The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

City Markets workers have yet to receive their severance pay and benefits because the $3.5 million sale of the former supermarket chain’s leasehold interests has still to formally conclude, Tribune Business was told yesterday.

Mark Finlayson, principal of City Markets’ 78 per cent majority shareholder, Trans-Island Traders, told this newspaper that the payment from Super Value owner, Rupert Roberts, was still held in an escrow account as attorneys for both sides continued to complete paperwork associated with the deal.

Suggesting that the attorneys were “having a whale of a time”, Mr Finlayson said he - and between 200-300 former City Markets staff - were together “stuck” in receiving what was owed to them until the deal closed and the escrowed payment was released.

He blamed the delay on issues stemming from City Markets’ 2006-2010 ownership by BSL Holdings.

While not identifying them, Mr Finlayson hinted they may have been overlooked in BSL Holdings’ rush to conclude the November 2010 deal that sold City Markets’ majority shareholding to Trans-Island Traders for just $1.

While it is uncertain whether former City Markets’ staff will heed Mr Finlayson’s call for further patience, given that “we are all stuck in the same boat”, the Trans-Island principal reiterated that he and Mr Roberts were both determined to close the deal.

And, wearing his hat as a trustee for City Markets’ employee pension fund, Mr Finlayson disclosed to Tribune Business that a deal to sell the supermarket chain’s former East-West Highway head office to Lightbourn Trading had fallen through.

The head office is the pension fund’s main asset, and its conversion into liquid cash via a sale will enable it to meet all its obligations to pension beneficiaries.

Mr Finlayson said the offer by the Bahamian wholesaler had been unacceptable because it was too low, adding that he and the other trustees were now in talks with “a very significant buyer”.

“We’re working on it. We’ve got all the lawyers involved with it,” Mr Finlayson said yesterday, when asked about the status of efforts to get the former staff their due compensation.

“Because we closed [with BSL Holdings] within a few days in 2010, there was a lot of stuff, a lot of gaps, that were left as a result of doing that. It was a number of legal steps we should have gone through; we went through ours, I don’t know if they went through all of theirs when we did the deal.

“As a businessman, at the beginning I thought: ‘This is simple, this is straightforward’. It’s not as simple and straightforward as I thought it was.”

Trans-Island’s attorneys are Knowles and Mackey, while Mr Roberts is using R. James Cole at Higgs & Kelly. BSL Holdings’ attorneys are Graham, Thompson & Co.

He added: “Our lawyer and Mr Roberts’ lawyer have had a whale of a time, and BSL Holdings’ lawyers have been very co-operative in working well with both sides’ lawyers to see if they can try and get all the ‘i’s’ dotted and the ‘t’s’ crossed.

“We’re all basically stuck. Mr Roberts has had his monies in escrow for all these months, and we’ve not been able to do anything until all is said and done. That has left everything up in the air.”

Mr Roberts has already opened the former City Markets store at Cable Beach under the Quality Supermarkets brand, and plans to do the same with the now-defunct chain’s South Beach and Seagrapes Shopping Centre locations. This indicates that, at least from Mr Roberts’ side, the acquisition of those leasehold interests has closed.

“Mr Roberts and his family have been very good; they could have walked away from the deal a little while ago,” Mr Finlayson told Tribune Business.

“They’re determined to complete, we’re determined to complete, and once we get that out of the way we can sit down with the employees and clear everything.”

Asked what he would say to former City Markets staff, Mr Finlayson added: “Like us, it’s one of those situations where we have to be patient with it.

“I know it’s tough, but we’re all in the same boat, and we’re all got to wait until the lawyers finish what they’ve got to do.”

As for the City Markets staff pension fund, Mr Finlayson said he and the other trustees had paid out 20 per cent of what was owed to qualifying beneficiaries within the past six-eight weeks.

Payments were made via the beneficiaries’ attorneys, creating a two-three week time lag between release and receipt of the monies, he suggested.

“We did what we could based on what the trust allows us to do to bring some relief to people,” Mr Finlayson told Tribune Business.

“We’re working on the sale of the head office building. Lightbourn Trading are out. They put us in a position, as trustees, where we couldn’t accept their offer as it was much too low. Legally, we couldn’t accept the offer.”

The East-West Highway property would likely fetch a multi-million dollar sum, and its liquidation at a true price is key to paying out pension beneficiaries 100 per cent of what they are owed.

The building was conservatively valued in City Markets’ last accounts, using a price below appraisal value, and Mr Finlayson said: “We’re working with a very significant buyer, and we are very positive that it will end in the sale of the building.”

Declining to put a timeline on any potential sale, he added: “We’re pretty confident the trust will be able to meet all its obligations.

“The assets of the trust are more than enough to satisfy all the obligations, and we will satisfy them.”

After the head office sale and meeting all its immediate obligations to pension fund beneficiaries, Mr Finlayson said it was still uncertain whether the trust would then be wound-up.

He added that the trustees still might have obligations to the beneficiaries, especially if surplus assets were left, and other legal matters to attend to.