The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The registered agent for the two corporate shareholders of CLICO (Bahamas) main subsidiary refused to disclose their beneficial owners to the insolvent insurer’s liquidator unless he received permission to do so from their ultimate principal in Trinidad, Tribune Business can reveal.

US court documents, obtained by Tribune Business, disclose that Craig Gomez, the Baker Tilly Gomez accountant and partner, was forced to “cut the Gordian Knot” that tied Mayco and Nardco to CLICO Enterprises as its shareholders.

The transcript from a US court hearing, which granted Mr Gomez ‘protection’ from discovery demands related to a Trinidadian affiliate’s purported $52 million claim against CLICO Enterprises, reveal how the liquidator was ‘stonewalled’ in his attempts to pierce the latter’s ‘corporate veil’.

According to Ronald Neiwirth, the US attorney for Mr Gomez, the Bahamian registered agent, Serville & Company, refused to reveal the beneficial ownership of Mayco and Nardco - and whether CLICO (Bahamas) owned CLICO Enterprises - without obtaining permission to do so from the companies’ Trinidadian principal, Lawrence Duprey.

And Mr Neiwirth disclosed that he had located 65 US-based companies with possible connections to CLICO (Bahamas) and Mr Duprey, a task that had required him to obtain 40 boxes of documents.

“It’s always been the liquidator’s position that he is unaware whether CLICO (Bahamas) owns CLICO Enterprises because the registered agent in the Bahamas couldn’t confirm the ownership,” Mr Neiwrith said in a court transcript, which has only just been made public.

“Initially, Mr. Gomez, the liquidator for CLICO (Bahamas), thought that CLICO (Bahamas) was the parent company because CLICO (Bahamas) and CLICO Enterprises were filing what we would call joint tax returns.

“When he went actually to check the ownership with the registered agent, which is apparently how they do these things over there, the registered agent said, no, CLICO (Bahamas) does not own CLICO Enterprises, and to tell you any more I have to take instruction from Mr. Lawrence Duprey, who is the chairman of all of the companies upstreamed back to CL Financial in Trinidad and Tobago.”

Due to Serville & Co’s refusal to disclose the nature of CLICO Enterprises’ true ownership, Mr Neiwirth said Mr Gomez was forced to “more or less cut that Gordian Knot by simply filing the equivalent of an involuntary bankruptcy against CLICO Enterprises and putting it into liquidation that way”.

Getting control of CLICO Enterprises was vital for Mr Gomez and a successful liquidation of the insolvent life/health insurer, as it was the entity that received some $73 million from CLICO (Bahamas).

CLICO Enterprises was thought to have been a 100 per cent-owned affiliate of CLICO (Bahamas), but to-date this has been impossible to prove.

The court transcript also revealed the extensive connections between the Bahamas and Mr Duprey’s Florida interests, Mr Neiwirth telling the US Bankruptcy Court for Florida’s southern district that he had identified 65 companies linked to the CL Financial principal.

“We identified more than 65 different entities here in Florida that we were pursuing information about that were connected in one way or another back through to Mr Duprey, and arguably to CLICO (Bahamas), and we had to work our way through an awful lot to do that,” Mr Neiwrith said.

“I have 40 boxes of documents that I’ve gotten by subpoenaing banks while I was chasing my 65 different entities around.”

The outcome of the hearing was that Mr Neiwrith and Mr Gomez got the protection they were seeking against discovery demands made by CLICO (Bahamas) affiliate, Colonial Trinidad.

The Trinidadian company had demanded that the US court force Mr Gomez to hand over a slew of documents relating to CLICO (Bahamas) and CLICO Enterprises, plus the Wellington Preserve real estate project, in a bid to further its alleged $52 million claim against Enterprises.

Its motion to ‘compel’, though, was denied by the south Florida bankruptcy court, which instead granted Mr Gomez’s request for a final decree confirming that Wellington Preserve’s Chapter 11 bankruptcy case was now closed.

Mr Neiwirth previously told Tribune Business. “What the court ruled was what I argued; that they [Colonial Trinidad] didn’t have standing to fight a Bahamian battle in the US courts, and even if they did, what they were asking was beyond the scope of Rule 2004.”

Messrs Gomez and Neiwirth had previously alleged that Colonial (Trinidad’s) request was “utterly meritless” and an attempt to “circumvent” the CLICO Enterprises liquidation process in the Bahamas. That process has now started, Mr Gomez having issued a call for proof of claims.

Countering this, Colonial (Trinidad) had alleged that the liquidator was “stonewalling” its requests for information, and that as a CLICO Enterprises creditor it had a right, and standing, to know how the multi-million dollar proceeds from real estate sales at Wellington Preserve were being used once sent to the Bahamas.