…and Novelo’s bankruptcy was bad management

In the case of Novelo’s, according to Fonseca, no amount of government effort could save the company from its owners.

Ralph Fonseca

“The government’s position is that we had a very good business plan, we thought that was signed off on by some of the best in the world and the business plan was not carried on the way it should have been. We tried to intervene as often as we could good and as the laws would allow us to, to try to correct the business management of the operation, and after eighteen months we just couldn’t hold on any longer, so we had to put due management in there. But we still believe that the Novelo’s operation is a viable operation if it follows its business plan.”

Janelle Chanona

“There are allegations that that loan was acquired under less than official arrangements. That the for one thing, the collateral, the buses, Atlantic already had it yet D.F.C. still gave them thirty million, is there any response to that?”

Ralph Fonseca

“Except for nonsense. You are speaking to nonsense. These were things that were checked out by not only the people at D.F.C., but the K.P.M.G. people, and also the people that eventually bought the security eventually… which is a very large security company in the U.S. The collateral is there, millions of dollars of real estate collateral, millions of dollars of properties, of buildings, apart from buses and the actual routes. There were one or two, as far as I know, discrepancies between the Atlantic Bank collateral and the D.F.C. collateral, but it’s very small. Atlantic Bank and D.F.C. are working together; they have no difficulties with each other getting it sorted out. So it’s the Opposition trying to make hew and cry over nothing. What went wrong is that it was badly managed and it did not pay its bills. Like any other company we had to take a risk like in some many things that we have done, like with this project. They didn’t follow their business plan. If these guys don’t follow their business plan in constructing this plan, they are going to have a problem. The management unfortunately of that company decided to do what they wanted instead of what was in the loan agreement, and that’s what went wrong, nothing else.”