Ex-CEO of Ocean Parks Fined $10,000 a Day in Spat With Lenders

Mint

2 days ago

(Bloomberg) -- The former chief executive officer of a string of bankrupt, dolphin-themed animal parks is facing a $10,000-a-day fine, after he was accused of using credit-card readers he bought at Costco to divert ticket revenue away from his company's Mexican locations.
A federal judge in Delaware imposed the sanctions on Eduardo Albor, who has been fighting US-based lenders for control of The Dolphin Company, which has theme parks in Latin America, the US and Europe. Judge Laurie Silverstein ordered him to stop interfering in the company's operations and give new management access to bank accounts and other financial records.
The months-long dispute between Albor and lender-backed new management has disrupted the company's operations and has threatened the welfare of hundreds of dolphins, sea lions and other animals. The newly appointed independent directors have raised concern about animal welfare at the company's theme parks, as a number of dolphins have died in recent months. Regulators have also tightened scrutiny of the company.
The animals are both the main attractions at the parks and valuable collateral for more than $100 million in debt.
Albor spent decades building the Dolphin Company into a multinational corporation, but lost control of his empire earlier this year after the company defaulted on about $100 million of debt owed to Cigna Health and Life Insurance Company and The Prudential Insurance Company of America, according to a May court filing. The lenders had been trying to remove Albor since the default last year.
In April, Albor installed new credit-card terminals at the Mexican parks, after lenders took control of the parent company and stripped him of his corporate authority, lenders alleged in court filings. The terminals allegedly allowed Albor to divert ticket-sale proceeds away from The Dolphin Company's bank accounts, which had been taken over by the new, US-based management team, they said.
The cash, collected just as peak tourist season hit, was instead put into new accounts set up by Albor and used, in part, to pay his legal bills in Mexico, according to court filings.
The judge's sanctions did not mention the new credit-card terminals, but focused on Albor's efforts to file court challenges in Mexico claiming to still be in charge of The Dolphin Company. Albor has used court cases in Mexico to try to block lenders from taking over the company and to remove their representatives from the headquarters in Cancun.
During a court hearing this week, Albor's attorney defended the former executive, arguing that Albor has been cooperating with the new managers. The new payment machines were installed in the parks and new bank accounts opened because The Dolphin Company's main accounts had been frozen, said attorney James C. Moon.
The new accounts allowed Albor to pay employees at the parks in Mexico and feed the animals, Moon told the judge.
The two sides have been fighting over company records, computer systems and access to employees who are needed to operate the Mexican businesses.
In April, Albor, with help from state police officers, took back control of The Dolphin Company's headquarters building, which the executive owns. After putting the corporation into bankruptcy in the US, lenders had temporarily changed the locks on the building, including on Albor's personal office.
The case is Leisure Investments Holdings LLC, number 25-10606, in the US Bankruptcy Court for the District of Delaware.
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