The courts of Arona, Tenerife, have started to rule on various lawsuits brought by tourists visiting the island, who bought investment products related to Silverpoint Vacations SL – the failed timeshare giant that had several resorts based in Los Cristianos.
In January, the first court sentence of this kind stated that clients who were sold an investment known as the “Excel Overseas Lodging Participation Programme Scheme” should have their money returned – an amount of €70,395 – plus legal costs and interest.
The investments were sold in and signed for in Tenerife. The name of the scheme was likely confusing to many of the investors, who, at the time of making their investment, were staying in resorts managed by Excel Hotels & Resorts SL.
The investment was also given credibility by the fact that payments were made in British pounds (instalments £31,572) to Lodgequest Operations Ltd, a UK company with address in Mayfair, London. However, the money was eventually forwarded to Excel Overseas Holdings Limited – a company registered in Dubai that held most of its assets in the British Virgin Islands.
The investment sounded too good an opportunity to miss. At a time when interest rates were close to zero, investors were typically promised 6.05% fixed return per year and, after a few years, full repayment of their capital. They were led to believe that their money was financing hotel Accommodation around the world, including Thailand, the US and the UK.
Of course, it was too good to be true. Shortly after parting with their money, the investors received notice that the high court of the British Virgin Islands had appointed insolvency practitioners to liquidate the company.
Lawyers of The Nordic Consulting, a specialist legal consultancy hired by the investors, were able to link the sale of this questionable investment to two Spanish entities based in Tenerife: Silverpoint Vacations SL and Homes Under the Sun SL. The latter of these entities is still trading, and lawyers are currently working to execute the sentence against the assets of this company.
Commenting on this legal first, Ali Farhoud, CEO of The Nordic Consulting, said “This victory is great news for investors. Trying to get your money back from an offshore fiscal paradise can be a nightmare, so we are extremely happy with this result that came from following the paper trail back to Spain”.