By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A frustrated purchaser has accused Gulf Union Bank (Bahamas) liquidators of repeatedly stalling the $7 million sale of its largest remaining asset - a charge they vehemently deny.

Joe Moore, a partner in US-based Mountain West Investments LLC, told Tribune Business he “can’t understand the thinking” of the insolvent institution’s liquidators, accountants Raymond Winder and Graham Garner.

Despite offering to place the full $7 million purchase price for the 1,407-acre Anguilla Beach Resort property, located in north Cat Island, into escrow and close the deal within 30 days, Mr Moore said Gulf Union’s liquidators were repeatedly insisting that he instead pay just a $700,000 deposit.

Having negotiated with the duo for more than a year, Mr Moore said the liquidators were also demanding conditions and terms that will allow them to “drag out” any transaction with Mountain West.

Expressing concern that any resulting delays would allow the liquidators to seize his deposit, Mr Moore said the ‘stop-start’ nature of their negotiations had already seen one investor/development team he put together fall apart.

He also questioned why talks had been so protracted, given that Anguilla Beach was the biggest remaining obstacle to Gulf Union Bank’s liquidators closing what has been a near two-decade winding up process.

Mr Winder, Deloitte & Touche (Bahamas) managing partner, confirmed to Tribune Business that negotiations with Mr Moore and Mountain West had reached an impasse.

He argued, though, that the next move was Mr Moore’s, and depended on the latter’s willingness to pay the $700,000 deposit as evidence that his purchase offer was serious.

Mr Winder, who is also the receiver for the $3.5 billion Baha Mar project, explained that it was useless to accept the full $7 million purchase price from Mr Moore given the uncertainty surrounding required government permits and proposals.

As a foreign investor, Mountain West and other members of a purchase group will need various approvals from the National Economic Council (NEC), Investments Board and other government agencies to complete the deal - something that was outside the liquidators’ control.

Until these questions were answered, Mr Winder said it made no sense for himself and Mr Garner to complete a transaction with Mountain West.

Acknowledging that Anguilla Beach’s sale would pave the way for the liquidators to close Gulf Union’s winding-up, Mr Winder said he and Mr Garner had “exceeded expectations” in terms of recoveries for large depositors and creditors.

That, though, is unlikely to impress Mr Moore, who told Tribune Business that he first became involved with Anguilla Beach in June 2014, when he was approached by persons he knew who had a connection with the property’s then-owner, Erwin Knowles.

The latter had been seeking financial assistance to purchase the property back from Gulf Union’s liquidators. Mr Moore said subsequent investigations showed Mr Knowles remained the “legal owner” of the Anguilla Beach property, but the liquidators were seeking to sell it via a lien the bank had taken out prior to its late 1990s collapse.

Mr Moore said he eventually obtained $50 million in financing, which would have allowed Mr Knowles to reacquire the property, pay off all outstanding debts and have $34 million left over to properly develop Anguilla Beach.

While Mr Knowles “had his plans all drawn up”, and at one point “had everything in place” in terms of the necessary government permits, Mr Moore said Anguilla Beach was still a ‘dream’ laid out on paper only.

Besides condominiums, hotels, lodges, a marina and residential homes, the original vision also included a golf course, community centres and sports facilities.

Mr Knowles lacked only the capital to make this happen, but with “the project sitting there”, he and Mountain West were unable to agree terms.

“He wants things to be done exactly his way, and that’s not going to happen,” Mr Moore said of Mr Knowles. He explained that his plans for Anguilla Beach would be a phased development, starting with the hotel and coastal amenities, then working inland.

As a result, Mr Moore and Mountain West terminated their relationship with him, and in summer 2015 approached Mr Winder, in his capacity as Gulf Union Bank’s co-liquidator, to begin negotiations about directly purchasing Anguilla Beach.

“One of my reasons for pursuing this is that the project could be done, jobs would be created and this is something that could be done, needs to be done,” Mr Moore told Tribune Business.

“By July 2015, we’d formed an investment group, were ready to proceed and really started negotiating with Mr Winder and Graham Garner. We initially offered $5.5 million. They hummed and hawed, and never made a decision.”

Mr Moore said this offer was increased to $6.5 million in October 2015, and after conference calls and e-mail exchanges, Mountain West and its investor associates were prepared to close quickly despite knowing about the need for Bahamian government approvals.

With his investors becoming twitchy. Mr Moore said he was then informed that the liquidators needed to obtain an updated appraisal on Anguilla Beach to determine its valuation.

Then, on November 10, 2015, he received an e-mail from Mr Winder which said: “I am OK accepting the $6 million.” Mr Moore then sought clarification and completion of the sales agreement, only to be told four days later that the e-mail was mistakenly sent to him and “not for my eyes”.

