Stake Bank Ltd. in Receivership, Atlantic Bank Ltd. Taken Possession

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News Five has confirmed that Stake Bank Enterprise Limited is in receivership. Atlantic Bank Limited has taken possession of the company’s assets as of Thursday, March 14th. Marlowe Neal of Neal & Associates Advisory Services Ltd. is the receiver.

 

In February 2019, ground was broken for Stake Bank Enterprise Limited with the intention of embarking on a tourism development project on its twenty-five-acre island.

Back then, Chairman of the Feinstein Group, Michael Feinstein, told the press that “The bankers for this project is being led by the Atlantic Bank group.  The Atlantic Bank is the lead organizer for the money for this project which is sixty-seven million dollars on the island and a total of about eighty-two million dollars before this project is done.”

However, fast forward five years, and the once-barren island off the coast of Belize City has transformed into a partially developed construction site yet remains unfinished despite significant efforts and investments. The project, also known as Port Coral, aimed to create a state-of-the-art cruise ship docking facility and tourism hub.

Stake Bank Enterprise Ltd., led by Michael Feinstein, secured a definitive agreement with the Government of Belize in August 2017. This agreement granted the company permission to build and operate the Stake Bank project for a fixed 25-year term. It preceded the enactment of the Stake Bank Cruise Docking Facility Development Act in January 2018.

The Claim

The project faced challenges, including legal disputes and controversies surrounding the approval of competing cruise ship docking facilities in Belize District, notably the Port of Magical Belize. Feinstein and Stake Bank initiated legal proceedings against the government and Portico Enterprises Limited, seeking damages for alleged breaches of the definitive agreement and hindrances to project progress.

Feinstein claims that news of Portico’s memorandum hindered negotiations and halted the construction of the Stake Bank Project.

 

The Government of Belize further exacerbated the situation by entering into a definitive agreement with Portico in October 2020, granting a thirty-year term for the Port of Magical Belize along with extensive approving rights, tax benefits, and duty concessions unprecedented for any other investor or developer. Stake Bank contends that these breaches have caused significant loss and damage, resulting in a six-year stall of the project.

They claim projected net revenue losses of one hundred forty-eight million, four hundred thirty-four thousand, and four hundred four Belize dollars, along with an additional thirty million Belize dollars in interest incurred during this period.

What is a Receivership?

Receivership serves as a debt restructuring mechanism aimed at steering a company away from bankruptcy or liquidation while legal proceedings unfold. During this interim period, a neutral and legally appointed professional, known as a receiver, assumes control over the company’s operations, finances, and assets. The primary objective of the receiver is to evaluate the company’s sustainability, creditor interests, and outstanding debts, subsequently devising a repayment strategy that mitigates the need for total liquidation.