The Tribune

By NEIL HARTNELL

Tribune Business Editor

THE US courts have approved another restructuring of the property that accounts for 63 per cent of insolvent insurer, CLICO (Bahamas), main asset to facilitate a deal that could see $13.267 million returned to the Bahamas for the benefit of its local creditors.

Documents obtained by Tribune Business from the US bankruptcy court in south Florida revealed that the court, on April 25, 2012, approved the latest Wellington Preserve restructuring and sale of 138.3 acres, approximately one-third of its remaining 421 acres.

Judge Erik Kimball, in his Order, noted that Wellington Preserve's creditors had already been paid in full "with the sole exception of CLICO Enterprises, [which holds] an allowed unsecured claim in the amount of $73 million".

CLICO Enterprises' is CLICO (Bahamas) 100 per cent wholly-owned subsidiary, which acted as the holding company for the Wellington Preserve project and main conduit through which monies flowed from the Bahamas into the latter.

The $13.267 million sales price achieved for one-third of Wellington Preserve's remaining acreage by Craig A. 'Tony' Gomez, the Baker Tilly Gomez accountant and partner, indicates that he is likely to generate around $40 million for the benefit of Bahamian creditors. That sum is 54.8 per cent of the $73 million CLICO Enterprises is owed.

Judge Kimball recalled: "[Wellington Preserve's] Second Amended Plan of Liquidation was confirmed by this Court on May 12, 2011. That liquidating Plan contemplated a series of three real estate transactions, two of which closed and one of which did not.

"The one which did not close was the proposed sale of approximately 421 acres, or all of [Wellington Preserve's] remaining land and development rights, to J-5 Wellington Preserve LLC. J-5 withdrew, as it was permitted to do, during its due diligence period."

Fast forwarding to the present, the Judge Kimball added: "Now, J-5 has returned, with a more modest offer for 138.3 acres, for a price of $13.267 million subject to adjustment for the precise acreage, and further subject to the fact that J-5 has agreed to provide additional benefit to the Estate by sharing the burden with [Wellington Preserve] of certain development-related costs and expenses pertaining to the project as a whole.

"In addition, in the new Purchase and Sale Agreement with J-5, [Wellington Preserve] has also entered into a further PSA [sales agreement] with entities related to the Tanen family.

"As part of the original confirmed Plan, the Tanen family had entered into a PSA for certain exchanges with the Debtor, in order to allow the consolidation of a 103-acre parcel of land to be sold. Now, the Tanens have entered into a further PSA in order to once again assist [Wellington Preserve] by realigning the unsold lots into a more favourable configuration, consistent with the New J-5 PSA, and with ongoing negotiations to sell the remainder of the available land."

Judge Kimball approved both transactions, and changing the liquidation plan for Wellington Preserve.

In a previous interview with Tribune Business on efforts to sell Wellington Preserve, Ronald Neiwirth, Mr Gomez's US attorney, 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."