Ownership of Palau Sea Passion Hotel was finally settled after the latest court order granted the current operators (Intervenors) of Sea Passion Hotel the ownership of 60% shares of the corporation they had purchased from the original owners (Defendants). Court further stopped the sale of Sea Passion shares by the Plaintiffs to satisfy Defendants debts. The court order denied the Plaintiffs their motions to remove Sea Passion Corporation from the suit and to squash the TRO and enforce judgment.
Last week the court granted the Intervenors (Mr. Shiu Hung-Chao and his family) the legal right to the 60% shares of the corporation that they had earlier purchased from the Defendants (7 of the 17 original shareholders ofSea Passion Hotel Corporation).
The contest over the ownership of Sea Passion Hotel located at Toirechull, Malakal, stemmed from an earlier case where former shareholder and incorporator of Sea Passion Corporation Mr. Chiang Shui-Lang and nine other former shareholders of Sea Passion sued seven (7) other shareholdersfor failing to pay them back for their shares that they had sold off in order to pay corporation’s debts as agreed at their shareholders meeting.The seven former shareholders failed to show and Court ruled in favor of Mr. Chiang Shui-Lang and issued an order to auction off remaining shares of Sea Passion to pay back the Plaintiffs.
Before auction took place,Intervenors (Mr. Shiu Hung-Chao and his family)filed a motion to stop the auction, claiming that they had bought the 60% shares previously held by the 7 shareholders (defendants) and that the sale of those shares would take away what they have legally purchased. Intervenors also stated that they were the purchasers of the initial 40% sold by the 10 shareholders to pay Sea Passion debts. In other words, their family now hold 100% of shares of the Sea Passion Corporation and therefore Sea Passion Hotel.
Plaintiffs (former 10 shareholders) filed a motion contesting Intervenors participation in the suit among other technicalities which they claim invalidate Intervenors claim to the shares.
Court denied plaintiffs motions saying that the sale of Sea Passion shares will affect the Intervenors and therefore they can intervene. Plaintiffs assertions that that Intervenors did not file reports with Corporate Registrar and Secured Transaction Office of their purchase were deemed failed and their motions to squash TRO and force auction of Sea Passion shares were denied.
Plaintiffs despite having won the case against the Defendants, cannot seize the only asset that the Sea Passion Corporation own, the Sea Passion Hotel, to satisfy the judgment of their case, to pay back their losses. The Defendants have sold off their shares before Plaintiffs filed the suit against them. (L.N. Reklai)