"The Good" and "the Bad" in the RG Hotels Drama

The end of the movie is uncertain for buyers of apartments, financial institutions, suppliers and investors, who are the creditors of more than $65 million in the tourist and residential resort in Panama.

Tuesday, December 8, 2015

Although the Panamanian real estate market had already been noticed for the relative ease with which developers fail to fulfill their promises, the RG Hotels case demonstrates the urgent need to strengthen due diligence prior to any investment in this sector.

Prensa.com reports that "...The signals coming from one side and the other have brought up several questions regarding rigor. Was RG Hotels a successful business? Why did it sell assets at half their value? Did the seller know about the trajectory of buyers? Did the buyers carry out due diligence before acquiring the company in late 2014, given it was a transaction which involved assuming millions in debts, managing a hotel, completing the construction of villas and an apartment block? "

According to "... Rugiere Galvez, who put on sale the hotel company that was built in the Panamanian Pacific, business was good. As proof he mentioned payments of all obligations, including interest on bond issues and negotiable commercial values ​​that are on the market. He recognized that despite the size of the operation, he did not know about the financial background of the investors behind Nabali Investments, but the credentials presented were sufficient, among them, the link with the company Vera Bonilla Gold Corporation, which obtained a mining concession under the government of Ricardo Martinelli.

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R.G. Hotels in Panama: A Failed Investment

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The retroactivity to July 2012 of the bankruptcy decreed in October 2015 has opened up a complicated process that does not just affect those who invested directly in the project.

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.