Ritz developer sued over loan

| 26/03/2012

30124_4320_l.jpg(CNS): Updated with court document — Having lost control of the Ritz Carlton, Grand Cayman, local developer Michael Ryan (on right of picture) is now being sued by the same company that has taken over the resort against a loan of almost US$234 million used to build it. According to documents filed in the Cayman Islands Grand Court last week, the current owner of the loan, RC Cayman Holdings, is seeking payment from Ryan as the company states that he is the guarantor for that loan. According to the suit, the US registered company is seeking from Ryan the amount of the loan, plus interest on the principal amount of over US$1 million, which it says is already outstanding, plus dailyinterest of over $48,000 until the loan is paid.

The writ states that Ryan was required to pay RC Cayman Holdings the outstanding cash by 15 March, just a few days after KPMG had been appointed as receivers for the various companies owned by Ryan that were involved in the development of Cayman’s only five star resort. The company states that Ryan signed as guarantor of the original loan in April 2007 and had “irrevocably and unconditionally” guaranteed the payment of the full amount of the debt but  failed to do so on demand.

RC Cayman bought the loan in question from Column Financial in May of last year. On 17 February the company filed a writ of summons in the Grand Court to prevent Ryan and various other defendants from interfering with its efforts to seize control of the Ritz. Some days later KPMG issued a statement revealing that two of its auditors had been appointed as joint receivers of the hotel.

Meanwhile, as Ryan faces mounting legal problems with the owner of the loan, his various companies still owe the Cayman Islands government $6 milllion in outstanding duty payments. According to correspondence between the financial secretary’s office and Ryan released to CNS following an FOI request, the developer had ceased making payments on the outstanding debt in the immediate wake of the 2009 election.

Although he had made regular payments from 2007 until the first quarter of 2009 during the PPM administration, on the appointment of a UDP government Ryan immediately stopped the payments and attempted to tie the money owed to the public purse with his desire to buy the land at Safehaven.

See related articles:

Ritz-carlton-faces-takeover

Ryan-tied-debt-dragon-bay

Category: Local News

Comments (57)

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  1. Anonymous says:

    So we can add this to the total sum Mac has personally wasted by his own decisions.  XXXXX  Anyone keeping a record?  Ritz, churches, GLF, Cohen…into eight digits now

  2. Anonymous says:

    I am just thankful that it is not Mr. Dart. We continue to say, 'thank you'. We need you here for your vision and the opportunity which you have extended and afforded to so many of us. 

    • Incognito says:

      I hope you feel the same way about "Mr. Dart", when he stops lining your pockets with money. lol

      Some people will sell their pride for nothing.. disgusting.

  3. Old Sea Captain says:

    Very photogenic, wonder how they would look in matching jump suits.

  4. Kadafe says:

    Bush 2012!!!!! Stop bush!!!!

  5. Anonymous says:

    Wow, I remember years ago how Chris and David Wight went on Talk Today and screamed day after day about how this whole Ritz deal was a bad idea and would end up being costly for Cayman. They sounded crazy back then but I guess they knew what they were talking about. We shoulda listened to dem Wight boys!

  6. Reality Check? says:

    Are there any history buffs out there that could help with this?

     

    I seem to remember theat when Ryan first came to Cayman, and the Ritz was nothing but a glimmer in his and McKeeva's eyes, he was involved in another hotel bankruptcy.  I believe he was co-developer with his father on a large project that went bust.  There was a dust up in the local media with many saying he would fail.

     

    Why is this relevant?  Besides letting a bunch of people say I told you so it would be interesting to see how this all played out.  Did the people involved in the prior project get screwed over or did they get paid.  The point is that Ryan has been there before and we havent.  He has experience in going bankrupt and knows the moves he needs to make to best protect his own interests.  We here in Cayman are too trusting and naive.  We need to wise up and not become his latest victim.

    • Anonymous says:

      Two projects – Costa Rica and the Dominican Republic – apparently went belly up.

      Can't remember which but he allegedly unloaded one on his former business partner knowing that it was insolvent, the guy then tried to sue him. In Costa Rica serious criminal charges were rumoured to have been threatened. 

      All that went on while RBS were handing over their investors money to Mr Ryan to bankroll Ritz-Carlton.

      It's all on the internet if anyone had bothered to look. Due diligence = a simple google search. 

       

       

      • Anonymous says:

        Not sure about the DR project but Costa Rica was well documented by Offshore Alert back in 2002.

        According to that Ryan even got his father tied up in some of it all. 

  7. Chris says:

    Mr. Bush we see you hugging and smiling up with a man who has shafted this country.

    Mr. Ryan was paying his debt to this country until you took over then your administration let him off the hook.

    We want to see how you plan to hang that failure on the shoulders of the PPM government.

  8. Anonymous says:

    Mac: Boy, dat is a tough one!

