Top 10 Costa Rica

Developer and Administrator of the largest condo hotel project in Jaco has sued its lenders

Desarrollos Naturales de Costa Rica SA (Desarrollos), the Developer and Admin of the largest luxury flagged condo hotel project under construction in Jaco Beach, Costa Rica, has sued its lender.

The Central American Bank for Economic Integration (CABEI) (in Spanish known as Banco Centroamericano de Integracion Economica (BCIE)), its lending Partner and the Trustee Banco Improsa S.A. for $120 Million in damages.

Desarrollos filed for Binding Arbitration as agreed in the loan covenants, trust agreements and subsequent amendments in the Costa Rica Chamber of Commerce. Arbitration rules require a final ruling in 155 working days.

The Luxurious Project, in the top tourist destination of Jaco Beach, one hour from the Airport utilizing a recently inaugurated new highway, is currently 84% completed and 75% sold.

The suit claims that, starting January 2009, as the project prepared to commence closings, start-up the hotel and commence repayment of construction loans, arbitrary actions of the Lenders and Trustee violated the terms of the contracts, blocking sales, imposing abusive conditions and not fulfilling their commitments. The complaint alleges the Lenders incurred in breach of contract, breach of good faith, improper control, negligence, refusal to set a release price, disregard of customer rights, and breach of fiduciary duty by the counter-parties that has caused the successful project to collapse.

The lawsuit has been filed to protect the rights of Buyers, Suppliers as well as those of the Developers. Costa Rican Civil Courts have issued preventive measures to protect the interests of all involved until the final ruling is issued.