Boardroom battle – Jamaica Observer

Shares of Dolphin Cove Restricted have tumbled as soon as once more as an obvious disagreement between founder Stafford Burrowes and Dolphin Discovery Group CEO Eduardo Albor Villanueva has spilled over right into a public battle for management of the Jamaican boardroom.

A discover to the Jamaica Inventory Alternate (JSE) and public buyers was printed on Tuesday, April 8, 2025 on Dolphin Cove’s web site and Instagram web page by World of Dolphins Inc (WODI), Dolphin Cove’s direct mum or dad firm, over the signatures of WODI administrators Albor and Concepción Esteban Manchado.

The discover, made a number of allegations in opposition to Noel Levy, John Bailey, and Richard Downer, Dolphin Cove’s impartial Jamaican administrators, and the corporate secretary Rhonda Goodison relating to Burrowes’ standing on the Dolphin Cove board. Burrowes has been the chairman of Dolphin Cove’s board of administrators from its incorporation in September 1998.

A launch posted on Dolphin Cove’s web site on December 3, 2024, said that Burrowes was terminated as a board member of Dolphin Cove on December 2 underneath part 95 (g) of the corporate’s articles of incorporation which permits for the removing of a director by a decision handed underneath Part 179 of the Jamaican Corporations Act. Moreover, part 95 (h) permits for a director to be requested to resign by instrument in writing if a shareholder proudly owning not lower than 51 per cent delivers that request to the corporate’s registered workplace for the corporate secretary’s consideration.

The discharge said {that a} new chairman could be appointed from the remaining seven administrators within the coming days, however since then no phrase has emerged from the corporate relating to a brand new chairman.

The April 8 discover outlined a collection of e-mail and paperwork to help World of Dolphins’ place on terminating Burrowes’ standing on the board. It alleged that Burrowes was disrespectful to workers members at Dolphin Cove. Based mostly on that data, Albor and Manchado had filed a decision on November 10, 2024 underneath World of Dolphins identify to start the mandatory steps to take away Burrowes as a director.

The decision additionally stated the corporate would report the state of affairs to the suitable authorities; it additionally said that Burrowes is to be denied entry to any of Dolphin Cove’s Jamaican services and file prison costs if he does or makes an attempt to take action. It was additionally resolved to make sure that Burrowes and all board members are notified of the resolutions adopted.

Data relating to the termination of Burrowes as a board member was by no means posted on the JSE. Moreover, checks on the Corporations Workplace of Jamaica web site yielded no findings on the departure of any Dolphin Cove administrators.

Nevertheless, a discover was posted on April 2 by Dolphin Cove stating, “Dolphin Cove Restricted (DCOVE) needs to advise that, based mostly on the authorized recommendation the corporate has acquired, Mr Stafford Burrowes stays the chairman of Dolphin Cove Restricted, and the Jamaica Inventory Alternate has been duly suggested.”

Regardless of this posting by Dolphin Cove on the JSE, World of Dolphins is contending that the three Jamaican administrators and the corporate secretary didn’t share data with the JSE final yr on the change of Burrowes’ standing. Dolphin Cove’s mum or dad firm can also be alleging that the Jamaican administrators are defending Burrowes.

The April 8 discover additionally said that the Jamaican administrators contacted Gina Phillipps Black, a associate and the top of Myers, Fletcher & Gordon’s (MF&G) Industrial Division, for a authorized opinion. World of Dolphins went on to make additional remarks relating to Black, whose agency is listed as Dolphin Cove’s attorneys-at-law in its annual report. The discover later referenced documentary proof produced and verified by Trevor Patterson, authorized counsel for World of Dolphins. Patterson is a founding associate of authorized agency Patterson Mair Hamilton.

The Jamaica Observer reached out to each Black and Patterson who didn’t present a response as much as press time on the accuracy of what was described within the World of Dolphins discover. The quantity listed to achieve Goodison was for Dolphin Cove’s Ocho Rios location which, when contacted, said that she works from residence. Makes an attempt to achieve Downer on his listed quantity revealed that calls to that quantity are restricted. A name to Levy revealed that he’s a consulting lawyer for MF&G with the workplace stating that might returned the decision. Calls to Burrowes’ private quantity went unanswered.

