The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The battle over the ‘settlement’ to the long-running City Markets pension fund controversy is intensifying, with those behind a successful ‘11th hour’ intervention in the matter declaring key aspects “null and void”.

Rouschard Martin, of Martin, Martin & Company, told Tribune Business he and his clients were “pushing” for an accounting of everything that had occurred with the pension fund over the past four years.

Mr Martin, who took over as the ‘attorney of record’ for several hundred City Markets pension beneficiaries at a July 3 Supreme Court hearing, urged the fund’s trustees to “settle” with him and his clients prior to the next court appearance on August 14.

He represents the Bahamas Supermarkets Former Employees’ committee’s executive Board, whose chairman made it abundantly clear to Tribune Business that he does not recognise key parts of the January 16 ‘settlement Order’ that was agreed before their intervention.

Whanslaw Turnquest, the supermarket chain’s former chief inventory control officer, told Tribune Business that he regarded as “null and void” the agreement that saw the pension fund exchange its ownership interest in City Markets’ former headquarters and warehouse building on East-West Highway for preference shares in Associated Bahamian Distillers and Brewers (ABDAB).

The latter entity was then-majority controlled by the Finlayson family, the last owners of City Markets. And Mr Turnquest also slammed another deal where ABDAB exchanged its 70 per cent equity interest in West Bay Street’s Trinity Plaza complex for preference shares in the company that were held by one group of pension beneficiaries.

While Messrs Martin and Turnquest backed the ultimate intention to wind-up the pension fund and pay all beneficiaries what they are due, they made clear their willingness to ‘tear up’ the January 16 ‘settlement’ - especially if they find it not to be in their clients’ interests.

And their stance was slammed by all parties to that agreement. Dennis Williams, attorney for the Bahamas Commercial Stores, Supermarkets and Warehouse Workers Union, told Tribune Business that the position taken by Messrs Martin and Turnquest was “untenable”.

He argued that it only threatened to further delay hundreds of former City Markets pension beneficiaries receiving what they are due, and warned that their intervention would only create “a long court melee”.

James Thompson, who Mr Martin has now replaced as attorney for numerous pension beneficiaries, yesterday asked Tribune Business why the latter and his clients wanted “to destroy” an agreement all parties had signed up to.

He urged Messrs Martin and Turnquest not to tear up the January 16 agreement, as it was the only thing currently “compelling the trustees to pay everybody” what they are due. Some beneficiaries, he warned, did not “have entitlements to be paid”.

And Mark Finlayson, who represents City Markets’ former operating parent, Bahamas Supermarkets, as benefactor of the pension trust, told Tribune Business he understood Chief Justice Hartman Longley “bound” Mr Martin to honour the January 16 agreement at the July 3 hearing.

Messrs Martin and Turnquest, though, both complained that the two pension fund trustees, Christine Turnquest and Constance Rolle, and their attorneys, together with Mr Thompson, had failed to respond to repeated requests to provide information on the fund’s status.

While a meeting was tentatively scheduled with the trustees and their attorneys, Dunmore Chambers, before week’s end, Mr Martin said they would seek a Supreme Court Order that the requested information be produced if talks proved unsuccessful.

He explained that he and Mr Turnquest were seeking a full accounting of the pension fund assets and everything that had occurred since City Markets ceased business in 2011.

Questioning whether monies may have been “reversed out of the accounts” of pension fund beneficiaries, Mr Martin said he and his clients were also “concerned” over the $3 million ‘sale and leaseback’ deal struck between the fund and City Markets under the ownership prior to Mr Finlayson.

This involved the supermarket chain, the operating business, selling $3 million worth of store improvements and fixtures at its Cable Beach store, then leasing them back for $62,000 a month in a bid to generate cash.

“We want clarity. We want to see exactly what happened to the $3 million that was owed to the pension fund,” Mr Martin said.

Mr Turnquest, who said they and their executive Board committee represent nearly 500 pension beneficiaries, and 340 former workers also seeking severance monies, added that they wanted an accounting of the fund’s bank accounts at CIBC FirstCaribbean International Bank (Bahamas) and Scotiabank.

He told this newspaper that neither he nor the beneficiaries represented by the committee would accept either deal involving the former City Markets headquarters and Trinity Plaza buildings.

“We do not support the transfer of that building for ABDAB shares,” Mr Turnquest told Tribune Business of the East-West Highway property.

