The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamas-based loss adjuster will today face a winding-up petition in the Supreme Court for allegedly failing to pay $72,040 in costs to a firm that once provided management services to it.

Crawford Bahamas, according to documents obtained by Tribune Business, has failed to pay the sum due to Atlanta-based Crawford & Company International as a result of two cost Orders made in the latter’s favour by the Court of Appeal.

In its petition, Crawford & Company International is alleging that “more than three weeks” have passed since it served the June 13, 2013, demand for payment on the Bahamian insurance loss adjuster and its principals, and the debt has not been paid.

As a result, it is today petitioning the Supreme Court to wind-up Crawford Bahamas under the Companies Act, and have KPMG Restructuring accountants, Tracy Knowles and Juan Lopez, appointed as official liquidators.

Tribune Business has repeatedly attempted to track down Crawford (Bahamas) beneficial owners, April and Donald Gow, for comment on the matter.

However, a number for Crawford (Bahamas) no longer works, while all the phone numbers for the business that it changed its name to, Dowdeswell Street-based Caribbean International Loss Adjusters, were all said to be out of service.

The $72,040 costs stem from a Court of Appeal ruling, with overturned a Supreme Court verdict, that Crawford Bahamas was not entitled to a 50 per cent share of “catastrophe profits” stemming from work done for RoyalStar Assurance in the Cayman Islands post-Hurricane Ivan.

Crawford & Company International had also managed Crawford Bahamas’ loss adjusting operation in the Bahamas from January 1, 2014, to August 31, 2005, dealing with 4,760 claims stemming from Hurricanes Frances and Jeanne.

The Bahamian appellate court found in a November 8, 2012, verdict that Crawford (Bahamas) could not claim a share of those proceeds because its management agreement with Crawford & Company International did not cover loss adjusting work outside this nation.

The judgment stemmed from a dispute between the two companies over who was owed what from the now-ended management contract, with a sum in excess of $1 million involved.

The Court of Appeal ruling also described as “somewhat perplexing” the earlier Supreme Court verdict by then-Senior Justice Anita Allen (who is now the Court of Appeal’s president) that found in favour of Crawford (Bahamas).

Justice Allen did not hear the case before the Court of Appeal given that she had presided over the initial trial, with the three-strong appellate panel overturning that verdict in favour of Crawford & Company International.

Setting out the background to the dispute, the Court of Appeal said the June 1, 2002, three-year management agreement signed between Crawford & Company International and Alba Enterprises, the 100 per cent beneficial owner of Crawford (Bahamas), lay at its heart.

While the parties shared the same ‘Crawford’ name, the judgment made clear they were two distinct, separate entities. Crawford & Company International is an “international loss adjuster” headquartered in the US, while Crawford (Bahamas) is a claims loss assessor in this nation.

The Court of Appeal said the management agreement allowed Crawford & Company International to appoint a managing director to run the Bahamian company’s business operations, with the deal also setting out fees and formulas for how the US company was to be compensated for its services.

Crawford (Bahamas) served notice that “it did not wish to renew or extend” the management contract on May 31, 2005, although the arrangement continued on “an informal basis” until August that year.

The judgment noted that Crawford (Bahamas) then refused to pay what the US company demanded as compensation for its services.

“As a consequence, in November 2005, the appellant [Crawford & Company International] sued the respondent [Crawford Bahamas] for the sum of $1.009 million that it alleged was due under the contract,” the Court of Appeal found.

“The respondent, while acknowledging that it owed the appellant $657,755, counterclaimed for damages for failure to manage its business in a proper business like manner, an accounting in respect of claims processed in the Cayman Islands as a result of Hurricane Ivan in 2004, and for the return of documents and papers.”

The key issue before the Court of Appeal was whether the management agreement had “extraterritorial effect”, meaning that Crawford & Company International was required to pay Crawford (Bahamas) for work it had done outside this nation.

The Court of Appeal found that it did not.