The chapter 11 bankruptcy protection filed late last week on behalf of Wintdots Development LLC could spell the end to its plans for a major development in conjunction with the St. Thomas tramway, but it does not affect the existing operation.
Benjamin Currence, the St. Thomas attorney who represented Wintdots in the bankruptcy action, said Wednesday the tramway is owned by a separate entity, Tramcon Inc. Wintdots owns property near the tram, but not the property that houses the tramway, nor the tramway operation.
The tram, which regularly rides passengers up Flag Hill to the bar and shops at Paradise Point high above the Havensight area, is a popular St. Thomas tourist attraction.
Listed as members of Wintdots on its bankruptcy filing are Dorothy Elskoe, her son Glenn Elskoe, and Dean Luke, a former commissioner of Property and Procurement.
The largest creditor listed is Kennedy Funding Inc. for $9.6 million. Kennedy and another creditor, Marvin and Evelyn Freund, Trustees for the Evelyn Freund Trust, hold secured claims.
Wintdots borrowed $6.5 million through Kennedy Funding in 2008. When Wintdots fell in arrears, Kennedy filed suit and the Evelyn Freund Trust, another creditor, became a party to that suit. In a settlement agreement in April 2011, Wintdots agreed to repay Kennedy $9.6 million (the original loan, plus interest and expenses and attorneys fees) and also to repay approximately $250,000 to the Trust ($225,000 principal, plus interest and expenses including attorney’s fees.) Final payment had been due last November.
Other creditors listed in the bankruptcy filing include Banco Popular de Puerto Rico, $300,000; Turner Construction, $251,542; Jessica Dinisio, (an employee or former employee) $101,006.40; Tracy Wayman, (an employee or former employee) $94,310.40; Broadway Capital LLC of New York, $50,000; and Fenton Enterprises, $38,500.
The company lists more than $86,000 owed to the Virgin Islands government in various taxes, including withholding taxes.
The government involvement could have been greater, if it hadn’t done its due diligence.
Back in 2009, the Legislature passed a bill authorizing the Public Finance Authority to guarantee up to $50 million in loans to Wintdots and a year later, the company asked for $49.5 million. Published reports at the time quoted Luke as saying the company had paid $2.6 million to Peter White Management to partner with it in Paradise Point and had wanted to use some of a new loan to buy them out, as well as to renovate and upgrade the property’s bar, restaurant and shops by adding a number of improvements including a geothermal plant, a 40-room boutique hotel, 80 timeshare units and 10 hotel condominium units. The company also planned to use some of the proposed loan to pay off existing debt.
The PFA stopped far short of the request, but did issue a conditional letter of support for a $9.4 million loan for repairs and renovations. That support was subject to review and approval, and specific due diligence criteria. “None of that ever happened,” said Angel Dawson, speaking for the PFA Tuesday. So the government did not get involved in backing any financing for Wintdots.
(Editor’s Note: the original version of this story incorrectly suggested that the Wintdots bankruptcy might affect the tramway.)