Simpson Bay:--- Simpson Bay Resort & Marina has issued an open letter to the St. Maarten press requesting fair consideration before printing unsubstantiated accusations levied at its management company and staff. This plea is in response to the publication of false accusations made by the Board of the Tenants Association Pelican Resort Club (TAPRC), which, upon information and belief, is under the control of a man who has exhibited a history of belligerence, irrational, and frequently threatening behavior.
Current TAPRC Chairman Jeffrey Borowick, the company says, is one of the TAPRC Board members responsible, by taking a series of irresponsible decisions, for the downfall of the former Pelican Resort Club. Borowick has a long history, starting in 1997, of attempting to take over the TAPRC. His most recent attempt began in 2009; however, a number of newspaper articles and Court records from 1995 and 1996 demonstrate Mr. Borowick unsuccessfully attempted to seize control of TAPRC through an unauthorized election held without the knowledge or consent of the general Pelican membership. One court even entered an injunction ordering Borowick and others to stop representing themselves as board members. While that early attempt to grab power failed, his 2009 campaign succeeded to the detriment of the resort and every TAPRC member, in the opinion of management
Before being elected to the TAPRC Board, Borowick ran on a promise to help the resort, but at the same time took actions that – objectively speaking – harmed the resort. Borowick or his supporters repeatedly engaged prospective timeshare buyers outside the resort's sales office in order to share their grievances with management. Additionally, Borowick was often spotted approaching people on the beach in order to complain about the resort’s management. These actions, reported by both prospective buyers and existing members, caused immeasurable damage to sales and impacted the profitability and sustainability of the resort itself.
Borowick’s actions were even more egregious given that he repeatedly cited management's "poor sales performance" as one of his main complaints. Borowick attempted to shift full blame for the resort's diminishing sales onto management, failing to take his own disruptive influence or the global economic downturn into account.
Continuing to employ tactics of divisiveness, Borowick forcibly occupied the lobby at the former Pelican Marina Residences in April 2009, holding a “meeting” where he publicly threatened to "go after" existing board members and openly discussed his idea that the resort should stop paying its loans. His statements foreshadowed the TAPRC Board’s later decision, after Borowick was elected, to simply stop paying loans and mortgages as an apparent “hardball” negotiation tactic – a decision that backfired and ultimately lead to the resort’s foreclosure.
The previous TAPRC Board reprimanded Borowick for these actions as well as for threatening fellow timeshare members and barging into private work areas in order to assail the resort staff. In some instances, these actions escalated to physical altercations.
Despite the reprimand, Borowick continued to attack management and the previous TAPRC Board in communications with numerous timeshare members even as he ran for a TAPRC Board position. His response to anyone who disagreed with him was to resort to juvenile name-calling and bullying tactics. For example, in a letter to one member who questioned Borowick's experience running a resort (after Borowick claimed he could do so better than the daily management), Borowick wrote to his fellow timeshare member: "try thinking for at least ten seconds before you start pecking the keyboard with your nose. What do you do for a living? I'm actually interested to find out. Frustrated clerk, wanna be water girl, please tell me?" Borowick concluded his 456-word response to this concerned timeshare member's 47-word inquiry by claiming to be "too busy to waste their time with toads like you." He also attacked current Treasurer Bob Ryan, stating the “only reason Ryan is where he is, is because of his relationship with Sutton, Corso and Royal Resorts.” Ironically, Borowick and Ryan now work together side-by-side on the present Board – just one example of Borowick’s inconsistency.
Despite all of his divisive and damaging behavior, Borowick and a coalition of his followers and other like-minded individuals managed to get Borowick elected to the TAPRC Board. Once Borowick was finally elected, he made statements and recommendations that suggested he was oblivious to the wants and needs of resort guests and woefully unable or unwilling to understand how to run a timeshare resort. For example, at one TAPRC Board meeting, Borowick proposed that guests bring their own toilet paper as a cost-cutting measure – an irrational strategy that is completely at odds with the desires of the average resort guest.
