VIEWS: 2 PAGES: 2 POSTED ON: 6/4/2012
Please Reply To: Corporate Office 6280 Estate Nazareth St Thomas, 00802-1104 340-775-6550 Fax 340-775-1501 S T. T H O M A S, V I R G I N ISLANDS Mrs. Nugent-Stern Thank you for your recent correspondence to the Secret Harbour Board of Directors. We have attempted to address your questions and comments below. “1. A review of the current structure of the two governing entities. It was voted on and agreed to by the board that independent counsel would be engaged to review and advise board and the shareholders on the current structure v s. and LLC. To the best of my knowledge nothing has been done on this. The directive was immediate execution as of August 27th.” As per the Board’s 90 day update letter that went out to all owners : The board was to determine which organizational structure would best insure that the interest of the owners of SHBRA was fairly represented by the elected board of directors by potentially moving from the current LLP structure with the replacement of B&R Inc. with an LLC structure, or if an LLC structure was disadvantageous from a tax and liability standpoint, can the by-laws of the current LLP structure be modified to accomplish the wishes of SHBRA ownership. Also the owners were clear that the board of the hotel should be the same seven people who have been elected to the Condo Board. Our first meeting with a tax attorney, Marjorie Rawls is scheduled for this week with a report to be made at the November BOD meeting. Status – Open / continuing. For the record there was no formal vote taken on this at the annual owner’s meeting, however the intentions of the owners was for the Board to explore the potential tax and liability consequences to the change of governance structure and report back to the ownership. That remains our intention and we are working to that end albeit slower than any of us had anticipated. 2. An immediate review of the need for an Owner Liaison. I understand that the Board has voted to eliminate the position as of March 31, but the contract that was discussed at the shareholders terminates December 31, 2011. That date was cited more than once during that meeting. So, I am asking you to let all of the shareholders know why such an extension was voted, particularly given the perilous financial condition of the condominium and the decision that the job was unnecessary. You are correct in that the position has been eliminated and is being phased out effective Feb 28th of 2012. The feedback that we received from owners was mixed. Some owners are extremely supportive of the position and others are not. The phased approach to the position’s eventual elimination was deemed appropriate to allow for a transition period during which time the current board members would assign or assume the various oversight roles and for an orderly wind down of current activities. 3. I believe that the official record of the meeting was to be sent to the shareholders. I’ve not received one. Was that an oversight? [ Janet / Mike I think she is correct here … I do not think that the “stenographers notes “ or Meeting minutes have been distributed] Since the shareholders meeting, it’s become apparent, at least to me, that Crescent has been unreliable for financial projections and hasn’t make SHBR a priority either in Crescent’s effectiveness in bookings or management. Further, I think the board might have a serious conversation with them about our lack of confidence in Crescent and a point-by-point review with a timeline for remedy the objective. Crescent made a lot of promises and representations at the meeting; there hasn’t been evidence I’ve seen of follow up. Could you bring the shareholders up to date, please? [ Janet / Mike any comments here?] I understand that Nima has put his apartment on the market; and knowing that, asked you all a few weeks ago if there was a provision in the by-laws that required resignation from the board for any member doing such, a fairly normal practice, to avoid conflict of interest. May I have the courtesy of a response, please? Nima has indeed put his unit up for sale. A review of the by-laws indicates that one must be an owner to be a board member. Nima continues to be an owner as long as his unit remains unsold and as such remains a board member in good standing. Nima has been open and the board is fully aware of the status of Nima’s unit. Should something change the board is prepared to act appropriately. There’s a bit of a mystery surrounding Janet’s resignation and re-instatement. Could the board please report on these events clearly to the shareholders? We’re entitled to information. Janet submitted her resignation to the Board citing personal reasons. The board, well as many owners, asked Janet if she would reconsider her decision. Janet, upon reflection and the quicker than expected resolution of her personal reasons, decided she would like to remain on the Board and continue to contribute to the success of Secret Harbour. The board voted 6:1 to reinstate Janet to her Board roles as Vice President and Treasurer. Hopefully, this provides you with the information that you were seeking. 2
"To tax attorney"