    Mike: They will bankrupt me

    Mac: You know they say, rope longa den time!

    Mike: I do not think that is appropriate right now

    Mac: Fool fool!

    Mike: You are no help

  9. Anonymous says:

    Do you really think these people can get broke.

    They won't . . . . . .Ordinary people get broke.

    And somehow the cayman islands are always in the middle of it.

  10. EYE ON THE ISLAND says:

    I want our $6,000,000 now with interest. If we had a leader he would be looking out for OUR COUNTRY but he put rich friends first and us last.

    • Anonymous says:

      You can't get blood from a stone. You may as well ask for $6 billion from Ryan, and as far as our leader goes, it's past time that we stop electing incompetents and then expecting them to suddenly become intelligent.

  11. Annonnymous says:

    I see an AIG bailout coming to be sanctioned by MR.'s UDP stalwart who helped him devise this tangled web in the first place….wonder who going spill the beans first?

  12. Ants Nest says:

    Macky ya Suite gone now Bo 🙂

  13. Anonymous says:

    Another status recipient for social services to take careof. How long had he been here before you granted him status Mac?

  14. Anonymous says:

    On the face of it Mr Ryan deserves no sympathy in that he certainly made considerable sums of money on the back of others’ funding (apart form the Banks who we also may or may not have sympathy for let us not forget the Schwan Charitable Foundation who I would guess may have had their large investment wiped out).

    Also undoubtedly large numbers of local businesses are owed money legitimately earned working on the project and they should of course not be forgotten.

    Was allowing the R-C to be built a mistake then?

    NO

    The days when the Holiday Inn / Galleon represented the type of product needed to generate serious tourist dollars had gone before Mr Ryan came about. Were it not for the R-C what exactly would our stay over visitors have on offer? Nothing that could genuinely put us in the upper leagues of destinations.

    Also let us not forget the numeber of hard working local businesses who enjoyed good contracts with the develooper and / or contin ue to enjoy good contracts with the operator.

    Yes the Government should have got more for the national coffers than it did (and frankly the $6M is pretty irrelevant in the overall scheme of things) but let us embrace the R-C for what it is – a valuable and ongoing contributor to the Cayman offering in competition for inward dollars.

    • Anonymous says:

      Wasallowing the R-C to be built a mistake then?

      NO

       

      Ofcourse you would come to this conclusion.   You assume progress would have stopped if the Ritz was not built.

      Was it built on false promises… YES

      Lesson learnt? Maybe..

      • Anonymous says:

        As the poster of the comment to which you reply I should stress that i agree with you that it would appeear that the R-C was built on false promises (to everyone, including it would seem RBS and Schwann) and things have gone badly. Lesson learned indeed that if you do not make absolutely sure of what you are being told, rely on the proposed outcome at your peril.

        And yes I do make the assumption that without Mr Ryan something like the R-C would not heave been built (which is not to say that no progress woulkd have been made, just not to the sort of level that it has). In support of that assumption I look to the remainder of our hotel product which is hardly leaping forward – but I accept that it is an assumption and not fact. 

        What I do believe is fact at the end of the day however is that if RBS have kindly made a donation to allow someone (the owners of the loan and ergo the development) to get a top notch hotel on Cayman at a fraction fo what it would have (did) cost to build then we have enjoyed a kick start to the product courtesy of some bankers who were duped just as much if not more than us.  I am not wringing my hands in despair about that outcome.

         

  15. Anonymous says:

    where is the collateral that was used to guarantee the 234 million? Did he ever have any large amount of money? Something is missing in this story

  16. Anonymous says:

    He has a very expensive private plane hangared at the airport.  I hope the government has had to good sense to confiscate his passport and impound the plane while this lawsuit is going on, if only to recover the $6M he owes the people of this country.

  17. SKEPTICAL says:

    Good example for Bush supporters of an old saying – “Show me your friends and I will tell you who you are”.

  18. Anonymous says:

    I have an idea – In exchange for the six million duty he owes the Cayman Islands, maybe he will give us his sailboat and we can all share it?

    Mike Ryan's boat  for sale –  $10.3

    http://elitechoice.org/2010/09/19/a-refitted-tenaz-on-the-market-for-10-3-million/

  19. Anonymous says:

    The above picture says it all…. you put these two together and they make mud. LOSERS.

  20. Anonymous says:

    Does anyone know what the limitation period is on "preferences". Hypothetically, if a debtor were to decrease his net worth by offering a couple of condos to a buddy on other than standard commercial terms, how much time would the receivers have to pursue the "buddy" in order to recover the difference between the value of the condos and the price the "buddy" paid? Then there is the hypothetical question of whether the receivers would have the cahones.

  21. Anonymous says:

    Nice old photo.  And now only Mac is smiling.

