Ryan accused of funds misuse

| 12/04/2012

MIKE+RYAN+3.jpg(CNS):The developer of the Ritz Carlton, Cayman is facing further legal trouble as a result of another writ filed in the Grand Court this week relating to companies he is alleged to have owned that are now in the hands of creditors. Michael Ryan has been accused of misappropriating funds from companies that were closely involved with the construction of the islands first five star resort. The companies, now controlled by RC Cayman Holdings LLC, which has also taken over the Ritz-Carlton, have sued Ryan and a number of other companies he is believed to own for undisclosed sums that the writ says belong to the plaintiffs. Ryan described the situation as a misunderstanding and said no demands were made on him before the writ was filed.

The companies which were said to have belonged to Ryan — Cesar Hotelco (Cayman) Ltd, Cesar Properties Ltd, Condoco Grand Cayman Resort Ltd, and Condoco Properties Ltd — now managed by the creditor, which holds a US$250 million loan taken out by Ryan, are suing him and several other companies he is alleged to still own — Orion Developers Ltd, Deckhouses Construction Company Ltd, IRR Limited, Endless Service Management Ltd, and BlueTip Watersports Ltd – as being the recipients of the money that the creditor says Ryan moved from one place to another without the authority.

However, Michael Ryan told CNS that Orion has been the developer, manager and agent for the companies in receivership for many years and the lending group is aware of how Orion operated the business and the receipt and expenditure of funds on its behalf.

“Any misunderstandings about that could have been resolved without the need for legal action," he told CNS on Thursday.

“I believe that by taking these actions the lender's true goal is to try to embarrass me personally and ruin my reputation both here and abroad. I look forward to the proceedings being resolved in my favour once the allegations are actually made and I have the opportunity to demonstrate the true position. I regret that the minority shareholders and lenders have chosen to take this course, which can only damage to the project's value and reputation as well as harming the image of the Cayman Islands and the values for everyone who has property or investments here,” Ryan added.

The writ, filed on 10 April in Cayman’s Grand Court, alleges that Ryan received and/or misappropriated money and property belonging to the plaintiffs and illegally transferred them to the defendants, all of which, the creditors say, Ryan has some form of direct or indirect benefit.

This amounted to a breach of his fiduciary duties, the plaintiffs claim, but no actual values have been revealed. The plaintiffs, who are essentially the companies Ryan used to control but which are now in the hands of his creditors, are seeking an order from the court to force him to return whatever has allegedly been misappropriated.

This latest legal claim comes on the heels of RC Cayman’s writ suing Ryan for the outstanding loan of US$234 million used to develop the Ritz Carlton, Grand Cayman, for which Ryan was the guarantor, according to the creditors.

RC Cayman had bought the loan from Column Financial last year, which had bought the loan in 2007 from the original lenders, The Royal Bank of Scotland.

Ryan told CNS that as part of his desire to see the Ritz-Carlton’s value and reputation preserved he had been reluctant to comment on the lender's decision to appoint receivers. 

“That is their prerogative under the security documents, and although it is a standard provision, in this case it was unwarranted: the stated reasons for invoking the remedy were incorrect, and it impacts negatively on the Residence owners and guests at The Ritz-Carlton as well as the Cayman Islands generally,” he said, adding that, in the face of difficult economic times, he had tried to reach an amicable solution with the lenders.

“Despite those efforts, in March — without any warning whatsoever — receivers were appointed and my involvement with the hotel and project I had built was summarily terminated,” Ryan stated, adding that it had come as a complete surprise.

He also claims that at first he had assisted the receivers but that he is now owed money as a result of his efforts to support the project, “totalling many millions of dollars”, by the companies now in receivership.

He accuses the creditors that now manage those companies of launching the recent legal action against him without warning. 

“I have not received any demand letters or prior notice of the claims that were filed, and the most recent claims have not even been served on me," Ryan said in an email. “I do not know what the alleged complaints are because the documents are so vague: I am going to try to expedite the claims so that they can be defeated as soon as possible and so that the amounts due to be paid to me and the other companies and individuals involved can be collected.”

Ryan said that he believed the litigation was designed to attack him personally to taint his reputation as the documents show no details about the alleged misappropriation of funds and added that he believed it was a tactical move.

See writ filed in Grand Court below.

Category: Local News

Comments (41)

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  1. Anonymous says:

    Another story where it shows that it is very very windy on the mountain top!

  2. Anonymous says:

    "I believe that by taking these actions the lender's true goal is to try to embarrass me personally and ruin my reputation both here and abroad."

    Indeed an untarnished and stellar reputation both in the Cayman Islands and abroad… oh wait a minute?! 

    • Anonymous says:

      After reading this from 2002, why would anyone want to do business with these people and companies?

  3. Anonymous says:

    Flight risk maybe ?

  4. The Magic Dragon says:

    Im sure this is all some crazy mix-up. A little dash of fine print, and a great lawyer, abra-ka-dabra, hocu-pocus, innocent man!

    *Im rooting for you Bro, us caymanians need to stick together…..no matter how many times we find ourselves in legal complications.

  5. Dreadlock Holmes says:

     He must be an astute businessman .He sure owned,incorporated,operated,was invovled in,had a hand in, shuffled interests and payments between….a lot of … businesses, enterprises, affiliates subsidaries, and companies.

  6. Anonymous says:

    So Ryan thinks the lenders real goal is to embarrass him? He doesn't need any help from a lender. He has done that all on his own. He should be embarrassed that he has made no attempt to pay government the millions of dollars he owes.