More importantly, after Borowick’s election the TAPRC Board began to implement aggressive spending cuts – a worthwhile goal – but at the same time enacted irrational policies that reduced income while at the same time spending hundreds of thousands of dollars on items that were not part of the resort budget. These policies seem to be tied to Borowick’s agenda, as opposed to being in the best interest of the resort. For example, many of the TAPRC Board’s unbudgeted expenditures seemed to be in furtherance of Borowick’s often stated goal of getting rid of the management company, Royal Resorts. The main expenses, for attorney’s fees and professional fees, among other items, consumed hundreds of thousands of dollars earmarked for resort operations, and seemed focused on an attempt to pressure both the management company and the mortgage lender into renegotiation.
Additionally, the Board made poor fiscal and business decisions, such as the decision to unnecessarily spend a huge amount of money on a hurricane insurance policy that had a $1,000,000 deductible, and as a practical matter would have placed a huge burden on the resort members before it paid out a penny. Ironically, these expenditures came while Borowick and the TAPRC Board were telling everyone who would listen that the resort needed to rein in spending. Ultimately, the ill advised spending decisions of the TAPRC Board, whether simply based on bad business sense or a desire to follow the Borowick agenda, made it impossible for the resort to cover its basic expenses, only to once again blame management for results caused primarily by its own irresponsible policies.
It was apparently not enough, however, for the TAPRC Board to simply spend wildly. The TAPRC Board also took actions that served to eliminate several sources of revenue. Borowick, prior to his election, had demanded that the resort no longer borrow money, again ignoring the financial realities of the resort and of the timeshare business in general. Once Borowick was elected, the TAPRC Board suddenly adopted a “no more loans” policy, and then refused to pay certain loans that were normally used to provide financing for timeshare purchases and to cover operating shortfalls.
Failing to pay the financing loan caused a significant reduction in resort sales. Because almost half of all timeshare purchasers do not have the money to immediately pay for their unit in full, the ability to finance a purchase over time is essential to sales. When the TAPRC Board was informed that their actions would eliminate this financing ability, Borowick suggested that sales staff should instead "focus on all cash sales deals" – a preposterous notion that effectively eliminated approximately 50% of possible sales. This action showed once again that Borowick and the TAPRC Board seemed to not fully understand what was required to run a successful timeshare resort.
The failure to pay the operating loan also had a direct negative effect on resort operations, and once again highlighted that Borowick and the TAPRC Board were willing to make irresponsible and unreasonable fiscal and business decisions to the detriment of the members. The current problems with the Pelican Capital Improvement Program, or PCIP program, highlights how the TAPRC Board’s insistence on an irresponsible fiscal policy previously championed by Borowick led to severe negative consequences.
Contrary to what was published in multiple St. Maarten news outlets on April 8, the PCIP program was managed and directed by the TAPRC Board. The TAPRC Board, and in particular immediate past Chairperson Christine Schlunz, explicitly determined approval status for PCIP loans, rollovers, interest rates, and the like. In fact, former TAPRC Board members Schlunz, Roy Martin and Bob Ryan even participated as investors in the PCIP program. The St. Maarten public will not be surprised to learn that, unlike many others, these TAPRC Board members received 100% of their investments back, either in cash or in trade for timeshare intervals.
. The current problems with the PCIP program can be directly traced to the actions of the current TAPRC Board. As previously detailed, the TAPRC Board authorized hundreds of thousands of dollars of unbudgeted spending. Additionally, the TAPRC Board eliminated revenue streams that would have brought much-needed operating capital to the resort. The TAPRC Board’s decision to increase spending and cut revenue, not surprisingly, resulted in a revenue shortfall that left the resort far short of the funds it needed to continue to operate through the end of the year. The resort regularly ran out of funds before the end of the year – it had done so in nearly every year since TAPRC had taken the resort over. However, as the TAPRC Board ordered management not to pay amounts due on a previous operations loan, the difference in 2010 was that Borowick and the TAPRC Board had also eliminated the resort’s ability to borrow funds to cover financial shortfalls. By intentionally forcing the resort to default on its loans, the TAPRC Board effectively eliminated the last possible source of emergency revenue outside of a special assessment, leaving the resort to limp along on the scant funds and revenue streams left available. As Borowick had long advocated eliminating loans prior to his election to the TAPRC Board, in retrospect, the TAPRC Board’s actions – while foolish – are not terribly surprising.
