Court greenlights Mystic Mountain assets sale
A temporary court injunction that had paused the sale of the assets of bankrupt Mystic Mountain Limited, MML, has been lifted, with receiver Wilfred Baghaloo now able to proceed with the sale of what is essentially purpose-built equipment at the Mystic Mountain Rainforest attraction in Ocho Rios.
However, the matter is not yet entirely settled as lawyers for the parties are still to put forward arguments on a request for the Supreme Court to order that any eventual sale must be get court approval as a condition to be stipulated in the sale agreement.
The majority shareholders of the MML, Rainforest Adventure Holdings Limited or RFA, lost their bid to have the September 14 injunction extended when Supreme Court judge Justice David Batts delivered a decision in the matter on November 4. The judge also set a November 11 date to hear submissions on the power of the court to order its expressed imprimatur for the sale to take effect.
The action was brought by the majority shareholders under Karibukai Limited, the immediate parent company of MML. Minority shareholders of Karibukai did not support the application for the injunction. The court has also ordered the applicants to put up security for costs, in the event that they are ordered, at the conclusion of the proceedings, to pay the legal fees of opposing attorneys in the matter. The security amounts to a total US$82,500 for the lawyers of the first and third respondents named in the matter – bondholders Sky High Holdings Limited and Baghaloo, respectively.
Trustee in bankruptcy for the MML estate, Debbie-Ann Gordon, has been named second respondent in the case. Following the temporary injunction granted by the court in response to an urgent application by lawyers for Karibukai on September 14, the matter has so far been heard over four days, between October 28 and November 4.
The assets sale is aimed at raising approximately $1.3 billion owed to the bondholders, and additional sums owed to several unsecured creditors. Following a public tender, Baghaloo announced that an unnamed firm had been selected as the preferred bidder. It emerged in the court proceedings that, at September 14, a sale agreement was about to be signed with the designated preferred bidder.
Information reaching the Financial Gleaner is that another attractions operator, Dolphin Cove Limited, is seeking to buy the Mystic Mountain assets. Lawyers from law firm Myers, Fletcher & Gordon, MF&G, have observed the court proceedings on behalf of Dolphin Cove. In previous phases of litigation pertaining to Mystic Mountain over the past two years, MF&G represented Karibukai and its majority shareholders. It is understood that the law firm recently filed a claim on the MML estate for a balance owed for legal fees.
Baghaloo, of accounting and tax advisory firm PricewaterhouseCoopers Jamaica, was appointed receiver by Sky High in February this year, after MML was certified bankrupt by the state-run Office of the Supervisor of Insolvency or OSI. Deputy Supervisor of Insolvency Fayola Evans-Roberts has been observing the court proceedings on behalf of the OSI.
Since early last year, the OSI has supervised the insolvency process, which has been rife with litigation. The insolvency proceedings started in January 2021 following the failure of MML to meet bond interest and principal payments that became due in December 2020.
Caroline Hay, KC, leads the team of lawyers representing Karibukai on behalf of law firm Ramsay and Partners; John Vassell, KC, leads Baghaloo’s representation by law firm DunnCox; Carlene Larmond, KC, heads the team from law firm Patterson Mair Hamilton representing Sky High, while the team appearing for MML Trustee Debbie-Ann Gordon is led by Dr Christopher Malcolm.