Miami, Florida, May 29, 2009 – An Involuntary Petition for Bankruptcy was filed on May 27, 2009 in the United States Bankruptcy Court of the Southern District of Florida against Royal West Properties, Inc., a real estate investment company based in Florida. As recently as May 27, 2009, Royal West reported debts to individual investors in the amount of approximately 44 million dollars and an inability to pay its obligations as they become due.
In this rare circumstance, the Royal West investors may act as creditors and petition the court to have Royal West declared insolvent. If the court grants relief, as the bankruptcy occurs without the debtor’s consent, this is termed an “involuntary bankruptcy.” Involuntary bankruptcies occur only under Chapters 7 (liquidation) and 11 (reorganization) of the Bankruptcy Code.
The Petition specifically states that the petitioning creditors reserve the right to assert claims for fraud related to their investments and that the documents at issue were instrumental in perpetuating the fraud.
“We are moving forward with the Involuntary Petition to try to recoup the monies owed to Royal West’s investors in an orderly way which is fair to all of the creditors” said Peter Valori, of Damian & Valori, attorney for the petitioners. “The investors have not been paid the promised interest since January and the Company has not presented a concrete plan or solution to the problem.”
Royal West Properties, Inc. was established in 1982 by Gaston E. Cantens and his wife Teresita. The company primarily focuses on the promotion and sale of property (vacant lots) in Florida. Initially, the company focused on the Ft. Myers and Cape Coral area, but it later expanded and offered properties in Lehigh Acres (Lee County) and Port Charlotte (Charlotte County). The company is headquartered in Miami, Florida and has additional offices in Cape Coral (FL), New York, Colombia and Venezuela.
Many of the investors have known Mr. Cantens for years since the time they attended Belen high school in Cuba in the 1950’s and they trusted him with their life savings. Many of the investors personally invested in excess of one million dollars each.
Unfortunately, in December 2008, the payments on the notes suddenly stopped. Mr. Cantens informed the investors that Royal West could no longer make the required payments. Indeed, investors were still providing money to Royal West as late as January of 2009, a time when investors were no longer receiving interest and other investors were told that no further interest payments would be made.
“This type of litigation is becoming more prevalent due to the rapid changes in the real estate and financial markets,” said Kenneth Dante Murena, attorney for the petitioners and Damian & Valori’s Bankruptcy Litigation Partner. “We hope that we can place the creditors in a position to obtain return of as much of their investments as possible.”