Vivot Group Files for Bankruptcy Amid Financial Crisis, Lender Lawsuit

The Vivot Group of Companies, a prominent full-service commercial construction firm in the U.S. Virgin Islands, has filed for bankruptcy, according to court documents obtained by the Consortium.

Jean Patrick Vivot, president of the conglomerate, is requesting joint administration for the bankruptcies filed individually by each of the ten companies in the group. These companies include Vivot Equipment Corporation, Eleven Construction, PSI Tire Supply, Axis Development, TTA Logistics, Valdez Industrial Group, Caribbean Crane & Rigging, Vivot Industries Virgin Islands, Abacus International, and Vivot Equipment. The group collectively owns approximately $64 million worth of equipment, tools, and vehicles, alongside an additional $19 million in real property. However, they owe just over $56 million in secured debt, with the primary creditor being Touchmark National Bank of Georgia, to whom Vivot reportedly owes $31 million. The group also has a reported $13.5 million in unpaid taxes.

Mr. Vivot attributed the financial distress to the 2021 bankruptcy of Limetree Bay Services, which left the Vivot Group with $14.5 million in unpaid receivables. “Limetree’s liquidating bankruptcy, and its subsequent failure to pay the Limetree Receivables in full, caused the Vivot Group to endure significant financial and operational strain,” Mr. Vivot stated in his declaration. He further explained that a consensual out-of-court debt restructuring was deemed unfeasible after discussions with secured lenders.

Compounding the financial woes, Touchmark National Bank filed a lawsuit in early April, seeking to appoint a receiver for the Vivot Group. The lawsuit alleges that Vivot failed to repay debts and improperly reallocated assets designated as loan collateral. Touchmark claims that some equipment used as collateral was leased to third parties without consent, violating loan agreements.

The lawsuit details nine loans taken by Vivot companies between 2016 and 2019, with other group companies guaranteeing the loans and pledging all assets as collateral. Touchmark’s lawsuit reveals that a November 2023 spreadsheet indicated some collateral assets had been moved from St. Croix to other locations, including Puerto Rico and the mainland U.S. This movement and unauthorized leasing of equipment allegedly jeopardize the collateral’s value and hinder the bank’s ability to locate and liquidate it. Additionally, the bank asserts that Vivot violated loan agreements by allowing tax liens on properties used as collateral.

Touchmark has filed 95 complaints against the Vivot Group and Mr. Vivot, seeking a court judgment, the appointment of a receiver, and potential liquidation of collateral if the debtors fail to repay their obligations.

The bankruptcy filing temporarily halts Touchmark’s recovery efforts. Under Chapter 11 bankruptcy, the Vivot Group aims to reorganize its business, repay creditors over time, and continue operations. As “debtors-in-possession,” the group has requested court permission to use available cash for operating expenses.

For now, the Vivot Group is not in immediate danger of ceasing operations, but industry stakeholders are closely monitoring the situation as one of St. Croix’s largest construction service providers navigates its financial challenges.