Four Seasons Nevis Called a National Emergency
The closure of the Four Seasons Nevis and the involuntary chapter 11 bankruptcy filed against it has been declared a "national emergency" by the government of the island of Nevis. The image on the right shows the devastation the hurricane wreaked on a beach at the resort.
Once considered one of the best hotels in the entire Caribbean, the Four Seasons Nevis was severely damaged by Hurricane Omar in October 2008 and has been closed ever since. The Four Seasons offered 196 spacious, luxurious guest rooms and suites in 12 two-story guest buildings just steps from the beach and exclusive two- to six- bedroom residence villas. The privately-owned self-sufficient estate home accommodations as well as a 18-hole golf course designed by Robert Trent Jones II, were not damaged by the hurricane and are fully operational.
This week, the Sovereign Government of the Island Nation of Nevis filed a motion asking the Delaware bankruptcy court to abstain from hearing the bankruptcy case filed against the hotel's owner, Hotel Equity Fund V, LLC. The Nevis government believes the resort's continuing closure, and the potential impediment to the resort's reopening resulting from the bankruptcy filing, constitutes a "national emergency" for the island, as the Four Seasons resort is the island's largest employer.
Gallery: Four Seasons Nevis
When the Four Seasons Nevis opened on Valentine's Day 1991, it was the first resort in the Caribbean to receive a Five Diamond rating. The Five Diamond rating is the highest level that AAA awards to restaurants and lodgings.
The government of Nevis, along with and the Four Seasons Resort Estates Homeowners Association Limited, filed a motion out of concern for "international comity". The Government of Nevis wants the involuntary petition dismissed so that the foreclosure can occur.
In the court filing, the Government of Nevis called the situation the result of "a high-stakes game of 'chicken' which is being played not only with the future of the resort, but the future of Nevis itself". What has the government and homeowners so upset is that reconstruction work has had to stop while an inter-creditor dispute is being prepared for resolution in Delaware courts. This delay is jeopardizing the resort's scheduled November 1, 2010 reopening which may compromise the island's winter travel season. The Nevis government believes construction must commence by May 1. Further complicating matters, the Government of Nevis and the homeowners are concerned that insurance proceeds related to business interruption are being jeopardized.
The resort is is indirectly owned by Maritz Wolff & Co. which owns the property through a Delaware single purpose entity called Hotel Equity Fund V. The Four Seasons Hotels and Resorts manages and operates the resort. The motion claims that Maritz Wolff was already in default of a $126 million loan that was taken out. According to the court document, approximately $80 million of the loan was used to pay off the previous lender with the balance believed to have been distributed to HEF's owners and their partners. After Hurricane Omar, the resort owners, who had under-insured the resort and already defaulted on the loans, simply walked away, according to the motion.
Wachovia/Wells Fargo, which is servicing the loan (a complex commercial backed security), has been managing all reconstruction efforts while twice attempting to foreclose on the property. The second foreclosure attempt was scheduled to occur March 25th, but one week earlier, Capstead Mortgage Corp., which is one of the holders of the loan, blocked the sale by filing an involuntary chapter 11 petition in the Delaware bankruptcy court. Because of an automatic stay, Wells Fargo was not able to foreclose on the resort and halted all reconstruction efforts.
Should the property reopen as planned on November 1st, standard room nightly rates will start at $395 with two-bedroom villas priced at $1,300 per night. For updates on the resort's re-opening date and availability, visit the hotel's website.