Luis Milanes saga will continue with court hearing Tuesday

The continuing saga of Luis Milanes, his Savings Unlimited and investors who are about $200 million lighter goes back to court Tuesday. The session is a hearing and not a trial.

One major issue is the status of the agreement Milanes made with some of his victims in order to avoid a trial. Some of the individuals say that Milanes, operator of a handful of casinos in the Central Valley, is behind by some $560,000.

He had promised to make monthly payments to a trust that would be used for the benefit of the creditors.

He also surrendered real estate. The biggest piece is the downtown Hotel Europa, that trustees have been trying to sell for $10 million. Creditors want a new appraisal because they think that figure is too much.

Appraisers in Costa Rica generally rely on square footage. A business like the hotel could more correctly be valued on its cash flow, but the agreement with Milanes does not seem to allow creditors access to the hotel books even though they technically own the structure now. One buyer prospect already backed out because the books were not available.

A complicating factor is that one of the casinos operated by Milanes is a tenant of the hotel.

Some other property that has been turned over to the trust have liens that Milanes will be asked next week to clear, a creditor said.

A judicial worker said that time has been allocated from Tuesday to Oct. 28 for the hearing.

Milanes has shown that he is very competent in defending himself. He fled the country as his operation in Centro Colón collapsed. He seems to have made a deal with prosecutors to let him return.

He did so in June 2009, and investors continue to be unhappy that he served just a day in jail before he posted property to make bail.

Savings Unlimited was one of a handful of high interest borrowing operations. Unlike Luis Enrique Villalobos, who still is a fugitive, Milanes was open to his creditors on the use he would put their money. He told them the cash would develop casinos. For some reason, however, the casinos are not now involved in the court case.

The high interest operations appear to have been negatively affected by strict money laundering rules put in force by the United States and other governments after the terrorist attacks Sept. 11, 2001. Villalobos suspended operations in October 2002, and Milanes left in November.

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