Mr Winder confirmed the e-mail mistake, explaining that it was intended for Mr Garner, and that as co-liquidators they needed to agree everything before presenting it to the Supreme Court for approval.

He added that Mr Moore’s initial offers may not have “been good enough”, with the price below the appraised values for Anguilla Beach.

However, Mr Moore said that after upping his offer to $7 million, and a $700,000 payment into an escrow account, the liquidators accepted the price with the proviso that this had to be approved by the Supreme Court.

While told this would happen early in 2016, Mr Moore said the next time he heard from the Gulf Union liquidators was March 22, when they presented him with another agreement they wanted signed. By then, his original investors and development group had pulled out.

“In summer 2015, not only did I have an investor team in place, but a development team, with a builder ready to move,” Mr Moore told Tribune Business. “We lost all that.

“There’s a big hole in my plans right now. I don’t have these things completely plugged in, as I don’t have a developer to go on the project. Last year, we had a team ready to move on the whole thing.”

As a result, wrote to the liquidators’ attorney, Gail Lockhart-Charles, on May 16, 2016, to seek assurance that they were serious about reaching a deal with him. Pledging that Mountain West had 100 per cent financing, Mr Moore offered a $7 million price, and sought a thirty-day close.

Deciding that he would not pay a $700,000 deposit, Mr Moore said he eventually received an e-mail from Mrs Lockhart-Charles conveying concerns that he had failed to sign the March 22 sales agreement.

Despite further communications since then, the two sides have remained steadfast in their positions and refused to budge - Mr Moore offering to place the full $7 million into escrow with a 30-day close, and the liquidators seeking a $700,000 deposit into escrow and longer closing period.

“Why keep dragging this out? I’m back at the point where I’m not willing to draw investors in again,” Mr Moore, a 27-year veteran of projects in Seattle, California and Oregon, told Tribune Business.

“They have dragged it out for some reason that makes no sense. I just don’t know what they’re thinking. They keep sending me purchase agreements with months to close, and want this deposit.

“I ‘m not willing to go back and make it happen until I have some assurance that these guys are on board, and willing to make it happen.”

Mr Moore said he thought the fact that Anguilla Beach was the largest major obstacle to completion of Gulf Union’s liquidation “would have worked in our favour, but it hasn’t”.

Mr Winder, though, told Tribune Business that the liquidators had “no basis” to negotiate with Mr Moore until he made the $700,000 (10 per cent) deposit to indicate he was a serious, legitimate buyer.

Emphasising that the liquidators could not control, or get their hands on, money placed into escrow, Mr Winder said of Mr Moore’s concerns: “He’s basically refusing to pay a deposit. It doesn’t make any sense at all.

“We don’t know whether this guy, like a lot of persons, will reach an agreement with you, hold you to it, and then go shopping for financing. We try to have them demonstrate they have the capacity when they come to us.

“It’s not a lot of money. We ask for 10-20 per cent. What real estate transaction do you know where 10 per cent is not required in escrow?”

Mr Winder added that even if Mr Moore did pay a deposit, it was “not a quid pro quo” in ensuring that he and his investors obtained all the necessary government approvals.

“He may not qualify to buy the land,” the Deloitte & Touche (Bahamas) managing partner added. “I can’t complete the sale to him until that process is completed. It’s no use me taking his $7 million until then.

“If he’s not going to pay a deposit, then we have no basis to move forward. If he comes up with his deposit now, we’re prepared to execute a deal with him until the situation is confirmed or denied.”

Mr Winder said the Gulf Union liquidators would also have to do their own due diligence on Mountain West, but emphasised that they could not agree a specific closing date with Mr Moore as several issues were outside their hands - Supreme Court, as well as government approvals, for any sale.

Emphasising that the liquidators remained keen to dispose of Anguilla Beach, Mr Winder said it was the largest remaining Gulf Union asset, and that its sale would mark the beginning of closure to a process that began in 1997-1998.

“We have eagerly tried to sell the property; there’s no question about that. Once we complete that sale, we will be pretty close to closing the liquidation,” he told Tribune Business.

“That is the largest asset that is left. Once we have sold that property, we will begin the process of winding it up. Whatever’s left outstanding we will divided out or transfer to the various depositors that are due funds.”

Mr Winder said any remaining Gulf Union mortgages would be sold to another institution, and added that the liquidators’ recovery efforts had exceeded expectations.

“We would have substantially paid dividends that exceeded what we were originally expected to yield from this liquidation process,” he told Tribune Business.

“We’ve exceeded the expectations that the creditors committee originally had for us. It’s been a long haul, but this sale [Anguilla Beach] will give the larger depositors an even better position.”