The Tribune

By NEIL HARTNELL

Tribune Business Editor

CLICO (Bahamas) liquidation team is "hoping to exceed" original projections of a total $50 million recovery from the insolvent insurer's main asset, due to a combination of a "strengthening" Florida real estate market and revised selling strategy.

Ronald Neiwirth, the US-based attorney for Craig A. 'Tony' Gomez, the Baker Tilly Gomez accountant and partner who is CLICO (Bahamas) liquidator, yesterday disclosed to Tribune Business that they were in "active negotiations" with five potential purchasers of real estate at the Wellington Preserve development, having decided to break it up into "medium sized or large" parcels.

Adding that the Florida real estate market and prices were "improving", something set to further aid Mr Gomez in maximising recovery for CLICO (Bahamas) policyholders/creditors from the investment accounting for 63 per cent of the insurer's total assets, Mr Neiwirth also confirmed that the US courts had approved Wellington Preserve's $1 million settlement with the Internal Revenue Service (IRS).

Documents obtained by Tribune Business from the US Bankruptcy Court for the southern district of Florida show the court approved the IRS 'unsecured priority claim' of $521,247, and 'Class 3 unsecured claim' of $478,752, against Wellington Preserve.

Mr Gomez, as Wellington Preserve's representative, was "authorized and directed to make payment in full" of the $1 million in the next 30 days.

As previously disclosed by Tribune Business, the IRS settlement frees up some $600,000 that Mr Gomez had to set aside as a contingency, which can now be used to cover various expenses associated with maintaining Wellington Preserve. The $1 million is also some $500,000 less than the IRS had originally claimed, so the deal saves CLICO (Bahamas) - and its creditors - some $500,000-$600,000.

Mr Neiwirth explained to Tribune Business that the settlement "resolves all issues we had with the IRS up to May 2011. It wasn't just 2005-2006 sorted out; everything was".

As a result, once the $1 million is paid, the deal "will take them out of our lives. We expect that will be the end of the IRS issue," Mr Neiwirth said. "With them out of the way, we can concentrate on selling the rest [of Wellington Preserve] and repatriating the money back to the Bahamas."

Asked by Tribune Business how efforts to sell the remaining 425 acres at Wellington Preserve were going, the outcome being key to the recovery for CLICO (Bahamas) creditors, Mr Neiwirth said: "The activity has been much greater. There are active negotiations with about five parties right at the moment.

"The market is improving. The average price per acre being negotiated is above the first chunk sold, and that closed for $10 million for 103 acres. It's nice when you weather the storm and the market is going up."

That initial $10 million was used to settle with Wellington Preserve's US-based creditors, and pay costs associated with the project's Chapter 11 bankruptcy restructuring, meaning that whatever is raised from selling the remaining 425 acres should largely come back to the Bahamas.

"When we confirmed the [Chapter 11 restructuring] plan, we thought what we had on the table was $10 million for one piece, and $40 million for the other," Mr Neiwirth told Tribune Business.

"That dropped down to $32.5 million, and we had a couple of offers less than that, which we ignored. The price is coming back up, so we're hoping the end result meets or exceeds what was in the original plan. But there's still too many contingencies to come out hard and say this is what it's going to be."

And he added: "The liquidator has been very careful about it, and the big business decision to break it [Wellington Preserve] up, neither into small lots or go all wholesale, but breaking it up into medium-sized lots or larger, seems to be working."

Aiding this strategy, Mr Neiwirth said, was the decision by existing Wellington Preserve owners to "realign some lots to enable people to bundle several parcels together for polo fields". This was what the project was initially designed as, an equestrian/polo-related development, with buyers putting barns, paddocks and playing fields together in seamless plots.

"Part of what we're doing is lining up the lots," Mr Neiwirth added.