“We don’t know of that deal. As far as we are concerned, that ABDAB deal is null and void because the court did not authorise the transfer of that asset.”

He added: “We’re not negotiating the ABDAB and Trinity deals at all. That is non-negotiable.

“Our clients are not subject to any ABDAB deal because it was not authorised by them or the court.”

Tribune Business previously revealed that City Markets’ last principals, the Finlayson family, exchanged the pension plan’s interest in the former head office for preference shares in their Associated Bahamian Distillers and Brewers (ABDAB).

The deal effectively switched the security for the former supermarket chain’s pension beneficiaries from illiquid real estate assets that have proven “impossible” to sell to a more liquid investment.

With no buyer found for the former City Markets head office on East-West Highway, the pension beneficiaries -via the trade union - were in theory given the opportunity to receive dividend payments on those preference shares and, potentially, a cash payout of everything owed to them.

Messrs Martin and Turnquest reiterated calls for the pension fund, known as the Bahamas Supermarkets Ltd Profit Sharing Retirement Plan, to be wound-up rapidly as its beneficiaries had been waiting almost four years for monies essential to their meeting key financial obligations.

“The fund is in a shambles; no need to carry it on. It’s an expensive venture to administer,” Mr Martin said. “They [the trustees] need to settle. They’re under pressure, and we need to have this matter resolved.”

Mr Turnquest added: “The winding-up of the pension fund is in everyone’s best interests. It’s a nightmare to manage. It will be a colossal nightmare in the next five-10 years.”

That is the only issue on which they are in agreement with the January 16 ‘settlement’. That Order, which has been seen by Tribune Business, stipulates that the settlement be “enforceable for the benefit of all beneficiaries” of the City Markets pension plan, not just the groups who had been previously represented by Mr Thompson and the union.

It also agreed that the pension fund trustees “wind-up and terminate” the plan by June 1, 2015, although they could apply to extend the time.

And the wind-up was to involve the sale of all pension plan assets, with the proceeds applied to the plan and used to pay-out ex-staff beneficiaries according to what they are owed.

The wind-up has not been completed yet. Mr Thompson, who confirmed that Mr Martin had replaced him as the attorney for some of his former clients, yesterday said he was still involved representing “some of the beneficiaries”.

Downplaying his replacement by Mr Martin, and suggesting that clients frequently changed attorneys, Mr Thompson questioned why Messrs Martin and Turnquest now seemingly wanted to overturn an agreement that had been signed by all parties.

“I can understand them questioning some of that, but why destroy that agreement?” he said. “Without that agreement, many of the beneficiaries don’t have the right to be paid out.

“The trustees could not be compelled to pay unless that agreement is in place. Don’t set aside the document that compels the trustees to pay people. That’s the only document that could compel them to pay everybody. It’s an admission of liability by the trustees. Without it, you will have to go back to court.”

Mr Thompson said that while he would not object to Messrs Turnquest and Martin setting aside some of the underlying deals, they had to preserve the January 16 Order and settlement at all costs.

He questioned whether the duo were trying to seize control of the pension fund assets, and added that the Trinity Plaza deal was conceived as a way to get what was due to the beneficiaries he represented.

Mr Williams, meanwhile, argued that Messrs Martin and Turnquest only represented eight of the 12 plaintiffs named in the original action, adding that this meant they acted for just 0.023 per cent of beneficiaries.

Adopting a similar stance to Mr Thompson on the duo’s opposition to the January 16 deal, he said: “Any reasonable party would know that such a position would not be tenable, especially under the present conditions when there is a genuine effort to solve a problem.

“If all parties who have worked diligently through the past years do not stand strong in the near future against Mr Martin’s and Turnquest’s alleged position, there may be a great delay in the settlement.

“I would ask again: Does Mr Turnquest really want the people who he claims to represent paid, or does he want a long court melee with a carnival-like atmosphere.”

Calling for all parties to adhere to the January 16 settlement, Mr Williams added: “I believe that I speak for all reasonable parties in that, at this late stage, there is no room to play on people’s emotions, especially when they are owed something and another party is willing to settle.

“In this instance, any party who is perceived to be preventing or delaying the global settlement or the distribution of persons’ benefits under the plan will be met with the greatest amount of resistance and eventually sidelined.”