Cap Cana problems

[iluvdr]

Legal Opinion

Follows is my lawyers answer to the situation;


Dear Sir:

I understand your concern. Please note that "XXX" has a registered right on the real estate property ?which is uncontested, unlimited and very protected under Dominican law-, and no matter what happens with the project, this will not vary. The payments you have already made ?with regards to your other purchase- are based on a contract that involves Corporaci?n Hotelera del Mar, S. A. (CHM), which is different than Cap Cana, S. A., and therefore any insolvency problems of Cap Cana, S. A. will not affect your legal situation with CHM.

What remains unsure is the commercial value of such property if Cap Cana?s creditors where to foreclose on the project. Unfortunately I cannot give you any reassurance on this regard. This is because we don?t know if project will continue to be administrated or managed as before or even if the property will no longer be appealing to future investors. If the project where to go bankrupt, all the assets that are in Cap Cana, S. A.?s name will be liquidated and distributed among all creditors and the project as an entity will probably disappear, but you will remain with the property rights of your land and units.


Any feedback???

 

[AK74]

Follows is my lawyers answer to the situation;


Dear Sir:

I understand your concern. Please note that "XXX" has a registered right on the real estate property ?which is uncontested, unlimited and very protected under Dominican law-, and no matter what happens with the project, this will not vary. The payments you have already made ?with regards to your other purchase- are based on a contract that involves Corporaci?n Hotelera del Mar, S. A. (CHM), which is different than Cap Cana, S. A., and therefore any insolvency problems of Cap Cana, S. A. will not affect your legal situation with CHM.

What remains unsure is the commercial value of such property if Cap Cana?s creditors where to foreclose on the project. Unfortunately I cannot give you any reassurance on this regard. This is because we don?t know if project will continue to be administrated or managed as before or even if the property will no longer be appealing to future investors. If the project where to go bankrupt, all the assets that are in Cap Cana, S. A.?s name will be liquidated and distributed among all creditors and the project as an entity will probably disappear, but you will remain with the property rights of your land and units.


Any feedback???

We told you that.

 

[Conchman]

In my opinion, even if the Cap Cana company is liquidated (which I doubt will happen) there will be another company taking its place, making developments in the area, but most likely not on the grand scale as orginally envisioned by Cap Cana. Remember, some or a lot of infrastructure has already been built (roads, utilities, hotels, golf courses, etc).

Property values may decline a bit in the short term but the long term future for property ownership there is very good, the whole Punta Cana/Bavaro area is, as another poster said, enjoying a 'boom.'

 

[Davek]

Take a look at this news article It will explain the Cap Cana Layoffs
Lehman's fall stalls Dominican resort; 500 axed - Forbes.com

 

[Lambada]

Take a look at this news article It will explain the Cap Cana Layoffs
Lehman's fall stalls Dominican resort; 500 axed - Forbes.com

Er........already posted on this thread 5 days ago - see post 22.

INO.com News - Lehman's fall stalls Dominican resort; 500 axed

I see the Cap Cana website hasn't been 'updated'.

 

[MikeFisher]

yeap Ginnie,
looks like nobody expects to get paid for a job there, so not even the website manager stays on the job, ha ha.
to the post above about the value of cap cana properties and punta cana bavaro properties in general.
yes on one side, beachfront/oceanfront property will always have it's great value over here, it is actually nearly impossible to purchase a oceanfront property/villa right away, those areas are mostly sold and rarely resold.
No on the other side, because the cap cana properties been compared to other punta cana properties on the ocean front very high overpriced because of the exclusive fancy cap cana project with the promises of an infrastructure which punta cana in general doesn't have. properties been sold valueing on the "fact"-promises/expectations of several world class golf courses in the same huge residence, several running top marinas operating there aso aso aso.
if the cap cana project get's bankrupt it is not very likely that one single company/administration will be able to overtake the whole thing and run it like planned/build it like planned/visioned. we are talking about a $$$ 1 Billion dollar project, not some lumpy hundred millions of dollars for the construction of a new hotel. so that visionary high risk investment program falling apart would mean that many things will not get finished like promised/expected. without all roads done/shops builded/marinas running/top world class golf courses bringing in top bucks spending high level investors, without all that done and proper administrated i would say that a i.e. 2000 squaremeters beachfront property in cap cana would not be worth more than any 2000 squaremeters beachfront property at any other location in punta cana bavaro. and that would be a very significant drop from paid prices compared to by then real value. without the cap cana project as a whole project finished it is much too far away located from the center punta cana to be named a place with infrastructure.
an other question is:
who will run the huge amount of security guards to keep the huge residence save in case the administration runs bankrupt?
there security persons number out easily the number of police and military forces all together in the punta cana area, a very significant point in my opinion in case they get send home or decide themselves to go home for leak of payments.
Mike

 

[NALs]

In my opinion, even if the Cap Cana company is liquidated (which I doubt will happen) there will be another company taking its place, making developments in the area, but most likely not on the grand scale as orginally envisioned by Cap Cana. Remember, some or a lot of infrastructure has already been built (roads, utilities, hotels, golf courses, etc).

Property values may decline a bit in the short term but the long term future for property ownership there is very good, the whole Punta Cana/Bavaro area is, as another poster said, enjoying a 'boom.'

I don't think Cap Cana will be liquidated either, in fact the company is financially strong according to Ellis P?rez. They are diligently working to resolve the issue as soon as possible.

