Dolphin Cove Limited’s real estate is likely to go on sale in short order to raise cash for the Dolphin Discovery Group which is currently undergoing Chapter 11 bankruptcy proceedings in Delaware, USA.

This was revealed in recent court filings for Leisure Investments Holdings LLC (LIH), the main holding company for the Dolphin Discovery Group. Steven Robert Strom, who is the sole administrator/authorised person for Leisure Investments and the other subsidiaries, has requested the courts permission to retain and employ Greenhill & Co, LLC as its investment banker and Keen-Summit Capital Partners LLC as its real estate advisor and broker.

According to Greenhill’s engagement letter, the company has been engaged to review the company’s financial state of affairs, assist in raising new debt, equity or other securities including bridge, debtor-in-possession and/or exit financing, assist with a section 363 sale or private sale by identifying and contacting buyers and investors and providing general advisory services.

Leisure Investments’ prepetition first lien noteholders and DIP lenders have agreed for Greenhill and Keen-Summit to begin the marketing of certain real estate properties. These include Marineland in St Augustine, Florida as a jointly marketed property, Gulf World in Panama City, Florida, as a real estate asset or for alternative uses and Zoomarine, Aquafelix, and Acquajoss which are in Italy and should be marketed on a going concern basis.

The third schedule of the US and foreign jointly marketed properties listed one property in the USA and 10 properties outside of the USA. Four properties in Mexico, four properties in Jamaica, one property in the Cayman Islands and one property in the Dominican Republic were listed as foreign jointly marketed properties. Dolphin Cove’s Montego Bay, Ocho Rios and Puerto Seco locations along with the Yaaman Adventure Park in Ocho Rios were the four Jamaican properties.

These property sales were not explained in depth in the engagement letter, but it’s likely that the real estate sales would be done to third parties and leased back to the operating subsidiaries. The Dolphin Discovery Group has 30 attractions in eight countries across three continents.

Dolphin Cove as a standalone entity held US$8.76 million (J$1.36 billion) in land and buildings while the overall group held US$21.55 million ($3.34 billion). Dolphin Cove itself was owed US$1.87 million by its related companies and US$848,648 by its parent company World of Dolphins Inc. It is also owed a US$1.11 million advance by Dolphin Discovery Inc.

Dolphin Cove is 79.99 per cent controlled by World of Dolphins. World of Dolphins pledged all of its ordinary shares held in Dolphin Cove as part of Controladora Dolphin, SA de CV (Dolphin Discovery) US$100-million senior note which was issued in April 2019. Court filing noted that the outstanding funded debt obligations for Leisure Investments subsidiaries exceed US$200 million. These debt obligations were stated to have been in default since September 2023 and January 2024.

The debtholders exercised their collateral rights on March 18 to remove all existing members of Leisure Investments and Controladora Dolphin’s board of directors. Steven Strom was appointed as the sole independent director of both boards. Strom was then appointed the sole independent director of the Mexican and USA entities boards on March 28 with Leisure Investments and its subsidiaries filing for a joint chapter 11 bankruptcy filing in Delaware before Judge Laurie Selber Silverstein.

Dolphin Cove’s stock price has been swinging like a pendulum since February 18 when it was revealed that Controladora Dolphin had entered into the Concurso Mercantil process, which is a corporate restructuring and insolvency procedure under Mexican law. The stock rebounded on the news that then Dolphin Cove chairman and founder Stafford Burrowes had expressed in a Jamaica Gleaner article that he’d buy back the company if it went up for sale. However, the stock took another sudden dive in April when the purported Dolphin Discovery Group CEO Eduardo Albor Villanueva published a 21-page document on Dolphin Cove’s website and Instagram page about removing Burrowes as a director and asking the JSE to suspend the company’s stock to conduct an investigation.

Dolphin Cove published an update on the JSE on April 15 that stated Burrowes remained as chairman since World of Dolphins did not follow the appropriate procedure in trying to remove the founder using the company’s articles. However, a recent JSE disclosure revealed that the office of director held by Burrowes was vacated on May 30 using article 95 (h). That article 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.

However, it’s not known if this action is valid since World of Dolphin’s sole directors are Albor and Concepción Esteban Manchado as per the 21-page document. However, Albor and Manchado were stated to have been removed as CEO and General Counsel in March according to Delaware and Mexican court documents. Those court documents also stated that their powers of attorney were revoked, as well.

Additionally, a June 5 ruling by Judge Silverstein in Delaware found Eduardo Albor to be in contempt of court for violating the automatic stay imposed by the state’s bankruptcy code and approved turnover order. Albor was ordered to cease litigation on control of the Mexican businesses, transfer control of the Mexican bank accounts, permit the creditors team access to the Mexican facilities and other digital facilities. Albor faced a US$10,000 a day fine if he violated these orders and didn’t cooperate with Steven Strom and Robert Wagstaff. Silvestein’s ruling effectively recognised the creditors move to exercise its rights and activities.

The Jamaica Observer reached out to Burrowes on Tuesday about the recent developments where he noted that he had no further thoughts to add at this time. Burrowes sold his majority interest in Dolphin Cove in 2015 for over US$35 million or US$0.1338 ($16.03) per share. Burrowes still retains a 9.81 per cent interest in Dolphin Cove and a 2.45 per cent stake in TD Leisure Holdings LLC which is the parent company of Leisure Investments Holdings LLC.

The Dolphin Discovery Group has not responded to any queries by the Business Observer. Florida Attorney General James Uthmeier opened a criminal investigation into Gulf World which saw the death of dolphin Samira, the fourth dolphin death in six months. The Dolphin Company put out a press release on May 30 stating that it would be closing its Gulf World Facility until further notice.

“As the court has expressed on numerous occasions, the welfare of animals in debtors’ care is paramount. This order, therefore, must issue promptly to ensure that lack of communication such as is evident from the record and/or the disputes between the parties does not further endanger or contribute to any loss of life or unrelated to medical conditions,” stated Silverstein in her ruling.

Dolphin Cove’s stock price trended up at the start of the month on the announcement of a $0.60 dividend totalling $235.46 million to be paid on June 27 to shareholders on record as of June 13. World of Dolphins would receive $188.34 million. The stock was down six per cent on Tuesday to close at $13.12. This leaves the stock down 29 per cent in 2025 with a market capitalization of $5.15 billion. Dolphin Cove’s annual general meeting will be held at 2:30 pm on July 3 at The Courtleigh Hotel & Suites.

Dolphin Cove’s real estate may go on sale shortly. (Photo: David Rose)