The Tribune

By NEIL HARTNELL

Tribune Business Editor

The liquidation of the Florida real estate development that accounts for 63 per cent of CLICO (Bahamas) assets continues to gather momentum, the liquidator and his agents having clinched a “significant” 15 per cent increase in the per acre price for their latest sale.

Court documents obtained by Tribune Business from the south Florida district bankruptcy court show that Craig A. ‘Tony’ Gomez, the Baker Tilly Gomez accountant and partner, has signed a sales agreement for a 41.6-acre tract at Wellington Preserve that will fetch $4.733 million - monies that will be remitted to the Bahamas for the benefit of the insolvent insurer’s creditors.

Ronald Neiwirth, the US attorney for Mr Gomez, told Tribune Business that the CLICO (Bahamas) liquidator had managed to increase the per acre sales price from the “just under” $100,000 he achieved on his first two Wellington Preserve deals to $115,000 in this deal.

“This one is for a significant uptick in the price per acre, which I think is nice,” Mr Neiwirth told Tribune Business. “It’s another 41 acres, and the price per acre went up to $115,000, which is a significant uptick.

“The first parcel that was sold, and the second one, were both sold for just under $100,000. It’s a step in the right direction.”

The latest deal means that Messrs Gomez and Neiwirth, together with their Florida real estate broker, are making starting to make good on the attorney’s statements to Tribune Business last week, where he indicated the per acre sales prices for the remaining 283 acres at Wellington Preserve were likely to increase - due both to their sales strategy, and an improving Florida real estate market.

The latest deal means that, together with the initial $10 million already returned to the Bahamas, collectively some $14.733 is now available to Bahamian policyholders and creditors of CLICO (Bahamas).

The court papers, filed in Florida on May 25, 2012, revealed: “The debtor [Wellington Preserve] has now executed a new PSA (sales agreement) with Symon V. Garber, subject to court approval and to 30 days’ due diligence period.

“The proposed sale involves approximately 41.16 acres at a price of $4,733,400.00; subject to adjustment for the precise acreage to be calculated by a surveyor. Assuming that the proposed Garber sale closes, the debtor will still have about 242 acres left to sell.”

As a result, Mr Gomez and his attorneys are seeking further amendments to the US court-approved plan for liquidating Wellington Preserve, which include authorisation to enter into and close the latest $4.733 million transaction.

And they are also seeking permission to “continue to market the remaining 242 acres of land whether as one parcel or as several; to conclude the sale thereof with reasonable dispatch; and remit the entire net proceeds thereof, after direct closing costs, costs of operating the Homeowners’ Association, administrative expenses, and appropriate provision for taxes, if any, to the liquidating Estate of CLICO Enterprises, Nassau, Bahamas, as partial payment of principal on account of CLICO Enterprises’s allowed [$73 million] unsecured claim”.

In an interview with Tribune Business last week, Mr Neiwirth said the CLICO (Bahamas) liquidation team was hoping to recover "considerably more" than $40 million from the liquidation of Wellington Preserve, with "huge interest" having been expressed in its remaining 283 acres.

With Florida real estate prices rising and smaller parcel sizes increasing the per acre yield, the Wellington Preserve recovery prospects for Bahamas creditors looked "far better now than they did six months ago".

Explaining that the CLICO (Bahamas) liquidation team had initially targeted $40 million as the "break point" in terms of what was recovered for the insurer's Bahamian creditors, Mr Neiwirth said more from the initial $13.384 million sale would be returned to this nation.

Mr Gomez and Mr Neiwirth sold the first 138.3-acre tract at Wellington Preserve for that price, but only $10 million of that sum has been initially returned to the insolvent insurer's Bahamian subsidiary, CLICO Enterprises, with the remainder "held back in reserve" for the moment.

“The bottom line is that if we sold 138.3 acres for $13.384 million, we have 283 acres left to sell, which is about twice as much. That first $10 million is also not all they [CLICO Enterprises] will get, as some has been held back in reserve,” Mr Neiwirth said.

“Therefore, the bottom line is that recovery could exceed $40 million. If it's broken into smaller pieces, it could be done. It could be done because we'll make the buyers pay a higher per unit price for the smaller parcels."

CLICO Enterprises, the vehicle through which CLICO (Bahamas) invested funds into Wellington Preserve, is owed some $73 million by the Florida-based real estate project. A $40 million recovery would mean about 55 per cent of the total sum owed returns to the Bahamas.

“That was our intention in the beginning to hit that break point. Our intention was always to get up that far," Mr Neiwirth told Tribune Business of the $40 million goal.

“Things are working out very nicely. The liquidator's decision to break up Wellington Preserve into small pieces to get higher prices, rather than sell it wholesale in big chunks, was a great business decision, and I felt it was a well-founded one."

Mr Neiwirth added that there was "considerable interest" from buyers in Wellington Preserve's remaining real estate, with the liquidation team's broker going "full speed" to wrap up the sale of the remaining 283 acres.

"She's talking to people about everything bar five acres in the corner," he said. "It seems to be going well. I spoke to Mr Gomez yesterday, and he's pleased there are returns now being provided to the Bahamas."

Asked about how favourable the Florida real estate market, and its prices, were to maximising recovery for Bahamian creditors, Mr Neiwirth added: "I like it far better now than I did six months ago.

"It is considerably improved. We hit the bottom of the market, and it's now coming back nicely."