The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

FORMER City Markets employees have “outright” rejected a $1.4 million severance pay offer, a group spokesman said yesterday, telling Tribune Business their attorneys plan to challenge a debenture which effectively makes the Finlayson family-owned majority shareholder the primary creditor.

Wanslaw Turnquest, former chief inventory control officer at the defunct supermarket chain, said the $1.4 million severance offer was made shortly before the Christmas holiday.

He added, though, that with the food store chain having closed down some nine months ago, its former employees were no longer accepting partial payments and have planned a “massive” demonstration when the House of Assembly re-opens next Wednesday.

“They wanted to have a vote at the Ministry of Labour to ask the employees if they would accept partial payment,” Mr Turnquest said of the Finlayson family, who held a majority 78 per cent stake in City Markets via their Trans-Island Traders company.

“We are not going to accept partial payment. We are rejecting that. That offer as made shortly before Christmas. We are having a massive demonstration at the opening of Parliament downtown next Wednesday.

“We are officially and outright rejecting the offer of $1.4 million for the severance matter. I have spoken to all the employees, and seeing that it is nine months since the company has closed we are no longer accepting a percentage of the severance; we want all of it.”

Mr Turnquest said the total severance pacakage for the 350 former employees of City Markets should be around $4.3 million.

“You have $2.8 million for managerial staff and $1.8 million for the line staff. We have a very unique situation where the persons who were out on reduced hours from August of 2011 were constructively dismissed, based on the labour laws. We are still hoping that those persons that left prior to the closure of the company still have a severance package based on the laws of this country,” said Mr Turnquest.

“What should be there is actually $4.3 million. We want to make everyone aware that the labour laws of the country need to be fixed or amended.  We are going back to court to ask the judge to immediately execute the $2.8 million, which an injunction awarded to non-managerial staff.

“The employees didn’t receive any money over the Christmas period. We thought that was an insult and against all ethical standards and practices in the Bahamas. It is a blatant disregard for the rule of law.”

  Mr Turnquest said attorneys for the former employees also planned to challenge a debenture that effectively makes Trans-Island Traders the primary creditor of City Markets and its operating parent, Bahamas Supermarkets.

This places Trans-Island Traders, and the Finlayson family, at the head of the creditiors’ queue, giving them first call on the company’s remaining assets.

Tribune Business has obtained documents showing that Trans-Island Traders effectively holds two debentures that were secured on the underlying “fixed and floating” assets of Bahamas Supermarkets/City Markets.

Both were lodged with the Registry on September 9, 2011. The main one, dated September 23, 2012, was a $12 million debenture or ‘loan advance’ from Trans-Island to Bahamas Supermarkets to provide “working capital”.

This relegated a previous July 1, 2011, $2 million debenture, again secured in favour of Trans-Island, to second place.

The documents show that the money invested into City Markets by the Finlayson family - at least $14 million of it - was in the form of debt, not equity, positioning them as preferential creditors should the company fail.

The debentures were lodged for recording by Chancery Law Associaties, the law firm then-representing the Finlaysons, which was headed by now Cabinet Minister Jerome Fitzgerald.

Mr Turnquest said: “BSL is mortgaged out to Trans-Island Traders. The primary [creditor] is Trans-Island Traders.

“We have to ask the court to look into the action that took place on June 9, 2011, a mortgage agreement between BSL and Trans Island-Traders which made them the primary [creditor].

“That’s a major document that has to be looked at with a microscope and analysed to determine whether there was any intent to evade any financial obligations to the employees or creditors.”