The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Hopes for a deal that would have settled the pension obligations owed to one group of City Markets beneficiaries faded last night, after the key parties reached an “awkward position” amid suggestions of renewed legal action.

Mark Finlayson, the defunct supermarket chain’s former principal, told Tribune Business he believed it would be “very difficult” to bring the representatives for the two beneficiary groups back to the negotiating table.

Those representatives, the Bahamas Commercial Stores and Warehouse Workers Union, and attorney James Thompson, have been locked in talks for several weeks.

The negotiations aimed to facilitate the redemption of the Associated Bahamian Distillers and Brewers (ABDAB) preference shares that were issued to Mr Thompson’s clients to cover the pension obligations owed to them.

These preference shares were to be exchanged for ABDAB’s 70 per cent equity interest in West Bay Street’s Trinity Plaza, which Mr Thompson would have held in trust for his beneficiaries.

The rental income due to the 70 per cent stake would have been used to make annuity payments to the pension beneficiaries, plus cover Mr Thompson’s legal fees and other costs.

The other three parties involved in the Trinity Plaza sale - the trustees for the Bahamas Supermarket Profit Sharing Retirement Plan; Mr Finlayson as the benefactor’s representative; and the ABDAB Board, which will sell the 70 per cent Trinity Plaza stake, have all agreed to the deal provided Mr Thompson and the union are in agreement.

Mr Finlayson, who had been optimistic that this would happen last week, was markedly more pessimistic last night.

“It’s moved into a really awkward position, and I don’t think they’re [the union] coming back to the table,” Mr Finlayson told Tribune Business.

“It’s reached a point where we as benefactors, and Philip Kemp as administrator, did try to conclude and come to terms on this, but have ben frustrated.

“The union said: Forget it. We’ve done the best we could. We did try to come back on that, but it’s very, very difficult. We’d like to see everyone co-operate, but it’s very difficult to bring the union and Mr Thompson back to the table. I had hoped we would be able to get something done.”

Mr Finlayson said the ‘sticking points’ were that Mr Thompson was seeking a reduction in the number of City Markets pension beneficiaries that he is representing.

A e-mail from Mr Kemp to Mr Thompson, seen by Tribune Business, shows that the latter wanted to reduce the number of beneficiaries he represents from 70 to 15 - a drop of 55, leaving him acting for just 4.6 per cent of retirees.

Mr Kemp told Mr Thompson this meant “that the liability of your class has dropped from $1.024 million to $410,993, a difference of $612,774.

“This also results in a drop in your monthly commitment to $2,092.74, a drop of $4,334.04. This means that of the $14,846 in rent, your monthly payment will go from $6,426.78 to $2,092.74. It is very difficult for us to convince the union to take on $612,773.78 of new liability and $4,334.04 of additional monthly payment,” Mr Kemp added.

And a further sticking point, according to Mr Finlayson, is whose name the 70 per cent Trinity stake will be held in.

The union wants it to be held in trust, believing this will give beneficiaries more security, while Mr Thompson allegedly wants it to go in his name.

For his part, Mr Thompson is threatening to revert to the Supreme Court for a ‘contempt of court’ order against the four pension fund trustees.

This is because a Supreme Court Order on December 17 last year saw the trustees for the Bahamas Supermarkets Profit Sharing Retirement Trust agree to “come to some sort of settlement” with the beneficiaries before June 17, 2014.

Mr Thompson is likely to argue this has not been done, and wrote in an October 16 e-mail to Mr Finlayson: “Having acted as reasonably as we possibly can, we have no choice but to proceed with the contempt proceeding against the four trustees.”

Pointing out that Stamp Duty on the Trinity sale had not been paid, he added: “As indicated earlier, your offer of building for cash is not favoured by the clients or myself.

“The same was entertained as I believed that all reasonable opportunity should be considered and shown to the Court before requesting that the contempt Order be enforced.”

Mr Thompson also complained of having travelled to Nassau from Freeport in anticipation of closing the deal on October 15, only for this not to happen.

“Your excuse was that I had proposed that an accounting of rent should start from September, 2014. This you continue to maintain, notwithstanding that we started our discussion before September and the Order is that you were bound to pay the clients on the 17 June, 2014,” Mr Thompson said.

However, Barry Newman, ABDAB’s corporate secretary, reacted sharply to Mr Thompson’s suggestion that he should receive the September and October rents due to the 70 per cent Trinity stake simply because the agreement with the pension fund trustees was dated September 1.

“On what grounds do you demand that September and October rents be given to you?” Mr Newman responded.

“If or when that conclusion takes place, you will control that company (Trinity Ltd) and the rental income from that day forward.

“If your request was granted, what would you have us tell ABDAB’s Board of Directors and its 200 shareholders with regard to handing over a sum of money with regard to talks that ABDAB has never been a part of?”