Shares of Dolphin Cove Limited have tumbled once again as an apparent disagreement between founder Stafford Burrowes and Dolphin Discovery Group CEO Eduardo Albor Villanueva has spilled over into a public battle for control of the Jamaican boardroom.

A notice to the Jamaica Stock Exchange (JSE) and public investors was published on Tuesday, April 8, 2025 on Dolphin Cove’s website and Instagram page by World of Dolphins Inc (WODI), Dolphin Cove’s direct parent company, over the signatures of WODI directors Albor and Concepción Esteban Manchado.

The notice, made several allegations against Noel Levy, John Bailey, and Richard Downer, Dolphin Cove’s independent Jamaican directors, and the company secretary Rhonda Goodison regarding Burrowes’ status on the Dolphin Cove board. Burrowes has been the chairman of Dolphin Cove’s board of directors from its incorporation in September 1998.

A release posted on Dolphin Cove’s website on December 3, 2024, stated that Burrowes was terminated as a board member of Dolphin Cove on December 2 under section 95 (g) of the company’s articles of incorporation which allows for the removal of a director by a resolution passed under Section 179 of the Jamaican Companies Act. Additionally, section 95 (h) allows for a director to be requested to resign by instrument in writing if a shareholder owning not less than 51 per cent delivers that request to the company’s registered office for the company secretary’s attention.

The release stated that a new chairman would be appointed from the remaining seven directors in the coming days, but since then no word has emerged from the company regarding a new chairman.

The April 8 notice outlined a series of e-mail and documents to support World of Dolphins’ position on terminating Burrowes’ status on the board. It alleged that Burrowes was disrespectful to staff members at Dolphin Cove. Based on that information, Albor and Manchado had filed a resolution on November 10, 2024 under World of Dolphins name to begin the necessary steps to remove Burrowes as a director.

The resolution also said the company would report the situation to the appropriate authorities; it also stated that Burrowes is to be denied access to any of Dolphin Cove’s Jamaican facilities and file criminal charges if he does or attempts to do so. It was also resolved to ensure that Burrowes and all board members are notified of the resolutions adopted.

Information regarding the termination of Burrowes as a board member was never posted on the JSE. Additionally, checks on the Companies Office of Jamaica website yielded no findings on the departure of any Dolphin Cove directors.

However, a notice was posted on April 2 by Dolphin Cove stating, “Dolphin Cove Limited (DCOVE) wishes to advise that, based on the legal advice the company has received, Mr Stafford Burrowes remains the chairman of Dolphin Cove Limited, and the Jamaica Stock Exchange has been duly advised.”

Despite this posting by Dolphin Cove on the JSE, World of Dolphins is contending that the three Jamaican directors and the company secretary did not share information with the JSE last year on the change of Burrowes’ status. Dolphin Cove’s parent company is also alleging that the Jamaican directors are protecting Burrowes.

The April 8 notice also stated that the Jamaican directors contacted Gina Phillipps Black, a partner and the head of Myers, Fletcher & Gordon’s (MF&G) Commercial Department, for a legal opinion. World of Dolphins went on to make further remarks regarding Black, whose firm is listed as Dolphin Cove’s attorneys-at-law in its annual report. The notice later referenced documentary evidence produced and verified by Trevor Patterson, legal counsel for World of Dolphins. Patterson is a founding partner of legal firm Patterson Mair Hamilton.

The Jamaica Observer reached out to both Black and Patterson who didn’t provide a response up to press time on the accuracy of what was described in the World of Dolphins notice. The number listed to reach Goodison was for Dolphin Cove’s Ocho Rios location which, when contacted, stated that she works from home. Attempts to reach Downer on his listed number revealed that calls to that number are restricted. A call to Levy revealed that he’s a consulting attorney for MF&G with the office stating that would returned the call. Calls to Burrowes’ personal number went unanswered.

When contacted, Bailey, a businessman and director of Dolphin Cove, noted that any commentary should be made by the chairman of the board to ensure that there is no confusion regarding the stance of the board. He did note, on the call, that certain steps must be followed based on the circumstances which have been observed in the public domain.

Efforts to reach Dolphin Cove CEO Gonzalo Pachéco Perez and Dolphin Company CEO Albor have proved futile.

The Business Observer previously sent three queries to Dolphin Cove’s board affairs e-mail enquiring about the appointment of a new chairman, the company holding an investor briefing surrounding the Mexican Concurso Mercantil process for Controladora Dolphin, SA de CV (Dolphin Discovery), 90 per cent owner of World of Dolphins, and if the 2024 annual report would provide a more comprehensive update on the company’s affairs.

The company replied with the April 8 notice and didn’t addressed any of the other queries.

An updated JSE disclosure on April 15 by Dolphin Cove has indicated that Burrowes continues to remain a director of Dolphin Cove. It stated, “With reference to statements made in a letter to Jamaica Stock Exchange from World of Dolphins dated April 8, 2025 that have been posted on Instagram and on Dolphin Cove Limited’s website, this is to inform that, based on legal advice received to date, the ‘notice’ signed on behalf of World of Dolphins, and inter alia, issued on an unauthorised ‘letterhead’ of Dolphin Cove Limited, is ineffective for the purposes of Article 95(h) of the Company’s Articles of Incorporation and therefore the office of director occupied by Stafford Burrowes has not been vacated in accordance with that Article.”

The disclosure also added, “Should a proper instrument be issued within the terms of the Article, the office of the director in respect of which it is issued, would be vacated, without more.”

Investors flee Dolphin Cove Stock

Last Wednesday, Dolphin Cove’s stock price dropped 11 per cent from $16.48 to $14.67 after investors became aware of the April 8 notice. The stock halted down to $13.62 on Wednesday before hitting an intraday low of $12.84. The stock further sunk seven per cent last Thursday to $13.70. The cumulative drop in the share price over Wednesday and Thursday translates to $1.09 billion (US$6.88 million) in lost market value up to April 10.

