Friday, October 26, 2007

A Tale of Two Cay Clubs

A previous post on the Key West Chronicle blog, titled Has Cay Clubs Bitten Off More Than It Can Chew, has received more comments than any other post (148 comments as of now, and growing).

The post was published 5 months ago and questioned if Cay Clubs had a sound plan.

Late last night, two anonymous comments were submitted. One comment was attributed to "Crystal" (Dave Clark's wife? mistress? good friend?). The other comment was written by a former employee of Cay Clubs. Although there is no way to determine who wrote and submitted the comments, both comments seemed heartfelt and had quite a bit of information.

In the interest of keeping you informed, these comments are reprinted below:

Anonymous commenter submitted:

Didn't you know, I am his mistress ;)
I haven't been here in quite a while, months actually, but it's nice to see both sides still interested in discussing these matters. I'm sorry for all the investors to be in the
position to be financially devastated. I hope Dave can keep it together- he's not giving up. The Berman group (another big developer in the Keys) just went bankrupt. The company building "Playa Cristal" on the old America Outdoors just died (47 yrs old) in his sleep (most likely from stress). All of the publicly traded development companies' stock just recently went to "junk status" (within the last couple of months). Times are definitely not good in this industry and market. All we can do is keep trying and plow ahead (with everything we can, for as long as we can). That's what I see Dave trying to do. He is all-consumed with keeping things moving forward. The bad press never helps and that was the main reason the merger didn't work out. That hurts everyone. But there are relationships in the works as we speak. The A&B deal has a substantial down payment that would be hard to lose- from many months past (maybe even a year, I'm not 100% certain). Closing on it and running it is a better plan, according to my information. I appreciate all the kind and gracious people in the Keys who have shown me, Dave, and our kids respect, whenever we are out in the community.
It helps me remember that there are truly good and decent people still out there, no matter how black our eyes get during this economic downturn/nightmare. Given this is such a small town, I expected people to treat us with a much different demeanor- given the layoffs, leaseback issues, etc. But they haven't. They usually say hello, ask how we're doing and wish us the best. They share stories of their friends and associates who face similar circumstances- tellus about their business downturns, etc. I feel really badly for our employees down here, holding their breaths, hoping for a better day- worried every morning whether or not they'll have their jobs. Several have been offered positions with the company taking over some of the projects down here- unfathomably, most declined. It's unreal how much loyalty and dedication these people generously devote. I really thank you all. Drs. Blumenthal, I'm sorry for whatever your situation has been. I know you've sold many properties with us (not sure if you bought?) No matter what, we will always admire and respect you (I think that's the neighbor blogger?)...Re-the blogger who mentioned the "83 houseboat"- it's actually a '72 houseboat. It's not very marketable, given most '72 houseboats can't be given away (it was given to us). I guess we should try to sell that, though- you're right. I'll work on that this week. Most of our time and energies lately have gone to holding things together and coming up with a more feasible gameplan for today's market. Again, I appreciate all the supportive comments and I sincerely apologize for any and all of the people who are disappointed and angered by the fall-out. You have every right to feel the way you do and to speak your minds. I wish there were more forecasts to share, but I think everything is continuously up in the air- each day's circumstances change- sometimes for the better, sometimes for the worse. So any news or forecasts we post or share, may change in a moments notice. I wish I could tell you more- I wish I knew more. I'm sorry.

Another anonymous commenter submitted:

