A multimillion-dollar lawsuit has been launched by the Government against the principals behind a failed residential and hospitality complex at Morgan’s Point.

The Ministry of Justice confirmed on Tuesday that legal action had been initiated “in relation to the Morgan’s Point/Caroline Bay development”.

A summons, seen by The Royal Gazette, dated March 24, opens with a claim of damages amounting to $15.53 million.

It marked the latest round for a troubled project in which developers sought to build a luxury resort featuring a hotel, residential units and then a marina at Caroline Bay, on the former US base at Morgan’s Point in Sandys.

The Government took back ownership of the project in 2019 and paid off a $165 million guarantee issued by the previous One Bermuda Alliance administration. However, it has not yet come up with a viable use for the site at the former US Naval Annex.

This week, the Ministry of Justice declined to comment on the substance of the Government’s claims, since the matter is now before the courts.

A ministry spokeswoman said the Government was “committed to protecting the public interest and will allow the judicial process to take its course”.

The summons, with the Government of Bermuda as plaintiff, lists seven defendants variously named across six of ten claims that cite multimillion sums — including developers Brian Duperreault, Nelson Hunt and Craig Christensen, the group of Bermudian businessmen who obtained Morgan’s Point as part of a land-swap deal with the Government.

The trio had previously sought to build a resort development at Southlands in Warwick.

The three, along with Caroline Bay Ltd — the entity backing the proposed resort and condominium development — are listed in the first claim as “liable in damages for fraudulent misrepresentation” for a sum just over $15.53 million.

The lawsuit also names a number of businesses connected to the development as being potentially liable for the claim.

These include Caroline Bay Ltd, Admiral’s View Ltd, linked to George’s Bay, which held the assets of the developers — and Dog Leg Ltd, an entity described by then-finance minister Curtis Dickinson in May 2020 as a “company owned by the Duperreault family” in loans backing Caroline Bay.

The reference came in an opinion article Mr Dickinson wrote for The Royal Gazette, outlining why he believed the development ran against Bermuda’s best interests. Mr Duperreault and his wife, Nancy, were both involved in the project, while Mr Christensen and Mr Hunt were reported to have left it by March 2018.

The Government’s summons goes on to list the same six defendants in a claim that they are liable to account for “any part of the sum” of $15.53 million, and pay “equitable compensation”.

The lawsuit also names Caroline Bay Ltd and the law firm Cox Hallett Wilkinson as trustees of a Quistclose trust. The term refers to funds earmarked for a specified purpose that are held in trust, allowing the creditor to recover them if the debtor spends inappropriately.

The summons gives 14 days from service to make an appearance for the suit. Attempts this week by the Gazette to contact Mr Duperreault and Mr Christensen were unsuccessful.

Caroline Bay struggled with financing after initial funding was secured in 2016 through a loan by a group of insurance and reinsurance firms.

That same year, the OBA government signed a guarantee of $165 million to back the project, describing it as “a key part of a significant stimulus to the Bermuda economy”.

However, construction faltered in February 2018 when the developers’ funding fell short. Although the group announced alternate financing in 2019, contractors at Morgan’s Point were threatening to sue by August of that year over claims that substantial bills for work at the site were going unpaid.

A month later, Mr Dickinson intervened — raising the island’s debt ceiling to pay off the Government’s $165 million assurance.

Mr Dickinson condemned a project he called “beset by difficulties” behind its “inaccurate” public updates, and said the OBA had been irresponsible to sign off on the guarantee.

Bob Richards, who was finance minister under the former administration, defended the $165 million guarantee in response as essential for securing any investment into a brownfield site burdened with significant remediation issues from its years of military use.

The partially developed property sat dormant. Hopes surfaced in 2021 for buyers to sign a deal, but the offer fell through.

In 2022, the Government created Morgan’s Point Development Company to manage the property and secure returns for the island’s taxpayers, and in the 2024-25 Budget Statement, the Government announced it was “preparing the groundwork” to repurpose the site’s unfinished buildings as housing.

In 2025, a memorandum of understanding with the firm Medical Concepts Consulting Management was announced to bring a medical tourism facility to the property.

That September, Zane DeSilva, the Minister of Housing and Municipalities, told the House of Assembly that Morgan’s Point Development Company had begun a feasibility study that would come with updating the site’s financial models.

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