While the stock experienced a slight rebound up to $14.19 on Tuesday, the shares are down 23 per cent year-to-date with a market capitalisation of $5.57 billion.

The pressing reason for the precipitous drop in Dolphin Cove’s stock price is due to World of Dolphins’ request that the JSE investigate Downer and Goodison and suspend trading in the stock if the JSE deems it necessary to do so to complete its investigation. When a stock is suspended from trading, investors cannot buy or sell the stock until it is readmitted to trading. Stocks tend to trade lower when they begin trading again.

This is the second time in less than two months that Dolphin Cove’s stock price has cratered in value due to negative information. On February 17 it dropped 37 per cent from $19.59 to $12.41. On February 27 it took another dive after news emerged out of El Heraldo de Mexico that Dolphin Discovery had applied 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 under Mexico’s Concurso Mercantil process, which is a corporate restructuring and insolvency procedure under Mexican law. This process has a 365-day conciliation phase for the entity to reach an agreement with its creditors before any possible liquidation phase might take place.

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

The February 25 disclosure made no difference to Dolphin Cove’s continued stock price decline until a February 28 article in the The Gleaner reporting Burrowes as saying that he would be willing to acquire Dolphin Cove’s shares should they go up for sale.

By March 11, the stock price rallied to $19.30.

Dolphin Cove’s 2024 audited financial statements are late and should have been published by April 15, according to a recent release. The delay was also influenced by the audit committee (Downer, Levy and Sergio Jacome Palma) and the company’s auditors awaiting additional information around the Concurso Mercanitil process for Dolphin Discovery.

Stafford and Marilyn Burrowes founded Dolphin Cove in September 1998 establishing a marine park at Ocho Rios, St Ann, that had dolphins, stingrays and sharks along with other wildlife animals. The company continued to expand until it listed on the JSE Junior Market in December 2010 where it raised $240 million at $3 per share. The company added Yaaman Adventure Park in Ocho Rios, St Ann, and grew to four facilities along the north coast.

That growth attracted The Dolphin Company, which paid US$30.72 million to acquire 58 per cent of Dolphin Cove from Burrowes in November 2015 at US$0.1338 ($16.03). The Dolphin Company, through World of Dolphins, subsequently paid another US$4.74 million to Burrowes for further 9.04 per cent of the company. That meant Burrowes received just over US$35 million for his stake in the company, with him possibly holding a 2.5 per cent of the Dolphin Capital Company S de RL de CV based on the 2015 takeover bid circular.

Burrowes still remains the second-largest shareholder of Dolphin Cove with a collective 9.81 per cent stake largely through his holding company Garden House Holdings Limited, which owns 9.55 per cent.

While investors await clarity from Dolphin Cove as to the state of affairs, there is a 21-page compilation attached to the April 8 notice on Dolphin Cove’s website. One page includes a February 25 e-mail from director and mentor Richard Downer who stated, “Eduardo, I recommend that before reputational damage is done to all parties, including Dolphin Cove Limited, that we revert to the previous status quo so that the company may operate smoothly without distraction. The independent directors and Stafford himself wish to return to cordial relations and understand that you have been facing enormous pressure. Now is the time for us all to pull together and move forward.”

Parent company files for bankruptcy protection

Apart from Dolphin Discovery filing for the Concurso Mercantil process in Mexico, it has been revealed that The Dolphin Capital Company and 14 other affiliated companies have filed for chapter 11 bankruptcy protection in the United States Bankruptcy Court in Delaware. There are 200 to 999 creditors according to the filing with the estimated assets and liabilities ranging from US$100 million to US$500 million. A chapter 11 bankruptcy is a legal avenue by which a company or group of companies can propose a reorganisation or liquidation of debts with creditors to allow for the business to continue operations and pay creditors over time.

The bankruptcy filing was made on March 31 by Steven Robert Strom who is the sole administrator/authorised person for Promotora Garrafón, SA de CV and and attorney Robert S Brady. Strom is the founder of Odinbrook Global Advisors which specialises in advising clients on managing special situations, distressed debt and bankruptcy events.

According to the 44-page filing by Promotora, Controladora Dolphin, SA de CV (Dolphin Discovery) issued a US$100-million senior note in April 2019 with the Dolphin Capital Company as the parent guarantor along with certain subsidiaries of Dolphin Discovery also being guarantors. GLAS Americas LLC, the successor of The Wilmington Trust National Association, was listed as the collateral agent for the senior note which matures in April 2026.

Another 74-page filing by Leisure Investments Holdings LLC has given further context and revealed that Strom’s appointment on March 18 coincided with the removal of the existing board of directors/managers of Leisure Investments and Dolphin Discovery. It also stated that Albor’s CEO’s delegation of officer-like powers over the referred Mexican entities was terminated. Strom’s filing explained that US$8 million in new funding for liquidity is being sought and that he would be seeking to dismiss the Concurso Mercantil due to it being filed without proper corporate authorisation.

It was revealed that the unaudited 2023 financials for The Dolphin Discovery Group showed US$159.4 million in revenue and US$29.3 million in EBITDA (Earnings before interest, tax, depreciation and amortisation) from 3.55 million visitors across its 33 parks. Those parks were located in Latin America, the Caribbean, USA, and Italy.

Due to the bankruptcy filings, all legal proceedings by the 15 businesses consolidated under the bankruptcy filing have been stayed and placed on inactive status. This has been confirmed through Miami-Dade court filings by MS Leisure Company and Dolphin Leisure, Inc. May 8 has been set as the first meeting of creditors.