It’s been 2,211 days since Hurricane Irma destroyed Caneel Bay Resort. The property is supposed to be turned over to the National Park Service in less than a week, per Laurance Rockefeller’s wishes, yet its future continues to remain uncertain. It’s a battle that’s been playing out in federal court over in St. Thomas for the past 14 months, and it’s one that will most likely be decided at a bench trial next month.
Quick Recap (Click Here to Jump to What’s Happening Now)
Laurance Rockefeller opened Caneel Bay Resort on the same day that the Virgin Islands National Park was established in 1956. (Prior to that, the property consisted of a few cottages.) In 1983, the United States entered into an Indenture that gave most of the land on which Caneel Bay Resort sits to the United States while the Jackson Hole Preserve (a nonprofit created by Rockefeller) retained the use of the property and its improvements for a period of 40 years. That 40-year agreement expires this Saturday, and the property is supposed to be under the control of the Virgin Islands National Park beginning this Sunday. But none of this is happening due to a federal court case filed by EHI Acquisitions, LLC, the firm that currently controls the now-defunct hotel.
EHI Acquisitions filed a federal lawsuit against the United States of America in June 2022. In the lawsuit, EHI requested that the court issue a “quiet title in the Property and issue an order declaring the United States has no legal interest in the Property and that Plaintiff EHI Acquisitions, LLC owns all right, title, an interest to the Property.” EHI said it would give the property to the United States for $70 million and an agreement by the United States to absolve EHI from environmental claims related to the property. The United States said absolutely not, and now EHI believes that since it made a “good faith offer” that the United States rejected, the property should be lawfully theirs. The two sides have been battling it out in court ever since.
(A quiet title action is a special legal proceeding to determine ownership of real property.)
What’s Happening Now
The two sides are currently sparring over insurance proceeds, what constitutes a good faith offer, and who should be considered an “expert witness.”
The United States wants to know how much insurance money EHI received from hurricanes Irma and Maria. It also wants to know how those proceeds were used. EHI stated in the court documents that it was “not relevant to any claim” and that it “will not produce any such information.” The judge sided with EHI and ruled that it did not have to disclose this information.
Interesting side note: Gary Engle, a principal for EHI publicly stated in February 2019 that the insurance proceeds “would be more than a fair return for our involvement in Caneel Bay.” He continued, “I could take the money and walk away.”
But he didn’t. He chose to file a federal lawsuit demanding even more money instead.
Regarding the “good faith offer” of $70 million, both sides are arguing whether the offer was “good faith” or “fair market value.” EHI believed its offer was made in good faith while the United States is arguing that there shouldn’t be any “compensation or consideration or payment or fair market value or any value.” Point blank, they believe the property should change hands this weekend.
And lastly, they’re squabbling over an “expert witness” funded by EHI acquisitions. This “expert witness” is the man who was hired to do an appraisal of the property’s improvements to determine their fair market value. That appraisal led to EHI’s “good faith offer” of $70 million.
This is sooooo messy!
The next response deadline is this Thursday, and the bench trial is scheduled for October 16th at 9 a.m. The clock is ticking! You know I’ll keep you all posted. 🙂
Want to know more about Caneel Bay, the history of the resort, and its future should the National Park take ownership? Please check out my previous posts below:
- National Park Service Announces Plan to Rebuild Caneel Bay
- Caneel Bay: The Messy Legal Battle for Ownership
- The Future of Caneel Bay Resort is Down to Two Options: All or Nothing
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