Peter Kwee could be sued over Laguna club’s financials: liquidators

The liquidators of the insolvent Laguna National Golf and Country Club have secured litigation funding, paving the way for any potential lawsuit against its owner and motoring tycoon Peter Kwee.

Laguna National Golf and Country Club previously owned the former eponymous club, which is now known as the Laguna National Golf Resort Club.

Laguna National Golf and Country Club was wound up in February 2023, upon the application by pioneer club member and bondholder creditor Lim How Teck. Lim and 580 fellow holders of unsecured notes are owed an estimated S$187.4 million as the club had defaulted on the bonds when they matured on Jun 11, 2021.

Laguna National Golf and Country Club was initially owned by a consortium, and the first batch of members each acquired a S$120,000 unsecured note to help fund the development of the club.

Laguna Golf Resort Holding, a unit of Kwee’s Group Exklusiv, took over Laguna National Golf and Country Club in 2001.

Kwee, his wife Catherine Lee and son Kevin Kwee are the owners of Group Exklusiv, with the patriarch holding a 60 per cent share.

When the High Court ordered the liquidation of Laguna National Golf and Country Club, father and son were directors while Karen Kwee, the senior Kwee’s daughter, had already resigned from her director position the prior year in May 2022. She was declared bankrupt subsequently in October 2022.

Financial firepower

With the High Court having recently sanctioned the agreement for funding of an undisclosed sum, liquidators Cameron Duncan and David Kim of KordaMentha now intend to pursue claims against Peter Kwee and potentially other members of his family to repay the company’s creditors.

Duncan told The Business Times on Monday (Feb 3): “We haven’t filed any claims yet. That’s where we’re potentially headed.”

In his affidavit to seek the approval of the funding agreement, Duncan noted that any lawsuit against the Kwees would be brought because of their capacities as former directors of Laguna National Golf and Country Club and current directors of Laguna Hotel Holdings, over transactions between the two companies prior to the liquidation.

Peter Kwee and Kevin Kwee are the current directors of Laguna Hotel Holdings after Karen Kwee stepped down in 2022.

Duncan said the company’s books and records as well as responses provided by Peter Kwee showed that the S$130 million payment for the land lease has not been fully paid up, but appears to have been used to set off debts purportedly owed to entities related to Peter Kwee.

In 2012, the lease for the land on which the club operates was extended to 2040 from 2021. In 2016, Laguna Hotel Holdings acquired the lease from Laguna National Golf and Country Club.

When Laguna National Golf and Country Club ceased operations, its golf equipment, memberships and other parts of its business were transferred to Laguna Hotel Holdings, and all balances between the two entities were fully set off in Laguna National Golf and Country Club’s books.

This means all debts owed by Laguna National Golf and Country Club to Peter Kwee’s related entities were reflected as fully paid, but the debt owed to the bondholders is outstanding.

Laguna National Golf and Country Club has total liabilities of about S$187.7 million, with the bonds forming the vast majority of the amount at S$187.4 million.

The legal claims could include those for breach of directors’ duty, clawback of assets disposed of at undervalue and clawback of debts paid or assets disposed of by unfair preference, said Duncan in his affidavit.

LCM Funding SG, an international provider of dispute financing solutions with headquarters in Sydney and listed in London, and 244 bondholder creditors including Lim have agreed to fund any lawsuits to recover the company’s assets.

The funder will contribute up to 79.7 per cent of the payment, with the remainder from these participating bondholders.

But the claims could be settled, a possibility that the liquidators do not rule out.

Source: The Business Times © SPH Media Limited. Permission required for reproduction.

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