After taking action to reduce revenue, spending the money earmarked for resort operations on other things, and eliminating the possibility of a loan to help with the cash shortage, the TAPRC Board then made the incredible demand that management pay all amounts due under the PCIP program. Management could not comply with this directive as it would have forced the resort into bankruptcy and violated management’s legal duties. Checks paid to resort employees would have bounced and the resort would have been put under the control of the court and bankruptcy trustees. Long-time resort members should recall that the last bankruptcy involving the resort took nearly eight years to resolve, and resulted in extremely high special assessments just to pay the bankruptcy trustees.
The fact that the past and present TAPRC Boards controlled the PCIP program and made key decisions regarding that program is well supported by a mountain of documentation. By seeming to follow ill-advised policies that had been previously championed by Borowick, and by engaging in other irresponsible fiscal and business behavior, the TAPRC Board was responsible for making it impossible for the PCIP investors to be paid.
As if the foregoing were not enough, the current TAPRC Board has also appropriated all of the resort’s moveable property – the beds, pool chairs, and linens, for example – without authorization, by purporting taking title of this property from the timeshare members and giving it all to a foundation in which Borowick is a Board Member . This foundation, supposedly formed to represent the interests of third parties, is not accountable to the TAPRC members and does not itself have any members.
Numerous excuses have been given for this action. The TAPRC Board claimed the supposed transfer was to protect TAPRC members, although it did not bother to explain how. TAPRC’s attorney, Gerrit Van Giffen, later admitted to the media that the moveable property was transferred to ensure that litigation would continue into the future, even if the present TAPRC Board is democratically voted out by fed-up Simpson Bay Resort timeshare members.
Most recently, the TAPRC Board claimed that the property was taken from the TAPRC members to guarantee repayment of the PCIP debts – a questionable assertion given that by moving these assets away, the TAPRC Board actually depleted the assets of the company that owes money to the PCIP creditors, leaving little recourse for the creditors should Borowick and the foundation use the movable property to fund further litigation.
Additionally, the TAPRC Board effectively admits that it took property belonging to the entire TAPRC membership in a misguided effort to “protect” the PCIP participants, despite the fact that only 2% of the TAPRC members are involved in the PCIP program. Whether Borowick has some hand in this action is unknown; however, the fact that he is the sole TAPRC Board Member who also sits on the foundation board cannot simply be a coincidence.
As has been clearly demonstrated the TAPRC Board, following a number of positions previously promoted by Borowick, has done untold damage to the resort, in the opinion of management. They continue to damage the resort by continuing to release false and malicious statements and by restating claims that have already been rejected in court. These statements, seemingly made with Borowick and the TAPRC Board's full knowledge as recently as April 2011, appear to have been intended to mislead the press and public. Additionally, the TAPRC Board’s meddling in the daily management's negotiations with the WIFOL labor union caused a significant delay in the resort's reopening following a brief labor-related closure, yet another absurdity considering Borowick was one of the most vocal proponents of Union labor cuts in TAPRC history. It is only reasonable to expect that they will continue on their divisive and harmful course until stopped by legal actions or by a vote of fed-up TAPRC members.
The new owner of the resort, Simpson Bay Resort Owner Company B.V. (SBROC), will not stand idle and watch the TAPRC Board destroy the resort to the detriment of the TAPRC members it is supposed to represent. SBROC is in the process of initiating legal action against the TAPRC Board and its individual Board Members, and is considering similar action against other co-conspirators who have knowingly helped Borowick and the TAPRC Board spread damaging misinformation and filed misleading affidavits “pointing the finger” at others in an apparent attempt to protect themselves from liability.
This legal process will take some time, however. In the meantime, the continued publicity given to Borowick and the TAPRC Board in St. Maarten's press has been extremely disruptive and damaging to the resort and to St. Maarten's image of as a vacation destination.
Simpson Bay Resort Owner Company B.V. is confident that all of Borowick and the TAPRC Board’s negative propaganda will be successfully challenged in court, and that the true story will be revealed once and for all.
“Simpson Bay is willing to make official documentation available to any news agency which extends it the courtesy of reaching out to verify the factual nature of any accusations levied against the resort. The news media can then use its own judgment in weighing this documentation against the unsubstantiated allegations made against management to date, said attorney Jairo Bloem”.