When contacted, Bailey, a businessman and director of Dolphin Cove, famous that any commentary must be made by the chairman of the board to make sure that there isn’t any confusion relating to the stance of the board. He did notice, on the decision, that sure steps should be adopted based mostly on the circumstances which have been noticed within the public area.

Efforts to achieve Dolphin Cove CEO Gonzalo Pachéco Perez and Dolphin Firm CEO Albor have proved futile.

The Enterprise Observer beforehand despatched three queries to Dolphin Cove’s board affairs e-mail enquiring in regards to the appointment of a brand new chairman, the corporate holding an investor briefing surrounding the Mexican Concurso Mercantil course of for Controladora Dolphin, SA de CV (Dolphin Discovery), 90 per cent proprietor of World of Dolphins, and if the 2024 annual report would offer a extra complete replace on the corporate’s affairs.

The corporate replied with the April 8 discover and didn’t addressed any of the opposite queries.

An up to date JSE disclosure on April 15 by Dolphin Cove has indicated that Burrowes continues to stay a director of Dolphin Cove. It said, “On the subject of statements made in a letter to Jamaica Inventory Alternate from World of Dolphins dated April 8, 2025 which have been posted on Instagram and on Dolphin Cove Restricted’s web site, that is to tell that, based mostly on authorized recommendation acquired thus far, the ‘discover’ signed on behalf of World of Dolphins, and inter alia, issued on an unauthorised ‘letterhead’ of Dolphin Cove Restricted, is ineffective for the needs of Article 95(h) of the Firm’s Articles of Incorporation and due to this fact the workplace of director occupied by Stafford Burrowes has not been vacated in accordance with that Article.”

The disclosure additionally added, “Ought to a correct instrument be issued throughout the phrases of the Article, the workplace of the director in respect of which it’s issued, could be vacated, with out extra.”

Buyers flee Dolphin Cove Inventory

Final Wednesday, Dolphin Cove’s inventory worth dropped 11 per cent from $16.48 to $14.67 after buyers grew to become conscious of the April 8 discover. The inventory halted right down to $13.62 on Wednesday earlier than hitting an intraday low of $12.84. The inventory additional sunk seven per cent final Thursday to $13.70. The cumulative drop within the share worth over Wednesday and Thursday interprets to $1.09 billion (US$6.88 million) in misplaced market worth as much as April 10.

Whereas the inventory skilled a slight rebound as much as $14.19 on Tuesday, the shares are down 23 per cent year-to-date with a market capitalisation of $5.57 billion.

The urgent purpose for the precipitous drop in Dolphin Cove’s inventory worth is because of World of Dolphins’ request that the JSE examine Downer and Goodison and droop buying and selling within the inventory if the JSE deems it needed to take action to finish its investigation. When a inventory is suspended from buying and selling, buyers can’t purchase or promote the inventory till it’s readmitted to buying and selling. Shares are likely to commerce decrease once they start buying and selling once more.

That is the second time in lower than two months that Dolphin Cove’s inventory worth has cratered in worth as a result of unfavorable data. On February 17 it dropped 37 per cent from $19.59 to $12.41. On February 27 it took one other dive after information emerged out of El Heraldo de Mexico that Dolphin Discovery had utilized for bankruptcy-like proceedings over US$200 million in liabilities.

Dolphin Cove made a JSE disclosure on February 25 that Dolphin Discovery had voluntarily initiated proceedings underneath Mexico’s Concurso Mercantil course of, which is a company restructuring and insolvency process underneath Mexican regulation. This course of has a 365-day conciliation section for the entity to achieve an settlement with its collectors earlier than any potential liquidation section may happen.

Dolphin Cove’s 2023 audited financials revealed that World of Dolphins pledged its Dolphin Cove shares as co-security/collateral for a notice buy settlement on behalf of Dolphin Discovery in April 2019. World of Dolphins owns 79.99 per cent of Dolphin Cove’s atypical shares.

The February 25 disclosure made no distinction to Dolphin Cove’s continued inventory worth decline till a February 28 article within the The Gleaner reporting Burrowes as saying that he could be prepared to amass Dolphin Cove’s shares ought to they go up on the market.

By March 11, the inventory worth rallied to $19.30.

Dolphin Cove’s 2024 audited monetary statements are late and will have been printed by April 15, in line with a current launch. The delay was additionally influenced by the audit committee (Downer, Levy and Sergio Jacome Palma) and the corporate’s auditors awaiting extra data across the Concurso Mercanitil course of for Dolphin Discovery.

