The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Creditors of the long-defunct Gulf Union Bank (Bahamas) could receive “anywhere from 5-15 per cent extra” in dividend distributions, its liquidator said yesterday, as a result of a recent Supreme Court ruling.

Raymond Winder, the Deloitte & Touche (Bahamas) managing partner, described the verdict by Justice Stephen Isaacs as “a great ruling” for existing Gulf Union creditors (large depositors) who were not protected by statutory deposit insurance.

Justice Isaacs had ruled that the new insolvency regime, ushered in last year by amendments to the Companies Act and the Companies Liquidation Rules 2012, did not apply to liquidations started before that date.

The effect, Mr Winder explained, was that creditors in ongoing bank winding-up cases, such as Gulf Union and Suisse Security Bank & Trust, would now receive “100 per cent on the dollar” of what was due to them.

The Deloitte & Touche chief added that he, and other liquidators, would no longer have to hold a certain portion of recovered funds back in case other creditors came forward to submit claims late in the insolvency process.

And nor would they have to turn unclaimed monies, in the case of bank liquidations started pre-2012, over to the Treasury once the winding-up was completed.

“This is a great ruling for the remaining creditors,” Mr Winder said of Justice Isaacs’ May 14, 2013, Order.

“What it does is that it allows us to now take all the funds we have in our possession and share it among creditors that have made some valid claim in the liquidation.

“Prior to this, we were concerned that those creditors who had not made a claim, we’d have to transfer their pro rate portion - the funds due to them - to the Treasury. This ruling allows us to share those funds those creditors.”

Mr Winder and fellow Gulf Union liquidator, retired accountant Graham Garner, had applied to the Supreme Court for directions on whether, and how, the new insolvency regime applied to bank liquidations already in process.

Until Justice Isaacs clarified the situation, Messrs Winder and Garner were forced to delay planned distributions of recovered funds to creditors of both Gulf Union Bank (Bahamas) and Suisse Security.

“It’s a big ruling because it now allows us to increase the percentage distribution to these existing creditors,” Mr Winder told Tribune Business.

“The winners are those creditors who, prior to this ruling, did not recover 100 per cent on the dollar because of those funds not being claimed.

“These funds can now go to distribution, and raise the percentage they’d receive if the ruling had not been made.

“In the case of Gulf Union Bank, we’re hoping this could mean anywhere from 5-15 per cent extra to each creditor - the ones not made whole by the deposit guarantee scheme.”

Describing the Supreme Court’s decision as “a big relief”, Mr Winder said it had also paved the way for him to make a fourth dividend distribution to Gulf Union creditors, and the first to Suisse Security creditors/depositors.

Suggesting that Justice Isaacs’ decision would set a legal precedent, Mr Winder added: “A number of other liquidations should be able to use this ruling as a basis in dealing with the distribution of funds they have on behalf of their creditors. A number of them can utilise this ruling.”

However, he added that if legitimate creditors submitted late claims prior to the liquidation’s close, the liquidator still had the duty to “make them whole prior to the final distribution”.

And those late creditors, and the previous distributions they had missed, would take “priority” before more distributions.