  7. Knot S Smart says:

    How can one man get in so much damn trouble?

  8. Anonymous says:

    Worried about his reputation abroad??? Get real it was just a matter of time, Canada and Costa Rica both have examples of the reputation,

    • Scottish,Irish,Jamacian born CAYMANIAN says:

      Those facts alone should have made his first attempts to do buiness in Cayman SUSPECT…….

      • Anonymous says:

        Infact, some of them ( of course, if true) may have even disqualified him from having a work permit or a trade and business license but of course we do not enforce any of our laws intended to protect us! Anyway – I wonder, did he even have a work permit before he became Caymanian? If he didn’t he was probably never legally resident here? Mac, Mr. Attorney General, Governor, how did that work again? We would love to know – please help the smell to go away. What is the truth?

  9. Anonymous says:

    Sounds like one of the characters cayman would bring down to speak at the outstanding cayman youth awards. You know, a shining example of what it means to be successful

  10. Anonymous says:

    OMG! NO!

    • Empty Chair says:

      Oh my, it gets worse for Mikey. The funniest part is where Mikey claims that this is being done to him to try & embarrass him & ruin his reputation. He doesn't have to worry about that because that was ruined many years ago.

      He is beginning to sound like his good old friend Mac, always blaming others. He can run but he cannot hide, & he can blame anyone he wants but he STILL CAN"T HIDE!

      Poor Mikey.

    • Stiffed-Necked Fool says:

      "the lender's true goal is to try embarrass me personally and ruin my reputation both here and abroad" – I would like to ask Mr Ryan when last has he visited Costa Rica and if infact he can actually visit Costa Rica. I think he should check how "good" his reputation is in Costa Rica and he will then know that he should not worry too much about what "the lenders true goal" is, as I feel he will find that his reputation is already ruined "abroad" and in my personal view it is not better locally!

    • Chris Johnson says:

      Ryan refers to minority shareholders taking action. Well that is not disclosed in any court documents. Just who are the minority shareholders? At all times the people of the Cayman Islands were led to believe that Ryan owed the whole complex. Ryan if u have any credibility left please put your cards on the table. XXXXX

      • Anonymous says:

        I guess the Trade and Business licensing authorities would have to have full details of all the shareholders, after all, the Law requires it. Tell me, how does the 60:40 rule work when the Caymanian majority owner of, say, a waterspouts business, is no longer in control?

  11. Anonymous says:

    I wonder if there are top people in Cayman worried about what might come out about payments being made of assets transferred to them?  Know what I mean?

    • Anonymous says:

      You are on the money with that one.

      Police – please follow up on this if you are currently still in the clouds on this one. 

    • Anonymous says:

      It's all coming apart. When the money boys – the bean counters get involved all the facts soon come to light. I suspect there are some very nervous politicos in Cayman.

  12. Misappropriation of Assets says:

    What! One of Bush's main supporters is being accussed of fraud! Preposterous. Bush only deals with outstanding citizens/firms with unquestionable merit. Just look at China Harbour Engineering Company.

    • Anonymous says:

      anon 16;12

       

      Why you have to bring China Harbour into this? can you tell us the Caymanian people what fraudulent deals China Harbour has conmitted.'

      Please stop misleadingf the Caymanian people. if China Harbour was that bad why are they being invited by the leaders of coutries,  from  the civilised world?

      Get your self educated and pass this on to our people. Bermuda made an agreement that the first 300 million dollars spent by China  development,  had to go to the  bermudians.

      Lets see which one of you hypocrites, are suggesting this? I won't hold my breath…for you black crabers.

      • Misappropriation of Assets says:

        Search "China Harbor Engineering Co in bribery scandal" on this site.

        For 19:23, with love.

      • Anonymous says:

        Can you even search for "CHEC" and "bribe"? Just in case you can't: look at:

        http://www.thestandard.com.hk/news

        this is one of many scandals they are involved in. Serious business.

        Sorry, the spam filter won't let me post the whole link.

        Or was that you Mac?

         

         

    • Anonymous says:

      Yeah! He doesnt associate with "destructive" persons.

  13. Angel of truth says:

    I do not feel sorry for Mr Ryan, i feel sorry for our  six million dollars. 

  14. Anonymous says:

    Umm, why is he personally speaking to the media about this ongoing legal action? Where is his legal counsel?

    • Anonymous says:

      Can't afford one.

    • Anonymous says:

      Steve is busy this week.

    • Anonymous says:

      Cant pay for one now lol

    • Anonymous says:

      If you think that everyone has to rely on their lawyers just to talk to the press, you’re either a child or have been watching too much US TV. Or both.

    • Attorney says:

      He can speak personally to the media all he wants.  There is nothing wrong with doing that.  In some circles in the British legal profession it was seen as poor form to speak to the media on behalf of a client at any time.  Now things have gone all Americanised and an attorney is apparently allowed to argue cases through soundbites on TV, I am beginning to think the old model was better.

    • Anonymous says:

      Can't find anyone who will take him on?

      After all lawyers like to get paid too.

    • Anonymous says:

      He no doubt had legal representation but no lawyer is going to come out with this sort of guff on his behalf, so he elects to spin direct to the Cayman public. IMHO I have seen time and again the average  American entrepreneur's approach to business ethics out here – all money in the company is mine, money can be moved to other related companies for no logical business reason, minority shareholders have no rights, creditors should expect not to be paid, sums shall be paid to me funded through minorities and shareholders (irregardless of actual business profits being made or not), losses are hidden from new lenders and investors, and so on ad nauseum.