"With total transparency and integrity..."

When will Mike live up to his promises?

Many who read this blog have been critical of Villa Vie’s management for myriad reasons. When we say management, we’re referring specifically to the husband and wife duo at the top named Mike and Kathy. There are so many valid and deeply concerning reasons to criticize their actions, their inaction, their horrible communication, their lack of transparency, their unwillingness to listen to residents/staff/prospective clients, their obdurate secrecy for no reason, their lack of responsiveness, their dictatorial management style that seems to cause so many employees to leave on less than ideal terms … the list could fill pages.

The title of this article is an excerpt from a message (below) that Mike broadcast to clients of Life at Sea, attempting to lure them away from that venture and into his almost identical concept for Villa Vie (while he was still under contract with Life at Sea).

MIRAYINT et al v PETTERSON et 4 Case No CACE-22-014436 Exhibit 21

Take specific note of this passage: “We are busy on our next project, Villa Vie Residences, our original plan which make [sic] the residents the majority stakeholders and creators of the project itself. With total transparency and integrity, we will make the dream come true stronger, better than anything else on the market today. Stay tuned explorers.”

But in Villa Vie Land, what does being a majority stakeholder yield in actual benefits? The right to vote on company decisions or direction or operations or on anything of import at all?

No.

The right to be near the front of the line for repayment or reimbursement should the company go bankrupt?

No again.

Bank loans give first lien to the lending institutions and employees are paid after that. And under maritime law, the entity that seizes the ship trumps all other claims. "Owners"? They are back near the end of the line in terms of rights or priority for repayment with whatever funds may still be available. Then what exactly is it that they "own" if the ship belongs to the banks and they have no actual say in the running of the company?

Tell that to the Founders Club, a group of approximately 90 individuals who have invested amounts varying from $25,000 to $1,000,000+ in return for shares in any future profits as well as various discounts/benefits/perks/privileges. Meetings between members of the Founders Club and corporate leadership to review the current state of the venture and to allow questions to be answered were promised and are supposed to occur regularly. These investors are naturally greatly concerned about the financial state of the business and the performance and safety of their very sizable investments.

The gold standard for assessing the financial health of a business is an independent external audited financial statement. Investopedia puts it this way:

Audits serve as a crucial cornerstone of the financial world. They provide stakeholders—from investors and creditors to regulators and the public—with confidence that an organization's financial statements accurately reflect its true financial position.

They further list the following vital roles fulfilled by audits:

• Accuracy and reliability of financial reports

• Fraud prevention

• Regulatory compliance

• Stakeholder assurance

• Operational improvement

Multiple Founders report being deeply troubled that it has been almost 2 years since the first Founders Club investment funds were raised, yet despite their persistent requests, they have never been shown full financial details nor an audited financial statement. Without this absolutely vital demonstration of the promised “transparency and integrity” by management, investors have nothing upon which to judge the venture’s true current status or future viability other than a lot of shucking and jiving and the bright red flag of “Trust me” uttered by parties in control.

Allegedly, Founders to this date have still not been allowed to see a cohesive and complete set of financial statements, properly prepared and detailed and (most importantly) that actually balance, whether audited or not. No audited financial statements for the financial year ended December 31st despite now being 7 months after that date and despite the external audit being mandated by bank lenders (which therefore, one assumes, must actually exist). Founders report that they do not have that information.

Is it really possible to hawk a premium, luxury product at middle class prices?

Of equal importance, yet also apparently missing, is strategic modelling to show what combination of conditions would result in the venture being viable now or in the future. For example, what combination of a complex range of variables such as occupancy level, new sales, fee revenue, expenses, inflation, resident drop out rate, etc. would result in the venture being financially viable - projected into the future, then compared month by month with actual data? We’re talking about standard feasibility projections, adjusted on a month-by-month rolling basis with actual data. Basic stuff. Elementary financial management. Even for a startup. Especially for a startup, in fact.

