Hyatt Regency repairs still 'on hold'

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Cayman Net News, Grand Cayman

Mar. 24--All the formerly disputed insurance claims blamed for the delay in repairs to the Hyatt Regency Resort on Seven Mile Beach have been paid, except one.

Still dragging behind in its decision to pay the claim or reinstate the hotel -- nearly six years after Hurricane Ivan demolished the centerpiece building -- is Houston Casualty Company, according to the manager of the property, Bill Powers.

No other deluxe resort in the Cayman Islands has as many visible scars from Hurricane Ivan, which struck in 2004, as the once-stylish, elegant Hyatt Regency.

Set directly on the sands of Seven Mile Beach, this property originated in the 1980s as part of the sprawling 89-acre Britannia Resort development, a US$80-million resort that reigned for several years as the largest, most elegant hotel in the Cayman Islands.

In 2004, Hurricane Ivan demolished the part of the resort that lay inland from the beach, and spared the "beach suites," which lie directly beside the sea and have been refurbished and renamed the Cayman Islands Beach Suites.

Though they include a health club and spa, two restaurants, two swimming pools, a branch of Red Sail Sports, and a Jack Nicklaus-designed, nine-hole golf course, it is only a whisper of the resort's former glory.

The showcase building, which formerly housed 230 upscale accommodations, still languishes, hidden from view of the Beach Suite guests, but in full view of residents who travel the Esterley Tibbets highway that now truncates the property.

Real estate agents have complained that the derelict building negatively impacts the value of nearby Britannia sites, which must be sold at discounted prices.

Mr Asif Bhatia, the owner of the Hyatt who resides in London, has been in a legal battle with his insurers over a reported $50 million-plus claim, alleging that the insurance firm offered considerably less than this sum, which he refused to accept, leaving the prime hotel site in ruins.

The first action taken by the hotel was in June 2005, followed in August by a request for a Summary Judgment, which was heard by Justice Alexander Henderson in September. In November 2005, Judge Henderson rejected the hotel's application, but the hotel did not follow through with its appeal, according to Clerk of the Courk Valdis Foldats.

A summary judgment can be applied for by either party, and is a request to promptly and expeditiously dispose of a case without a trial. It is used when there is no dispute as to the material facts of the case and a party is entitled to judgment as a matter of law.

The property manager said that the insurance company agreed in 2008 to pay the disputed claim to the limits of the policy, but has since reneged on its claim. The hotel owner has begun a reassessment of the property to determine his course of action.

"However, the hotel owner is still waiting for Houston Casualty Company to decide whether it will pay for the damage caused by Hurricane Ivan or, at its option, reinstate the hotel in accordance with the terms of the insurance policy," he said, "because there is a risk that no matter how sensible the option the owner picks, Houston Casualty Company may subsequently seek to argue that it would have been better to do something else instead."

The owner is concerned that if he decides to tear down the damaged buildings to rebuild, that Houston Casualty Company may subsequently "seek to argue" that it would have been better instead to repair the existing shell.

"The hotel owner is particularly wary about Houston Casualty Company's intentions, as Houston Casualty Company has already sought to wrongly void the insurance policy on false pretences in a desperate ploy," said Mr Powers, "concocted just a few days before the hearing, to escape Summary Judgment when Houston Casualty Company had no genuine defence, as both parties' real figures put the loss at well above Houston Casualty Company's policy limit."

All 15 of the other insurers have paid for damages according to their policies, said Mr Powers.

"Houston Casualty Company has still not paid a single cent under the same policy, despite its clear obligation to either pay for the damage caused by Hurricane Ivan or, at its option, to reinstate the hotel," he said.

Premier McKeeva Bush threatened action in July 2009 against the hotel owner if he did not repair the property by the end of 2009, but no action was taken. Government can force a sale of the property, should it be determined that the property has been abandoned; however, Mr Powers said that the owner is simply waiting for the insurance company to make up its mind.

"There is a lot more at stake here than the reinstatement of our hotel since, as previously stated," said Mr Powers, "given Cayman is in an area which is prone to hurricanes, the failure of insurance companies to honor their obligations under insurance policies and the ability/inability of the local judiciary to properly and promptly deal with disputes relating to insurance claims will be key issues for most local citizens and businesses on the Island as well as the Sister Islands."

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