The Tribune

By NEIL HARTNELL

Tribune Business Editor

hartnell@tribunemedia.net

CLICO (Bahamas) liquidator was yesterday accused of “stonewalling” efforts by the insolvent insurer’s Trinidadian affiliate to obtain information relating to its $52 million claim on the winding-up process, forcing it to file a ‘motion for sanctions’ against him.

Documents filed in the south Florida district bankruptcy court yesterday, which have been obtained by Tribune Business, disclose that Colonial Life Insurance Company (Trinidad) is seeking penalties against Craig A.’Tony’ Gomez, the Baker Tilly Gomez accountant and partner, and an order forcing him to hand over information it is seeking in relation to the winding-up of CLICO (Bahamas) and its affiliates.

Colonial Trinidad’s latest legal move is a direct response to Mr Gomez’s June 22, 2012, filing with the same Florida court, in which he sought an Order barring the Trinidadian firm’s document discovery request.

The CLICO (Bahamas) liquidator is also seeking sanctions against Colonial Trinidad, having accused it of “harassment” and submitting “utterly meritless” that were attempting to “circumvent the court proceedings in the Bahamas”. Both demands - those of Mr Gomez and Colonial Trinidad - are set to be heard by the Florida court tomorrow.

Setting out its arguments, Colonial Trinidad alleged in the latest US court filing: “It is with great regret and frustration that Colonial Trinidad is forced to spend unnecessary legal expense and significant time in trying to obtain simple discovery that, quite frankly, should have been forthcoming from both CLICO Enterprises and CLICO (Bahamas) without Colonial Trinidad’s formal service of discovery requests.

“CLICO Enterprises and CLICO (Bahamas) have collectively stonewalled Colonial Trinidad’s numerous attempts to obtain basic information as to the ultimate receipt and disposition of proceeds by CLICO Enterprises from the bankruptcy estate of Wellington Preserve.”

CLICO Enterprises is the wholly-owned, Bahamian-domiciled subsidiary of CLICO (Bahamas), and the entity that Colonial Trinidad is directly claiming $52 million from. Wellington Preserve is the Florida-based real estate project into which CLICO (Bahamas) - via CLICO Enterprises - invested $73 million.

Colonial Trinidad alleged that despite assurances from Mr Gomez’s Bahamian attorney, Simone Morgan-Gomez at Callender’s & Co, and his US counsel, Ronald Neiwirth, not “a single document” had been produced to answer its concerns.

“Instead, CLICO Enterprises and CLICO (Bahamas) have continued stonewalling Colonial Trinidad by improperly filing two motions for protective orders and sanctions with this court,” the Trinidadian affiliate alleged.

“Given their intentional efforts to collectively stonewall Colonial Trinidad, their request for sanctions is, itself, sanctionable.”

Colonial Trinidad alleged the protective orders sought by Mr Gomez and his US attorneys were “entirely without merit”.

This was because it had “contingent claims against the CLICO (Bahamas) estate related to the ultimate disposition of the proceeds obtained by CLICO Enterprises from Wellington”.

The Trinidadian affiliate and its attorneys also alleged that it may have “a contingent claim against the proceeds of the property, or the property itself, in the hands of Wellington to the extent it is successful in its potential claims against CLICO (Bahamas) estate and its liquidator.

“It is axiomatic that disposition of the Wellington proceeds will have a direct effect on the administration of the CLICO (Bahamas) estate.”

Noting that Wellington Preserve had already transferred $10 million generated from sales of its real estate back to CLICO Enterprises, with “additional substantial sums (far in excess of $10 million)” set to follow, Colonial Trinidad said its position as a creditor, contingent creditor and affiliate meant it was “an interested party entitled 0to discover the ‘who, what, when, where, why and how’ in relation to Wellington Preserve’s sales proceeds.

And the Trinidadian company alleged that because Mr Gomez was liquidator for both CLICO Enterprises and CLICO (Bahamas), “it is difficult to determine on whose behalf the liquidator is acting, and which entity’s interests [he] is advancing”.

Detailing its version of how events played out, Colonial Trinidad said it first began investigating its $52 million claim against CLICO Enterprises on May 2, 2012. It said it was directed by Me Neiwirth to speak to Ms Morgan-Gomez at Callender’s & Co.

“On May 4, 2012, Colonial Trinidad learned for the first time about the proposed sale of Wellington’s assets that would result in a distribution to CLICO Enterprises,” the Trinidadian company alleged.

After five days of attempting to make contact, Colonial Trinidad said its attorneys finally spoke with Ms Morgan-Gomez.

“After a long, frustrating and circuitous conversation, Ms Morgan-Gomez advised that the liquidator [Mr Gomez] has not provided any notice to CLICO Enterprises creditors or received any direction from them because they do not exist,” Colonial Trinidad alleged.

They did not ‘exist’ because Mr Gomez had yet to send out requests for ‘Proof of Claims’ against CLICO Enterprises. In the meantime, the $10 million Wellington Preserve sale closed.

“On May 25, 2012, after nearly three weeks of non-stop, repeated requests for information from the liquidator as to the status of Wellington’s closing and disposition of the proceeds, counsel for CLICO Enterprises’ liquidator sent Colonial Trinidad’s counsel a letter advising that the liquidator published a call for proofs on Saturday, May 19, 2012,” Colonial Trinidad alleged.

“It is important to note that the proceeding in the Bahamas was pending for at least three years before the liquidator published a ‘call for proof’.”

By early June, Colonial Trinidad had come to the conclusion it was being “stonewalled”, and the protection sought by Mr Gomez was “the first time” it learned that its CLICO Enterprises claim may be in trouble.

It alleged that as CLICO Enterprises’ sole equity owner, CLICO (Bahamas) could have “potential liability from the wrongful dissipation of the Wellington proceeds”, giving it a contingent administrative expenses claim against the Bahamian insurer and “a material stake” in the winding-up.

Mr Gomez, as liquidator for Wellington Preserve, CLICO Enterprises and CLICO (Bahamas), was administering “insiders with competing claims”.

And Colonial Trinidad alleged further: “As one of only two alleged creditors of CLICO Enterprises, Colonial Trinidad has a pecuniary interest in the Wellington proceeds already transferred to CLICO Enterprises by Wellington and the post-con formation proceeds Wellington is required to transfer pursuant to Wellington’s plan of liquidation.”