Howard Johnson Hotel Director in Curaçao Held Personally Liable for 400,000 Guilder Debt

WILLEMSTAD – The director of the former Howard Johnson hotel in Otrobanda Curaçao, has been held personally liable by the Joint Court of Justice for a debt of over 400,000 guilders owed to development bank Korpodeko.

The Court ruled on appeal that the director was jointly and severally liable for the loans of the bankrupt hotel company and must therefore repay them personally.

Credits

The case revolves around credits that Korpodeko provided to the operator of the Howard Johnson hotel, Caribbean Hospitality Management (CHM). After the hotel company went bankrupt, a debt of approximately 404,000 guilders remained outstanding.

Because the director had personally co-signed the credit agreements, Korpodeko pursued him directly.

In first instance, the director was initially successful, but the Court overturned that judgment and largely granted Korpodeko’s claim. According to the Court, the director is considered jointly and severally liable alongside the bankrupt company and can therefore be held personally liable for the full debt.

Securities

The director argued that Korpodeko had initially done insufficient to recover from the hotel company’s securities, such as the hotel’s inventory, thereby breaching its duty of care. The Court rejected this defense.

According to the judges, the case file shows that the hotel company struggled with debts to multiple parties for years and that Korpodeko did indeed take steps to secure its position.

For instance, the bank filed an objection against forced collection and later entered into an arrangement whereby it received part of the proceeds from auctioned goods. According to the Court, the bank was not obligated to pursue all possible procedures or to follow every solution proposed by the director. There was therefore no breach of duty of care.

Personally Signed

Because the director had personally co-signed for the loans and the bank made sufficient efforts to recover the debt, he must pay the outstanding amount of over 404,000 guilders as a jointly and severally liable debtor, plus interest and legal costs.