Also, despite Cap Cana having fired 500 employees as all the newspapers have made it clear, the same newspapers have not made it clear that it still has 1,300 on its payroll working as usual. Read on:

"La empresa Cap Cana, que desarrolla uno de los mas grandes proyectos inmobiliarios para el turismo de altos ingresos en el este del pa?s, cuenta con una gran solid?z econ?mica, con un capital superior a los tres mil millones de d?lares, seg?n afirm? su vocero, Ellis P?rez.

Lo que ocurre es que Cap Cana est? atravesando por un momento de falta de liquidez, debido a que no pudo concluir un empr?stito de 250 millones de d?lares que ten?a firmado con la empresa de inversiones Lehman Brothers, que recientemente quebr? en Nueva York, indic? Ellis P?rez.

La situaci?n ha obligado a despedir a 500 empleados, aunque otros 1,300 siguen laborando normalmente, dijo Ellis P?rez, se?alando que se espera resolver el problema r?pidamente."

source

-NALs

 

[MikeFisher]

with a capital of 3000Millions US$ a missing contract over 250 Mio's, of which just 50Mio's been missing to be paid til now, there should not be any problem or such.
and there should not be any legal reason to fire nearly 1/3 of the employess due to a financial crisis. we will see soon what's coming up on that project. would be sad to see that former beautiful Juanillo beach gone just for a higher game of some financial thieves.
Mike

 

[La Mariposa]

with a capital of 3000Millions US$ a missing contract over 250 Mio's, of which just 50Mio's been missing to be paid til now, there should not be any problem or such.
and there should not be any legal reason to fire nearly 1/3 of the employess due to a financial crisis. we will see soon what's coming up on that project. would be sad to see that former beautiful Juanillo beach gone just for a higher game of some financial thieves.
Mike

You took the words out of my mouth

 

[Conchman]

is this beach part of the Cap Cana property?

 

[Robert]

is this beach part of the Cap Cana property?

It's within the property.

They moved the fisherman that used the beach for many years to a village built by Cap Cana.

They don't own the beach as all beaches are public. You can get access via the sea. It looks like they have permission to build within the 60M high tide rule.

When I was last in Cap Cana, they were also building artificial beaches with sand. No idea how the law looks upon man made beaches

 

[Hillbilly]

Regarding the number of dismissals, I was told this weekend by a manufacturer in St Dgo that 1950 were let go out in Cap Cana....

HB

 

[NALs]

with a capital of 3000Millions US$ a missing contract over 250 Mio's, of which just 50Mio's been missing to be paid til now, there should not be any problem or such.
and there should not be any legal reason to fire nearly 1/3 of the employess due to a financial crisis. we will see soon what's coming up on that project. would be sad to see that former beautiful Juanillo beach gone just for a higher game of some financial thieves.
Mike

The employees that were fired was due to the financial restructuring that Cap Cana has been going through for some time (way before the bank failed in NYC). Such restructuring are quite normal for big companies such as Cap Cana, so this is no major issue. In fact, most large businesses go through restructuring every few years, its no big deal.

As part of the restructuring, the Cap Cana company is basically outsourcing much of its construction labor force to cut costs. Because of this, they fired the workers whose area of expertise were being outsourced and they are selling all construction machinery owned by Cap Cana.

At the same time, they just signed an agreement with a company that specializes in the area of expertise of the workers who were fired (this is the outsourcing company), such company is able to give Cap Cana a construction labor force with machinery for a fraction of the cost Cap Cana was incurring by doing everything themselves. And the best part is that Cap Cana doesn't need to pay for the training or benefits to such employees since they don't work for Cap Cana, they work for outsourced company who pays for all of that. Its also a wise move in terms of publicity since Cap Cana can get the work that it needs to be done by contracting the specialized company when it needs it, and then when they don't need it; Cap Cana can end the agree and not a single newspaper anywhere will be able to say that Cap Cana fired employees because they never worked for Cap Cana from the start.

Again, outsourcing is a normal and cost effective business practice every time a large corporation goes through financial restructuring.

Its much cheaper to develop relationships with various companies that are highly specialized in one function needed in a project than for one company to do everything.

Like everything else in life, the jack of all trades is rarely good at anything it does and this reflects itself in higher costs. Specialization leads to higher quality results with lower costs.

-NALs

 

[Flash]

Cap Cana and Ellis P?rez have no choice but to claim that all is fine, and that by restructuring they will get over the short term financial difficulty. However this does not seem to be the case. Mike Fisher is correct, without the promised infrastructure and amenities current prices will not hold.

What about the super exclusive lots on the cliff, Trump at the Farallon ? sold at over $500/m2 with prices from $6M to $12M; With no further development and with Trump possibly walking away (no comment from Cap Cana group) they will become just empty lots with nice view.

 

[BF1]

Yesterday a supplier of Cap Cana, told me they are receiving vehicles as a payment for unpaid jobs. I hope the best for Cap Cana but things doesn't looks good....

 

[Chirimoya]

Yes, I heard that too.

 

[MikeFisher]

by law i would still mean our beaches are public, ha ha ha
but on some to try to access 'em would only be possible with a good armed crowd of Marines, lol.
Juanillo is today located in the middle of cap cana, yeap.
Mike

 

[La Mariposa]

by law i would still mean our beaches are public, ha ha ha
but on some to try to access 'em would only be possible with a good armed crowd of Marines, lol.
Juanillo is today located in the middle of cap cana, yeap.
Mike

Not as beautiful as it used to be though

 

[MikeFisher]

yeap,
money can not buy nature's beauty.
heck, look on all those chirurgic(sp??) junkies,
money can not buy any beauty, ha ha.
Mike

 

[Lambada]

Fitch Downgrades $250MM Cap Cana, S.A's Sr Secured Notes due 2013: Financial News - Yahoo! Finance