Stafford and Marilyn Burrowes based Dolphin Cove in September 1998 establishing a marine park at Ocho Rios, St Ann, that had dolphins, stingrays and sharks together with different wildlife animals. The corporate continued to increase till it listed on the JSE Junior Market in December 2010 the place it raised $240 million at $3 per share. The corporate added Yaaman Journey Park in Ocho Rios, St Ann, and grew to 4 services alongside the north coast.

That development attracted The Dolphin Firm, which paid US$30.72 million to amass 58 per cent of Dolphin Cove from Burrowes in November 2015 at US$0.1338 ($16.03). The Dolphin Firm, by way of World of Dolphins, subsequently paid one other US$4.74 million to Burrowes for additional 9.04 per cent of the corporate. That meant Burrowes acquired simply over US$35 million for his stake within the firm, with him presumably holding a 2.5 per cent of the Dolphin Capital Firm S de RL de CV based mostly on the 2015 takeover bid round.

Burrowes nonetheless stays the second-largest shareholder of Dolphin Cove with a collective 9.81 per cent stake largely by way of his holding firm Backyard Home Holdings Restricted, which owns 9.55 per cent.

Whereas buyers await readability from Dolphin Cove as to the state of affairs, there’s a 21-page compilation connected to the April 8 discover on Dolphin Cove’s web site. One web page features a February 25 e-mail from director and mentor Richard Downer who said, “Eduardo, I like to recommend that earlier than reputational harm is finished to all events, together with Dolphin Cove Restricted, that we revert to the earlier establishment in order that the corporate could function easily with out distraction. The impartial administrators and Stafford himself want to return to cordial relations and perceive that you’ve got been dealing with monumental stress. Now could be the time for us all to drag collectively and transfer ahead.”

Mother or father firm information for chapter safety

Other than Dolphin Discovery submitting for the Concurso Mercantil course of in Mexico, it has been revealed that The Dolphin Capital Firm and 14 different affiliated corporations have filed for chapter 11 chapter safety in the USA Chapter Court docket in Delaware. There are 200 t0 999 collectors in line with the submitting with the estimated belongings and liabilities starting from US$100 million to US$500 million. A chapter 11 chapter is a authorized avenue by which an organization or group of corporations can suggest a reorganisation or liquidation of money owed with collectors to permit for the enterprise to proceed operations and pay collectors over time.

The chapter submitting was made on March 31 by Steven Robert Strom who’s the only real administrator/authorised individual for Promotora Garrafón, SA de CV and and lawyer Robert S Brady. Strom is the founding father of Odinbrook World Advisors which specialises in advising shoppers on managing particular conditions, distressed debt and chapter occasions.

In line with the 44-page submitting by Promotora, Controladora Dolphin, SA de CV (Dolphin Discovery) issued a US$100-million senior notice in April 2019 with the Dolphin Capital Firm because the mum or dad guarantor together with sure subsidiaries of Dolphin Discovery additionally being guarantors. GLAS Americas LLC, the successor of The Wilmington Belief Nationwide Affiliation, was listed because the collateral agent for the senior notice which matures in April 2026.

One other 74-page submitting by Leisure Investments Holdings LLC has given additional context and revealed that Strom’s appointment on March 18 coincided with the removing of the present board of administrators/managers of Leisure Investments and Dolphin Discovery. It additionally said that Albor’s CEO’s delegation of officer-like powers over the referred Mexican entities was terminated. Strom’s submitting defined that US$8 million in new funding for liquidity is being sought and that he could be in search of to dismiss the Concurso Mercantil as a result of it being filed with out correct company authorisation.

It was revealed that the unaudited 2023 financials for The Dolphin Discovery Group confirmed US$159.4 million in income and US$29.3 million in EBITDA (Earnings earlier than curiosity, tax, depreciation and amortisation) from 3.55 million guests throughout its 33 parks. These parks have been positioned in Latin America, the Caribbean, USA, and Italy.

Because of the chapter filings, all authorized proceedings by the 15 companies consolidated underneath the chapter submitting have been stayed and positioned on inactive standing. This has been confirmed by way of Miami-Dade court docket filings by MS Leisure Firm and Dolphin Leisure, Inc. Could 8 has been set as the primary assembly of collectors.