The court document shed some more light on the events that led to the plans to develop an attraction park on the estate, on the parties involved in the deal and on the financial aspects. Rain Forest Adventures chief engineer John Dalton still believes that building the attraction park is the best option for St. Maarten (see related story also published today).

While the court lifted the lien Rain Forest placed on the estate on August 6 it rejected a demand by the owners – Henri Brookson and three members of the Paas family – to forbid the company to put another lien on the property. The court decision seems to remove the last obstacle for the government to purchase the estate, though whether this will really happen depends on financing.

Up to June 12 of this year everything seemed to be on track for the development of the controversial attraction park. That day Brookson and Rain Forest Adventures signed a side agreement. But underneath the surface something was already bubbling. There was a letter from Brookson to the government dating back to February 15, 2010 in which he offered the estate for sale to St. Maarten. And on July 16 of this year, a bit more than a month after entering into the side agreement with Rain Forest Adventures, Brookson sent an email to Vromi-Minister William Marlin.

Four days later, when Marlin reacted to that email, everything changed – at least on paper. Referring to Brookson’s 2010 letter and his July 16 email, Marlin wrote: “This letter confirms our decision with respect to the purchase of 370,000 square meter of the Emilio Wilson Estate, including the historical parts (the estate house and barn) by the public legal entity St. Maarten at the total price of US$17,000,000 (seventeen million United States dollars).”

On January 25, 2008, Brookson and the three members of the Paas family bought the estate for $5 million from Emilio Wilson’s heirs Erna Diggs and Marni Weinstock. Brookson paid for 50 percent ownership $1,250,000, while the three members of the Paas family each paid the same for their one third ownership of the other half.

Under the Cooperation Agreement Brookson signed on June 23, 2010 with Rain Forest Tram Ltd. he stood to receive just $500,000 in cash and 25 percent of the shares in the company that was established to build the attraction park – Rain Forest Adventures St. Maarten N.V. The value of these shares was put at $2,587,500. Brookson would also receive $912,500 in seventeen annual tranches to service a mortgage on the property. The total price for the part of the estate Rain Forest wanted to use for its attraction park was valued at $4 million.

The immediate benefit from this deal for the estate owners was therefore just $500,000 in cash – no competition for the $17 million the government of St. Maarten offered out of the blue for a property Brookson and the Paas-family had purchased for a mere $5 million only four years earlier.

When Brookson’s attorneys told Rain Forest that the government had offered $17 million, the Cooperation Agreement gave the company the option to match the offer. That would have meant that Rain Forest would have to pay suddenly more than four times as much for the estate. On July 23, Brookson’s attorneys gave Rain Forest one week to take a decision, to which the company objected, saying that the term was unreasonable and requesting a meeting with the government to discuss the issue. That triggered a response from Brookson’s attorney Mark Meijjer that came across as rather brusque if not rude. “We have no indication that Rain Forest is even considering to match the offer,” was the most police part of the last correspondence between the two parties. Six days later, Rain Forest placed a lien on the estate.

From the court documents it appears that Rain Forest failed to meet the conditions that would have obliged Brookson c.s. to transfer the property. Among those conditions were a cash deposit of $1.35 million by Rain Forest and another deposit of $5 million by Carnival Corporation, the cruise line that backed the attraction park initiative financially.

In March of this year Rain Forest obtained a building permit. The company did not obtain a planning permit, but that was not necessary: the Erop – the interim legislation that required developers to obtain such a permit – expired at the end of last year. Since then a building permit for any project is sufficient.

That the money was not there is something Rain Forest unsuccessfully contested in court. It claimed that the funds were available via a so-called Shorex agreement Rain Forest Adventure entered into already on October of last year with the Carnival Corporation.
Judge Thierry noted that under the cooperation Agreement Rain Forest and Carnival would pump $6,350,000 into the company, and under the Shorex agreement only $1,780,000.

“That change in the conditions for the transfer of the estate could diminish the value of the 25 percent shares Brookson c.s. would receive and therefore they would receive less than the agreed upon price.”

It is unclear whether Rain Forest considers further legal action against Brookson and the Paas family. The attorney for Rain Forest Tram and Rain Forest Adventures, mr. M.R. Hammoud did not return phone calls yesterday afternoon.

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