Guyana’s High Court has awarded Eureka Medical Laboratories Inc (EML) a $62.4 million judgment against United States offshore medical provider, RemoteMD LLC, after that company packed up business here and filed for bankruptcy in its home country, leaving over $100 million owed to locals for the third party services it received.
Presiding judge, Gino Persaud, made the judgment against the respondent for the sum of $62,403,477 as monies “due and owing by the Respondent to the Applicant,” court documents obtained by the Sunday Stabroek show.
Justice Persaud also awarded interest “at the rate of 6% per annum from the 25th July 2020 to the date of the judgment and thereafter at the rate of 4% per annum” in addition to fixed costs of $50,000.
Eureka Medical Labs was represented by attorney-at-law Ronald Burch-Smith.
How Eureka will recoup the funds is unclear as sources told this newspaper that checks have revealed that the company has no assets here. “Their account here is empty. They have no assets, fixed or other and… they basically packed up shop and left Guyana… leaving nothing behind…” a source said.
The company made most of its payments to clients in Guyana by way of wire transfer from a JP Morgan Chase Bank account in the United States.
The court documents stated that on January 27 of this year, EML filed a fixed date application in the name of its proprietor William Andrew Boyle. With the matter fixed then for March 14 and Affidavit of Service filed, Remote MD filed no defence or appeared at the hearing.
That is possibly because the company no longer operates here and all of its offices are closed.
Repeated calls by the Sunday Stabroek to RemoteMD’s CEO, Kathryn Steele have not been answered since late last year.
Eureka asked the High Court to issue orders in “Judgment against the Respondent for the sum of $62,403,477 being the sum of money due and owing by the Respondent to the applicant. (b) Interest under the Law Reform Miscellaneous Provisions Act at the rate of 6% per annum from 25th July 2022 to the date of Judgment and thereafter at the rate of 4% per annum. (c) Costs,” in addition to such further or other order as the Court deemed just.
Their grounds for the application was that the Applicant which is a LLC and which provides laboratory and allied medical services in Guyana, supplied services to the Respondent which is a supplier to medical services in the oil and gas industry, to the tune of $62.4 million but was not paid.
“Between 5th January 2020 and 19th July 2022 the Applicant supplied critical laboratory services to the Respondent, the value of which amount to $62,403,477. The Applicant has invoiced the Respondent repeatedly as recent as 25th July 2022. There has been no response from the Respondent,” the court documents state.
Not materialized
EML said that for the seven-month period in 2020 that it extended credit and services to Remote MD, it repeatedly notified of the monies owed by way of invoices but was not paid. The last invoice submitted was for the $62.4 million which accounted for accumulated costs over the period. The company then took action to suspend its credit facilities with RemoteMD.
RemoteMD, according to EML, “has made repeated promises to pay, but to date these have not materialized.”
RemoteMD LLC filed for bankruptcy on the 18th of October last year and has asked the Eastern District of Louisiana Court to grant it Chapter 11 privileges to reorganize and keep its business alive. But without the existence of similar legislative privileges in Guyana, local creditors are unsure how they will be able to recoup their debts.
“One medical service provider is owed over $50M, another company nearly double that and there are a number of others…,” a source told the Sunday Stabroek. “As it is, it seems gloomy. We have been trying to contact them for months to discuss settling [their debts] and all to no avail…,” one creditor said. “I am impacted heavily. How this [company], a foreign company with little assets could have racked up all this debt is mind-boggling. Businesses would not have afforded those same privileges to a local company,” a source had expressed.
Having exhausted efforts of their own to get the company to pay its debts, local companies registered their complaints with the Local Content Secretariat but it is also unclear what the Secretariat can do since bonds or security are not required for foreign companies doing business in the oil and gas sector in Guyana.
Outsourced
At the height of the COVID-19 pandemic in 2021, RemoteMD had billed 15 oil services workers US$350 ($70,000) each for a rapid COVID test, far higher than what the local labs were charging and which raised questions again over the expense claims that ExxonMobil and its contractors will likely make as cost oil. An invoice seen by Stabroek News showed that RemoteMD submitted a bill to Gaico Construction on February 19 of 2021 for 15 rapid tests that totalled US$5,250 (just over $1 million). When the company was contacted by Stabroek News, it had justified the cost then, even as it explained that by April of this year it was charging between US$65 ($13,000) and US$85($17,000) per test. In its justification of the US$350 charges, RemoteMD had explained then that it outsourced all lab services to local labs.
Most of the monies owed, according to Eureka’s invoices which it provided as evidence, was for COVID-19 tests for oil and gas workers of the Stabroek Block projects.
Remote MD was using EML to conduct the tests and Eureka charged $25,000 per person.
It would mean that RemoteMD made $65,000 on every 2,000 COVID-PCR tests that it outsourced to Eureka.
‘Limit’
The Georgetown Chamber of Commerce and Industry (GCCI) had warned businesses of the need for due diligence checks before granting credit and says that the lodging of security should be looked at.
“I would advise other companies doing business with companies to limit their credit risk exposure with those companies, especially without any bank guarantee or any kind of security or things like that to hold,” its President, Timothy Tucker, told the Sunday Stabroek in a recent interview.
“We see many companies coming that are doing business with local companies that require us, even when we are doing work for government agencies, we have to provide bid securities and these kind of things. I believe it is something we should start looking for at our end when giving somebody credit. We must have some kind of compliance in terms of a bank guarantee or a letter similar to what is required in the tendering process. It is important that we look at doing business broadly. Not because it is a foreign company we run and readily give them credit without any history,” Tucker added.
