RG Hotels and A Trust In Conflict

The effects of the bankruptcy of RG Hotels go beyond the losses faced by investors, with defects in the most dynamic stock market in Central America being identified.

Friday, December 4, 2015

The extent of the Superintendency of Securities responsibility for the negative effects of the bankruptcy of RG Hotels is one of the issues being raised by the lawyers defending foreigners who invested in the bankrupt company. Beyond the factors that the defense lawyers are using to try to recover some of the lost investments, it is clear that the rules governing trusts, debt securities and other investment instruments used in this case will be reviewed and possibly amended.

Jorge Luis Lau, a lawyer for foreign investors, told Laestrella.com.pa that "... the Superintendency of Securities (VPS) verifies form and not substance, and in the specific case of RG Hotels it did comply with the form, but trusts were not analyzed because they would have noticed inaccuracies. "

"... According to the bankruptcy lawyer, SMV holds a great deal of responsibility because its function is not limited to being only an arbitrator, it must verify more than just the formality of companies, also checking the terrain. In the view of the lawyer, they should not have transfered the shares of the trusts unitl the collateral was verified. 'The trustee should have checked before banks disbursed the money to RG Hotels and Casa de Campo'.

"... He explained that the market will be affected if the necessary corrections are not made, which could include adapting the law on trusts so that its job is to do more than saying that all is well, without having any responsibility. 'This crisis in the history of the system should be used to improve it.'"

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Security holders of the two issues by the company, who bought apartments as investments, owners of the residential complex who do not share ownership of common grounds such as the pool, and buyers of hundreds of vacation packages that can not be used, are aggrieved by the failure of a tourism and residential project of huge proportions in the Panamanian Pacific.