The Tribune

By NEIL HARTNELL

Tribune Business Editor

CLICO (Bahamas) liquidator has agreed a $13.267 million deal to sell one-third of the remaining land at the insolvent insurer's main asset, having enticed back a former prospective purchaser who pulled out of a much larger deal.

Documents filed with the US Bankruptcy Court in southern Florida, which have been obtained by Tribune Business, show that Craig A. 'Tony' Gomez, the Baker Tilly Gomez accountant and partner, has signed a sales agreement that would dispose of almost one-third of the remaining real estate at Wellington Preserve, the development that accounts for 63 per cent of CLICO (Bahamas) total assets.

The agreement with an entity known as J-5 will see Mr Gomez and Wellington Preserve dispose of some 138.3 acres for $13.267 million, fetching a price per acre of $96,000. That leaves some 283 acres remaining for sale, and Tribune Business reported last week that Mr Gomez was in discussions with various parties for their disposal, too.

The significance of the latest J-5 transaction, if it can be successfully closed, is that the $13.267 million - or at least most of it - represents the first funds available from Wellington Preserve for repatriation to the Bahamas, where it can be used to satisfy CLICO (Bahamas) Bahamian creditors and policyholders.

The initial $10 million raised from selling a 103-acre Wellington Preserve tract was used to satisfy US creditors, meaning that not a cent came back to the Bahamas. J-5 had previously withdrawn from purchasing all the remaining 421 acres in a $40 million deal, but its re-negotiated deal - $13.267 million for 32.9 per cent of the remaining property - is for pretty much the same per acre price as the original larger transaction.

If Mr Gomez achieves a similar per acre price for the remaining 283 acres, it is possible that somewhere close to $40 million could be recovered for the benefit of CLICO (Bahamas) Bahamian creditors.

The insolvent insurer owns Wellington Preserve through its 100 per cent, wholly-owned Bahamian subsidiary, CLICO Enterprises. An April 12, 2012, court filing by Mr Gomez and his US attorney, Ronald Neiwirth, urged the Florida court to "expedite" approval of the J-5 transaction and a related real estate deal, and the inevitable amendment to Wellington Preserve's Chapter 11 reorganisation plan that this would create.

"The motion is unopposed, as the only creditor remaining unpaid, CLICO Enterprises, consents to the relief sought," Mr Gomez and his attorneys said. The urgency was necessary, they argued, because J-5 was seeking a deal closing "as soon as possible, due to the development and site work which it requires to be ready for next polo season".

Recalling the background to the deal, Mr Gomez and his attorneys recalled how J-5 "elected to withdraw its due diligence and its conditional deposit was returned" over the previously contemplated $40 million deal.

"Now, through the efforts of [Mr Gomez] and his broker, J-5 has returned, albeit to purchase a portion of the remaining property rather than all of it," Mr Gomez and his attorneys said. "It has executed a new preliminary sales agreement, with a deposit of $1 million, subject to court approval. There is no due diligence requirement."

Calling on the US court to permit changes to the original Chapter 11 plan and allow the new deal to be substituted for the old, the court papers confirmed: "The [Wellington Preserve] has already sold approximately 103 acres in a separate transaction, leaving about 421 acres to be sold.

"The collective total for which approval is now sought is 138.3 acres to J-5, for a price $13.267 million cash, plus the contractual sharing of liability for the cost of various developers' responsibilities. This will leave about 283 acres unsold, while the marketing effort to liquidate the remainder continues."

In a separate filing, Mr Gomez and his attorneys confirmed that J-5 had agreed to pay about one-third of the costs related to those "developers responsibilities".

The two, J-5 and Wellington Preserve, are sharing the costs associated with "certain anticipated developer and development-related tasks and expenses, which will be of benefit to the reorganised debtor, which otherwise would have to undertake the task and bear those expenses alone".

The sales agreement, which has been seen by Tribune Business, says the seller, namely Wellington Preserve/CLICO Bahamas, would "be responsible for 66.8 per cent of the project costs", with J-5 taking on the remaining 33.2 per cent.

In an interview with Tribune Business last week on efforts to sell Wellington Preserve, 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."

He added: "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.

"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.

"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."