  22. Anonymous says:

    Why is Mac still in power squandering the Countrys money and still pulling a pay cheque, its amazing that he cant be stoped and be held accountable for this total disaster that he has created, he has not done one thing for these Islands apart from disgracing us. I would like him to meet Donald Trump, I bet he would FIRE HIM within minutes of meeting him.

  23. Anonymous says:

    GOOD

  24. Steve says:

    Holiday Inn and Galleon Hotel, you are missed.

    • Son of Thunder says:

      Oh my, my, my! How the "mighty" have fallen (mighty in their own mind). They are falling one by one, & more to come! They say the higher you climb (especially wrongfully) the harder the fall! Oh well, the biggest fall is yet to come, & we will all hear it! CRAAAAAAAAASH!

      • Anonymous says:

        As my granny would say, the higher monkey climbs, the more its bottom is exposed.

    • Kirkie Says says:

      Don't be surprised if Michael Ryan should disappear and leave this Island holding the bag. it is quite possible that the people who bought into the Dragon Bay Project will find themselves in the same boat as those persons who invested in the "Costa Rican Fiasco". Mr. Bush please tell us why you are so quiet on the matter of Mr. Ryan's debt, which we need very badly. You seem to not have any problem with  socking-it to the rest of us in the form of outrageous tariffs  and taxation, and you give away millions in the name of [So Called Nation Building]  So why not insist on Mr. Ryan paying us the money he owes.

      XXXX

  25. Knot S Smart says:

    This is all very negative to the Cayman Islands image so none of us should be happy about this financial fiasco!

    On another matter:

    Is it true that those two very special condos were recently sold?

    And I wonder if they were sold –  who was the purchaser?

     

    • Lachlan MacTavish says:

      Individuals that use Caribbean countries will continue to do so when the leadership allows it to happen. Proper leadership will protect Cayman from being used. 

      Sign the petition.

      Lachlan MacTavish

    • Peanuts says:

      To Knot  S Smart. Think sharp point!

      • Knot S Smart says:

        Good hint..

        Sadly… Our own Caymanian lawyers will help to conceal whether they were bought by 'Sharp Point' or a man from Timbuktu…

    • Simon Says says:

      Here we come Panama!!!

  26. Anonymous says:

    Borrowing from Peter to pay Paul always catches up!!!! What surprises me is the gall of Ryan because he fully knew that he simply did not have the funds to pay his debtors yet was still being disingenious by trying to get yet another project-Dragon Bay started.

    Unbelievable!!! This is what happens when due process is not followed we will always be the LOSERS!

     

  27. R.U. Kidden says:

     I wonder where Mr.Ryan will be when action is taken to collect the $234 million…….  I'll bet it won't be in the Cayman Islands!  It looks like the Cayman Islanders are going to lose again.

  28. Anonymous says:

    ROTFLMAO!!!!!!!

    You can kiss goodbye to the unpaid duty.

  29. Anonymous says:

    This is what the Government should have done instead of allowing Ryan to not pay ANYTHING since the election – shame on you Mac! You should pay this money to us yourself!

  30. Stiff-Necked Fool says:

    Tell Mac to help his friend now! This is a US registered company that is doing the sueing so I think their "Goose is cooked"!

  31. Anonymous says:

    And the plot goes deeper. Mac lets hope thy are is still pure and thy hands clean. 

  32. Incognito says:

     

    This is all great and dandy, but what about the local companies that are still owed payment for jobs that were complete for Ritz Carlton?

    Why doesnt the government help it's local people get what they worked for?? Ohh Snap.. forgot the government is only looking out for Ryan himself..SHAME SHAME SHAME

    • Anonymous says:

      Well, maybe Mac can do for these companies what he did for the ones that claimed that Matrix International ripped them off – Mac found money in Govt to pay the contractors then and he should find the money now to pay these ones too.

      • Anonymous says:

        We will never stop Caymanians fronting if a Matrix type situation happens again. When you go into business with someone you need to understand the risks, especially if you don't really know them.

  33. Anonymous says:

    I love it HAHAHAHA

  34. Anonymous says:

    He must have had plenty money to personally guarantee a loan so big. I dont know which one is more fool, Ryan for guaranteeing it, or RC Holdings for buying it. I guess Ryan was the bigger fool because now RC has brick and cement worth over 400 million for a loan worht 234 million.

     

    CNS: RC Holdings did not own the loan when Ryan made the guarantee.

    • Anonymous says:

      Dear CNS, RC bought the loan (supposedly) knowing that Ryan personally guaranteed it.

    • Anonymous says:

      The real fools were at RBS who originally bankrolled the entire project without apparently doing due diligence on Mr Ryan's other activities in Costa Rica and the Dominican Republic at the time.

      If you are not familiar with these it's well worth doing a google search.

      It's also worth reading up on his older brother, John Ryan.

       

       

  35. Anonymous says:

    I’m having a schadenfreude moment.

  36. Anonymous says:

    Ouch!!