Bermuda’s Finance Minister Curtis Dickinson has confirmed that payment from the owner of the Fairmont Southampton, Bermuda’s largest hotel, to cover US$11 million in redundancy money given to staff by the government has been repaid.
He said the company paid the money into an account for the lawyers representing the staff last Friday.
The workers, 500 of them Bermudian, joined forces in a class-action lawsuit against Westend Properties, a subsidiary of Miami-based Gencom, the hotel owner, as a condition of getting bailed out by the government.
Dickinson said the money had now been wired to the government’s coffers.
“This repayment is an excellent outcome of the government’s action which has eliminated the government’s financial exposure in relation to the employee loans,” he said.
Dickinson added that Westend Properties would also pay about half-million dollars for the government’s legal and consultant fees “in the near future”.
The Finance Minister said the closure of the 593-room resort last October had created a “perfect storm” for the 750 staff “already suffering from the extended layoffs because of the COVID-19 pandemic”.
He said Westend Properties was unable to meet its obligation to make redundancy payments in a timely fashion, and there was no guarantee on when the employees would get their cash and the government had to step in.
“Action was required and the government of Bermuda decided that it was unacceptable to allow this situation to continue unaddressed,” Dickenson said.
Gencom, which already had a presence on the island, having purchased the Rosewood Tucker’s Point Hotel and Resort in 2017 and getting it out of receivership, bought the Fairmont Southampton in 2019 and announced plans for a $180 million refurbishment.
When the hotel was shuttered in October 2020, an 18-month facelift was announced.
Dickinson said Gencom had “secured further funding to allow Westend to continue with pre-development work”.
“They are prepping themselves for the development, and they are still looking to raise financing for the substantial redevelopment.”