Ongoing, broad investigation and pending class action lawsuit against Cay Clubs International.
The investigation centers around reports from investors who purchased condominiums in Las Vegas, Nevada and Orlando, Florida from Cay Clubs International. These individuals were not paid any, or only paid a portion, of the leaseback money owed to them by Cay Clubs.
Cay Clubs owns and/or operates a number of large, luxury condominium complexes in the U.S., including resorts in Clearwater, Florida, and the Florida Keys. During the recent condominium market boom, Cay Clubs International purchased numerous properties, including condominium properties in Las Vegas and Orlando. These include the purchase of 14 hotels, with more than 2,800 units and 900 boat slips in 2005 and 2006 alone. In many instances, Cay Clubs would purchase a complex and plan to renovate the condos or plan to build amenities around the complex such as restaurants and shopping malls to increase the value of the condos. Cay Clubs sells these condominiums with the offer that they will "lease" the property back from the purchaser for a period of two-years. These lease payments, if paid, would typically amount to approximately 15% of the purchase price. These "leaseback" payments were to be made soon after closing and were too provide the condominium purchaser with the ability to make the required mortgage payments while Cay Clubs was making the designated improvements to the condominium. Most of our clients were induced to purchase these condominiums because of the "leaseback" offer. Most of the condominiums were purchased for $350,000 to $600,000.
Most of our clients have not been paid any of their leaseback money. Because our clients intended to use their leaseback money to pay the mortgage on the condominiums until the renovations or amenities were completed, many have now been forced to refinance their homes, cash in annuities, and endure other financial hardships to make their monthly payments on these condominiums. Recent newspaper articles about Cay Clubs financial woes and the "leaseback" payments it owes, reveals that 140 Cay Clubs condominium owners are owed leaseback payments in the amount of $10.5 million.
Name (Stock Symbol)
Cay Club International
Cay Club International, with headquarters in Clearwater, builds and operates condomiinium complexs and time share facilities,
including Clearwater Cay Club, Sarasota Cay Club FL, seven Cay Clubs throughout the Florida Keys, and an additional non-waterfront club, the Las Vegas Cay Club.
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