The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The owner of Freeport’s Circle Mall yesterday described the Supreme Court’s decision to “dismiss” an application to place it into court-appointed receivership as “my birthday present”.

Hannes Babak, president of L. T. Investments, the holding company for the shopping complex, told Tribune Business that his attorneys had managed to secure the “complete dismissal”of CIBC FirstCaribbean International Bank (Bahamas) bid to place it into a court-supervised receivership.

“I don’t really understand why they made the application, but the application was denied,”Mr Babak said.

“It [the hearing] went very well, because it was dismissed. It was completely dismissed, and the bank will have to pay costs. I feel very good, very relieved, and it was my birthday present.”

Mr Babak was yesterday celebrating his actual birthday, and added: “I’m very happy that Harvey Tynes Qc and Ntshonda Tynes got this result.

“Now, instead of receiverships, I can focus on business at the Mall; to further the business; better the business, and keep on working.”

However, sources close to CIBC FirstCaribbean suggested to Tribune Business last night that the Circle Mall situation was more nuanced than it appeared.

While agreeing that the Supreme Court had refused to grant the Orders the bank was seeking, which would have made receivership subject to the court’s control, the sources suggested a receiver had already been appointed for the Circle Mall under the mortgage deed powers held by CIBC FirstCaribbean.

In this scenario, while the court-appointed receivership was indeed refused yesterday, the receiver appointed under the mortgage deed was not removed and remains in place.

It all paints a potentially confusing picture for the Circle Mall and its 45 retail tenants, although any receivership would not directly affect them.

L. T. Investments is the company that owns the West Atlantic Drive/Baffin Circle building which houses the Circle Mall, but CIBC FirstCaribbean International Bank (Bahamas) moved to appoint a receiver due to an alleged default in repaying the mortgage loan that is secured on the Circle Mall building.

That loan will have financed the property’s construction, and been secured on the underlying assets - namely the building. It is understood the sum involved is around $4 million.

CIBC FirstCaribbean’s action adds a new twist to recent events at the Circle Mall, and potentially further complicates a variety of issues involving receiverships and alleged non-payment of due obligations.

Tribune Business revealed last week how a major tenant of Mr Babak, Butler’s Food World, was trading accusations with its former receivers, who had been appointed via a Supreme Court action initiated by the Circle Mall owner.

Mr Butler alleged that the store’s former court-appointed receivers, HLB Galanis principal Philip Galanis and Chris Baker, had “no idea what they were doing” and effectively ran the business into the ground during the five months they had control.

He is threatening to sue the former receivers to recover the alleged losses his company suffered during those five months, plus money the receivers had taken out in fees.

The Supreme Court-ordered receivership of Butler’s Food World was overturned last Thursday on a legal technicality, Justice Estelle Gray-Evans finding that attorneys acting for Mr Babak had failed to disclose their failure to properly serve Mr Butler’s counsel.

As a result, it is possible that Mr Butler may also seek to recover the alleged losses from Mr Babak, given that the receivers should never have been appointed in the first place.

Mr Babak yesterday said he had made no decision on the Butler’s Food World situation, due to “concentrating” on the CIBC FirstCaribbean situation.

In response, to Mr Butler, Mr Galanis previously told Tribune Business that it was Mr Butler - not the receivers - who had “run it into the ground”.

Alleging that he and Mr Baker inherited “a shambles” after they took control on September 6, 2012, Mr Galanis said they took over unpaid bills such as a $400,000 sum owed to Grand Bahama Power Company, plus over $120,000 in unpaid rent due to Mr Babak.

And Mr Galanis told Tribune Business that Butler’s Food World would have been in even worse straits had the receivers taken out the fees due to them, and said they planned to sue Mr Butler to recover what was owed.

For his part, Mr Babak had alleged that Mr Butler and his company owed him “around $250,000”.

He added that he could have sought to put Butler’s Food World and its parent, Harbour Lobster and Fish Company, into liquidation or evicted them from his building, but chose receivership as the “most humane” option to avoid making around 100 Bahamians unemployed.