Mariscal & Abogados files a lawsuit in Gran Canaria against Blue Explorers S.L for allegedly misleading shareholders
The claim alleges the Defendants (Blue Explorers S.L) made false statements, failed to disclose adverse facts about the businesses, finance, operations and prospects. UK based Shareholders (Canarian Underwater) seek to have the
Shareholders Agreement invalidated, damages of 475,761 euros and costs (up to 30% under Spanish Law, 142,728 euros in addition to the of 475,761 euros claim).
In March 2017, the parties agreed they would combine the Shareholders’ investment, knowledge, skills and experience in resort operations, marketing, business growth and dive center operations owned the Defendant in the Canary Islands (allegedly valued at 500,000 euros) to build the largest specialist diving resort operator called Blue Explorers Resorts, the first one opened in May of 2018 on Gran Canaria. In December 2018 the Shareholders called in an international law firm based in Madrid, after they became concerned about the Company, its officers and advisors, possible violations of the Spanish Companies Act and following one of several failed attempts to raise the capital of the new operating company.
According to the case filed, throughout the period before and after the funds were invested, the Defendants made claims around the alleged value of the Company, touting positive financial results and affirming its control over financial reporting. It was also stated that all investments made into the new company would be in the liability of the new operating company at the date of signing the Shareholder Agreement. This assertion was not proven as the money, according the accounts, had never been put into the new company and had the Shareholders known this they would never have invested or signed the agreement. Given it was the core obligation of the agreement to increase the new operating company’s capital increase, when it was legally impossible to carry out.
The claim also states that, despite repeated requests to the Company for its financial statements and information, these requests went unanswered by the Company’s officers and accountants. At this point the Shareholders (who were at the time Board Members) formally requested a board meeting.
The meeting was held on the 30th of March and the Shareholder/Directors were only given access to some of the Company’s records the afternoon before, but what was uncovered has led to the claim filed. The accounts show no trace of the majority of the Shareholder funds, which were provided in 2017 and other Shareholder funds had been recoded as loans, which were never agreed to. Nor was there an independent valuation report on the true value of the Defendants dive business Blue Explorers, which upon discovery, no accounts have been filed for 3 years.
When they finally did file the 2017 accounts in May 2019, they showed a net value of 80,000 euros. (there are still no public accounts for 16, or 18). Shareholders / Directors refused to accept these accounts and moved to call a Shareholders meeting on the 25th of April 2019 and as the Defendants could not provide the accounts showing the Shareholder funds, nor could they provide an independent valuation, no raise of capital took place.
The claim asks the court to invalidate the Shareholder Agreement signed due to failure of the Company’s legal requirement to raise the capital of the Company and failure to transfer the shareholder investment into the new operating company. They seek € of 475,761 euros for their return of their investment and costs and there could be awards up 142,728 euros up to 30% of the claim for legal costs and legal interest. According to the Spanish Companies Act, major
investors can pursue the CEO’s personal assets if the courts conclude that fraudulent or reckless behavior has taken place.
Should the Plaintiffs claim be successful at trial, the consequences would leave the company insolvent, with potential closure of the resort in Gran Canaria and Dive Centre in Tenerife, with 30 people out work and 1000s of European holidaymakers and their families and divers without a holiday.
Spokesperson for the plaintiff commented. “We look forward to learning more about the manner in which the investment was elicited from the Shareholders; how the raise of capital was intended to work without the required legal documentation; and in which entity it had been accounted for in, as it seems to the Shareholders are left holding nothing but “blue sky.” Should the Plaintiffs claim be successful at trial, the consequences would leave the company insolvent, with potential closure of the resort in Gran Canaria and Dive Centre in Tenerife, with 30 people out work and 1000s of European holidaymakers and their families and divers without a holiday.”
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She holds a Bachelor's degree in Communication & Mass Media from Panteion University of Political & Social Studies of Athens and she has been editor and editor-in-chief in various economic magazines and newspapers.
