Twenty-five British-based investors are to sue the Irish-owned Algarve-based golf resort company Oceanico over $3 million worth of losses flowing from an investment in a North Carolina golf course.
It follows months of argument with the National Asset Management Agency, which owns Oceanico's loans, and which the investors claim is now responsible for honouring promissory contracts issued in connection with their investments by Oceanico in 2008.
Oceanico, owned by developer Gerry Fagan and business partner Simon Burgess bought the Little Rivers course in early 2008, and announced plans to build new homes on some of its 630 acres. The British investors, some of whom invested $150,000, claim they invested in a fractional-ownership scheme, but that the properties were never built. Oceanico could not be contacted for comment last night.
The investor group, led by Leeds-based Gerard Purdy, say Oceanico is no longer responding to correspondence, adding that they have instructed lawyers to begin legal action.
In a letter to Minister for Finance Michael Noonan last month, Mr Purdy said Oceanico and Nama "are treating the Little River victims in a most inhumane, sadistic and discriminatory fashion". Before the property crash, Oceanico, which owned, or planned to build golf courses in Portugal, the US, and the Azores, was reputed to have been valued at more than €2 billion. In a follow-up letter last week, Mr Purdy told Mr Noonan that Nama appears to have been given draconian powers "without transparency, accountability and responsibility". He went on: "In truth, I have found it to be secretive, uncommunicative, unreasonable and intellectually impenetrable.
'Unfortunate experience'
"It is my unfortunate experience that the Nama civil servants are incapable and/or unwilling to justify themselves and address this matter beyond stating they will not communicate with us.
"When confronted with reason and simple questions, their obfuscation and frequent silence is frankly astonishing and, for an Irishman abroad, embarrassing," Mr Purdy complained. In a letter to Nama chairman Frank Daly the investors claimed Oceanico has repeatedly said that it cannot settle the debt without the permission of Nama, while the latter refers all questions onto the company. In a note given to the investors before they signed up, Oceanico dealt with the issue of "how safe is my investment?" saying it "takes the form of a promissory contract secured against a plot of land, to build a four bedroom detached luxury golf property.
"This contract gives investors the security to have first option to purchase this property at the point of completion if necessary. The Investment contract is underwritten by Oceanico International but endorsed by the Oceanico Group. "
