The Tribune

By NEIL HARTNELL

Tribune Business Editor

Attorneys for the Trinidadian affiliate of CLICO (Bahamas) are seeking to examine liquidator Craig A. ‘Tony’ Gomez, in what was yesterday described as a bid to prevent the $10 million recovered to-date from its main asset being “upstreamed for the benefit of Bahamian policyholders”.

Documents filed on Wednesday in the south Florida district bankruptcy courts, which have been obtained by Tribune Business, disclose that Colonial Life Insurance Company (Trinidad) and its attorneys have issued a subpoena to examine Mr Gomez, the Baker Tilly Gomez accountant and partner, under oath on June 26, 2012.

They are also seeking, by June 12, 2012, a variety of documents involving CLICO (Bahamas) and its wholly-owned subsidiary, Bahamian-domiciled CLICO Enterprises, plus Wellington Preserve, the Florida-based real estate project that accounts for 63 per cent of the former’s total assets.

In particular, the Trinidadian company and its attorneys are after all documents relating to a $52.573 million promissory note signed between itself and CLICO Enterprises on December 31, 2001, which was supposed to mature at year-end 2008. It is looking for documents on how the two Bahamian companies used the loan subject to the promissory note.

Elsewhere, it is also seeking documents detailing how CLICO Enterprises decided to place itself, and its $73 million claim, behind all others in relation to Wellington Preserve’s bankruptcy.

And Colonial Life Insurance Company (Trinidad) also wants information on all offers received for Wellington Preserve’s real estate, plus details of any transfers of the sum recovered from the project to-date to third parties.

Finally, the Trinidadian company and its attorneys are seeking copies of all documents and communications between the insolvent Bahamian insurer and its affiliates over how the initial $10 million recovery from Wellington Preserve, which has already been returned to the Bahamas for the benefit of creditors, has been used.

Mr Gomez is gagged from speaking on the CLICO (Bahamas) liquidation by the Bahamian Supreme Court, while his US attorney, Ronald Neiwirth, did not return Tribune Business’s phone message seeking comment before last night’s press deadline.

However, sources close to the latest development said the subpoena and examination were tied to the $52.572 million owed to Colonial Life Insurance Company (Trinidad) by CLICO Enterprises.

They explained that the Trinidadian company was effectively trying to position itself at the front of the creditor queue on CLICO Enterprises, ensuring its multi-million debt was paid out first, by preventing any funds recovered from Wellington Preserve being ‘upstreamed’ to CLICO (Bahamas).

Such action does not benefit Bahamian policyholders and creditors, Colonial Life Insurance Company (Trinidad’s) interest having been aroused after CLICO Enterprises recovered its first $10 million via a $13.284 million sale at Wellington Preserve.

One source said: “The money leaves Wellington Preserve and goes into CLICO Enterprises. They’re trying to make sure none of the money leaves CLICO Enterprises and goes into CLICO (Bahamas).

“Colonial Life Insurance Company (Trinidad) is a creditor of CLICO Enterprises, and they want to make sure they’re satisfied before any money is upstreamed into CLICO (Bahamas). They’re trying to make sure none of the money is upstreamed for the benefit of Bahamian policyholders.”

Tribune Business was told, though, that Colonial Life Insurance Company (Trinidad) had always been recognised as a CLICO Enterprises as a creditor ever since it made a claim on the promissory note, which paid a 12 per cent interest coupon.

Effectively, sources said its bid to ensure that no money, apart from liquidation fees, was upstreamed to CLICO (Bahamas), was unnecessary because its claim was already recognised.

“They’re trying to pick a fight that’s not necessary. The liquidator [Mr Gomez] will fight it, first in the US,” one observer said.

Elsewhere, the US bankruptcy court has approved the further change to Wellington Preserve’s reorganisation plan to facilitate the sale of a further 41.16 acre tract to Symon Garber for $4.733 million.

“The court notes that all pre-petition creditors have been paid in full, with the sole exception of CLICO Enterprises, the parent company of [Wellington Preserve], holding an unsecured claim in the amount of $73 million. CLICO Enterprises has received a payment on account of $10 million,” the court order said.

It also approved that the remaining 242 acres at Wellington Preserve “be marketed and sold with all deliberate speed, with the net proceeds, after administration expenses, direct closing costs and provisions for taxes, if any, to be paid to CLICO Enterprises on account of the principal of its allowed claims.”