I was an employee of cay clubs. I noticed alot of problems in the company that i heard many people try and bring to attention but were just ignored. cay clubs violated many rules including many FREC rules. there was alot of misrepresentation rumors about ricky long before the market turned so poorly and they were ignored. they allowed him to continue becasue his sales were so high.
but the bigger problem is whomever was in charge of finances. its was like no one in any of the companies (cay clubs was divided into like 50 different ones) knew what the other comapny was doing. we didnt even have a CFO until the ending days. and yes the director of flight operations and his assistant are still employed along with at least one pilot. and there still is a plane. even if we do not own the planes we just borrow someones elses for the day (which is still pricey). many people that worked there were underqualified. many departments were a complete joke. its not just the owners who are struggling. the employees were let go with no warning, no pay, no vacation pay, etc. the sales agents are still owed lots in commission. barry graham owns over 20 units of his own at cay clubs and he hasn't been paid commissions or leasebacks. hes owed millions. there had just been a sales meeting about a month before the first layoffs where everyone was told the company was doing great only to be let go without warning. talking about lack of communication the hardest part for the owners and employees alike has been the lack of communication. even within the company it was all rumors and hearsay because dave was not talking to anyone. even other partners and directors had no idea what was going on. some of the employees were taking angry calls and could do nothing to help because they didn't know what was even going on. no bulletins saying for example "hey we aren't paying rental money, so here's why and here's what to say". Nope they just had to take all the angry calls and make it that much worse because the employees didnt even know. still communication has been horrible with was is left of cay clubs. gary and david schwarz have resigned. ever wonder why neither schwarz brother invested in even one unit? and if i recall most daves units were in his dads or cristals names and i dont even know if any of them ever even closed. food for thought. barry hasnt been in the picture for a while. they owe him so much money id bet they are avoiding him all together. ive heard that cristal and dave may not even be married so that if anything did happen daves not screwed. the last parts a rumor but the rest is fact.
dave-i dont think you intentionally meant for all this to happen so all i have to say is better communication is key. and manuals are a state law people work better and tend to follow rules better if there are manuals. and dont try and say there are cause they were quickly created at the very end after everything started going down. there was no organization or structure in that company and because of that you have hurt ALOT of people. There was even an owner who commited suicide because of his financial struggles due to cay clubs. forclosures and bankruptcies are huge dave. marriages get ruinied people lose everything they worked for. so everyone thats saying you are crook i dont believe that to be the case, but you definately need some business management classes before you start up another one.
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Anonymous said...

Cayo Dave has it wrong. I was also a past employee and worked in the corporate office."barry graham owns over 20 units of his own at cay clubs and he hasn't been paid commissions or leasebacks. hes owed millions. " That was so not the case! I saw the documents that showed the owners Graham owner THREE UNITS in Clearwater and he had a place in the Keys that held the Cay Clubs name but it was deeded over to him. All properties he owned in Clearwater were in foreclosure. He hadn't made payments in forever!!! He was paid out soo much money when it all started!!! He was part of the scam!! Dave Clark knew what he was doing...he was the DEVIL behind it all. The two Daves worked together years before Cay Clubs and parted ways and then rejoined forces when Clark approached Schwarz. When the shit his the fan I remeber the day in every detail! Clark finally had to tell the Schwarz brothers what was happening. The spending was unbelievable!! The way they would run the "sweep" of accounts was unbelievable as it started to come all falling apart. My department had an account of deposits that were made from various clients and when I got laid off the first thing I did was get the money that was owed to me that was being held in those accounts as I knew on Thursday mornings the all accounts would be "sweeped" and moved into a main account. I contacted clients immediately and told them to ask for their money back as well because I knew they would lose their money. Why in the world Clark was never charged and put in jail for this major scam was unbelievable!! I saw so much in those last few weeks I was could see the stress on the Schwartz brothers face...The amount of conference calls going on back and forth...the yelling on conference didn't need to be in the room...I wasn't. It was unbelievable. Then the Schwartz brother resigned and walked out on the same day. They left everything behind and people were still in the office. They took some assets that Cay Clubs "owned" but they paid for it for pennies on the dollar. I could go on and on...
I'd like to know what ever became of the lawsuit.

Cayo Dave said...

Just to clarify the previous comment:

At the beginning of the previous comment, the commenter is confusing "Cayo Dave" with the Dave's that were involved with Cay Clubs, Dave Clark and Dave Schwartz, stating "Cayo Dave has it wrong."

Cayo Dave is not part, and never has been part of, of Cay Clubs. Cayo Dave is the administrator and writer of the Key West Chronicle Blog that helped expose the Cay Clubs shaky financial picture and financial dealings.

Otherwise, the commenter's information is quite informative, interesting, and revealing.
Thank you for contributing your experience!

If you have more to contribute, please do.

-Cayo Dave (the blogger)