The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

CLICO (Bahamas) liquidator is trying to determine whether its affiliate’s $1.45 million property investment in Haiti can be recovered, having previously branded it a write-off.

Craig A. ‘Tony’ Gomez, the Baker Tilly Gomez accountant and partner, disclosed the altered approach in his 12th report to the Supreme Court on the liquidation of CLICO Enterprises, the wholly-owned subsidiary that received $73.8 million from the insolvent Bahamian insurer.

The report, the first published in 14 months, comes as Tribune Business understands that talks between the Government and Mr Gomez over the former’s promised $30 million guarantee are starting to intensify.

Michael Halkitis, minister of state for finance, did not return Tribune Business e-mails seeking comment, but well-placed sources have confirmed to this newspaper that his Ministry is in talks with the liquidator about how to best structure the guarantee.

Its delivery is vital to Mr Gomez’s efforts to transfer CLICO (Bahamas) remaining policy portfolios to another life and health insurer, as all potential purchasers have refused to consummate a deal without it being in place.

The guarantee was pledged by the former Ingraham administration, but successive governments - especially given the tight fiscal circumstances - have yet to come through and deliver, with no provision being made for the payment in the Budget.

This has led to growing frustration among CLICO (Bahamas) policyholders, and the International Monetary Fund (IMF) in its 2012 Article IV report called for the insolvent insurer’s winding-up to be expedited - a thinly-veiled reference to the Government’s failure to deliver the guarantee.

Tribune Business understands that the talks between Mr Gomez and the Government have taken the form of the liquidator proposing the best structure for providing the guarantee.

But sources familiar with the situation have also suggested Mr Gomez is looking at creating a trust or similar entity, separate from the insolvent CLICO (Bahamas), which would hold the remaining policy portfolio.

“He is working right now with the Government to put in place a structure that might not include the guarantee at this time,” one contact said.

“He might incorporate a trust company above CLICO (Bahamas), a Bahamian trust, where the government guarantee and premium income will flow into.”

In his latest report on CLICO Enterprises, which acted as the vehicle for the insolvent insurer’s investment activities, Mr Gomez is now exploring whether its outlay on a Haiti property, called Shabisco, can be recovered.

The property was appraised at $1.45 million in January 2008, but the bakery that it housed ceased operating the same year. Some $555,385 had been due from CLICO Enterprises on the property, but the 2010 earthquake had complicated matters.

Unable to get an assessment on the property, Mr Gomez in late 2012 told the Supreme Court: “I have determined that this asset cannot be recovered, and the asset is now strongly considered a write-off by me.”

However, changing his tune in the 2013 first half, Mr Gomez said: “I have solicited the services of a member of CLICO’s creditors committee who frequently travels to Port-au-Prince to get a report on the building for me, inclusive of pictures.

“Once a substantive report is received by me, it will allow me to make a final decision in lieu of the $560,000 due for repayment on the property, if this is an asset to further pursue.”

With the sale of CLICO Enterprises’ main asset, the 523-acre Wellington Preserve in south Florida, proceeding apace, the action in the liquidation has moved back to the Bahamas.

Key to CLICO Enterprises’ liquidation will be the fate of a $52.572 million claim against it by CLICO Trinidad, which has already been rejected by Mr Gomez.

This is likely to end in a court battle, but if the liquidator prevails and it is rejected, it will eliminate more than 60 per cent of the $88.421 million solvency deficiency that CLICO Enterprises currently endures.

This will also mean that more money can be upstreamed to CLICO (Bahamas) for the benefit of its creditors. And Mr Gomez is also understood to be making moves in Trinidad to enforce the $58 million guarantee made in favour of the insolvent Bahamian insurer by its former parent, CL Financial. This, too, would fill a sizeable hole in the liquidation estate if collected.

Elsewhere, Mr Gomez said he had rejected two bids on the 12 lots that CLICO Enterprises owns at Lake Point, West Ridge Estates. Discussions over the sale of the 12.472-acre site continue.

The liquidator is also seeking to gain control of Grand Bahama Millwork and Building Supplies, while continuing to pay the company’s expenses.