One may recall that Mike's "expertise" is in the financial area. From the November 2023 Team Page on the VVR website: "Mikael has over 18 years cruise line finance experience, most recently as a cruise start-up consultant. He has operational finance experience at Royal Caribbean. He led the financial planning team at Prestige Cruise Holdings for over 5 years and headed the merger acquisition analysis with Norwegian Cruise Line." So why does it appear as if the industry standards skills, purportedly learned at these major cruise lines, are not being applied at his own company?

To repeat, Founders state that they have never been shown any of these complete financial statements or projections despite there having been many, many opportunities to do so. They complain that disclosure is blatantly avoided, questions brushed aside or simply ignored. The standard MO of management is, they say, to introduce distractions at every Founders meeting. It seems that there is always some titillating new gizmo or wrinkle just over the horizon that rarely materializes or lives up to expectations, or some crisis so urgent and critical that all attention must be devoted to it rather than to boring, dry finances.

In a recent Villa Vie Facebook thread on July 25th of this year, “Mike P” (assumed to be VVR executive chairman Mikael Petterson) stated, "We provide Financials to our 90 Founders in quarterly meetings but not made available publicly." I’m sorry, Mr. Petterson, but that appears to be absolutely not true. Huge lie according to what we are told. Off the scale on the BS meter. I guess Kathy (his wife, CEO and webpage administrator) must have recognized the problem and removed that post with almost a dozen more that were similarly bogus.

When Founders, residents or even potential clients ask about financials, they are immediately attacked by management and a supporting cast of rabid cheerleaders. But why? Since the financials obviously must exist, why the childish games, why the attacks, why the evasive, combative and counter-productive phony baloney? Does management not realize that such behavior simply heightens mistrust and lack of faith in their leadership and the venture itself?

Current residents – you are investors with substantial amounts of money at risk as well. Ask yourselves:

• Does anybody know where this venture is going financially?

• What is happening to all the cash from new sales and big upfront deposits being taken for voyages years and decades (Endless Horizons) into the future?

• How can there possibly be 15 years “guaranteed" without insurance, bonding, escrow or other means and ability for it to be in any way a reality?

• Is this management behaving in a way that inspires confidence that they will even be around that long to concern themselves with it?

Onlookers and prospective residents, you may want to ask yourself all the above plus:

• What's really going on when you're repeatedly and enthusiastically encouraged to "come join us" by Founders, residents, vloggers and others? Is it possible that there could be motives other than pure altruism at play?

It's unlikely that any of us have ever been on a regular cruise ship and concerned ourselves with wondering about these kinds of issues. We just expect that these things have been thought through; that someone is taking care of such financial details. We also assume that shareholders are fully informed with straightforward facts and figures.

In this case we can't expect such details to be made public; however, when you're handing over big bucks and big deposits far in advance, shouldn’t you know that:

• Approximately 90 major investors in this company (aka Founders) own 80% of the company yet incredibly have no clue as to its true financial viability or current financial status, and

• Not only have they never at any time had a clue in this regard but also that they are actively being denied and blocked from access to this vital information.

Founders tell us that they are deeply troubled, alarmed and confounded by this.

So Founders – here are a few brief closing questions for you:

• You know it can't go on like this, right?

• What can YOU do to remedy this situation?

• When will you finally demand the “transparency and integrity” you were promised long ago?

Don’t like what’s being said in this space? Then refute it with facts, not bluster.

Truth; not parroting the company line.

Just the facts. Verifiable facts. Honesty.

After all, everyone wants total transparency and integrity.

Or don’t they?

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Ed. note: No Founders were harmed in the making of this article.
Information contained herein is based on statements voluntarily provided by Founders who affirm that disclosing this information is not in violation of any applicable NDA’s or other legally enforceable agreements. Rather, these concerned Founders are simply expressing their dismay about how they are being treated and stating what they want to know. What they should know. What they say has been hidden from them. And what they are 100% entitled to know.