CLICO (Guyana) plans to appeal to the courts if the Bahamian liquidator Craig Gomez fails to admit Guyana’s claim and pay the debt it owes, according to attorney John Wilson.
Wilson, of McKinney Bancroft & Hughes, was hired last month by the Guyana government to challenge the proposal made by the liquidator of Gomez to classify the local company’s $6.9 billion (US$34 million) investment in the Bahamian company as a related party loan.
According to a report in yesterday’s edition of the Nassau Guardian, Wilson disclosed on Monday that CLICO (Guyana) has submitted their claim to Gomez after being invited to do so.
“We’ve settled the basis on which we are owed,” said Wilson, pointing out that CLICO (Guyana) holds US$34 million in annuity contracts. “There were several annuity contracts issued to my clients. [Money] was paid to the order of CLICO Bahamas. Whatever CLICO (Bahamas) did with the money is on them.
“When one reads the liquidator’s report and his reference to the investment by CLICO Guyana, you get the view that at least provisionally the liquidator does not accept that this is a legitimate third party liability given that he seems to pass it off as some inter-party loan. If this is indeed his view, it will be vigorously challenged.”
Gomez, in his liquidation report filed in the Supreme Court two months ago, confirmed that he had received policy claim packages from CLICO (Guyana) and CLICO (Suriname). Guyana is claiming US$34 million in policies with CLICO (Bahamas), and Suriname claiming US$15.5 million.
He, however, stated that a preliminary review of the contracts forwarded to him revealed that the respective entities may have had policy contracts with their customers and then the funds were forwarded to the company (CLICO Bahamas), principally the Turks & Caicos branch. It appears that while the funds forwarded to the Bahamas were recorded to the company’s records, the cash actually appeared to have flowed into a United States of America bank account directly from Guyana and Suriname.
“Unfortunately, the contracts that were entered into with the company do not appear to have been standard policy contracts but, in many cases, could easily appear to be the transfer of funds to the Bahamas that could easily be classified as related party loans rather than policies”, the liquidator said.
CLICO (Guyana) invested $6.9 billion (US$34 million) in CLICO (Bahamas) which represented 53 per cent of the local company’s assets. Although these investments were liquid on paper, investigations have revealed that this sum has been tied up in real estate investments that CLICO (Bahamas) had in Florida through subsidiaries. When CLICO (Bahamas) was ordered liquidated on February 24, the local company was subsequently placed under judicial management.
The Bahamian company was then ordered wound up on April 7, by Justice Cheryl Albury, a move which makes the prospect of CLICO (Guyana) recovering its $6.9 billion (US$ 34 million) dim. Justice Albury’s ruling means that all of the company’s assets will be sold to pay off its creditors, and the remaining assets, if any are available, will be distributed to the principals of the company.