The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The inability to sell two-thirds of a BISX-listed company’s real estate portfolio is hampering efforts to realise “one of the most significant assets” and recovery sources for investors in a failed $471 million Bahamian-domiciled fund structure.

Myles Culmer, BDO (Bahamas) director of advisory services, told Tribune Business yesterday that Olympus Univest’s liquidators had still to conclude a sale of the 50.4 per cent majority interest in Premier Commercial Real Estate Investment Corporation.

In e-mailed replies to this newspaper’s questions, he also confirmed that Premier had yet to find buyers for the former Caribbean Bottling properties in Nassau and Freeport, which have been on the market for more than one year and represent two of the former’s three real estate holdings.

This, too, has stymied efforts to monetise the Premier equity held by Mosaic Composite, the Bahamian-registered counterparty entity through which Olympus investor monies were placed.

That 50.4 per cent majority stake in Premier has been valued at $4-$5 million and, if realised, would boost Olympus investor recoveries by around 50 per cent from the present $10.7 million gross collected by the liquidators to-date.

“We have thus far been unsuccessful in selling Mosaic’s equity stake in Premier Commercial, but the Mosaic joint official liquidators are continuing in their efforts to either monetise or enhance the value of Premier’s various real estate properties, all in an attempt to realise upon the same while marketing the controlling shares of Premier,” Myles Culmer told Tribune Business.

Emphasising that the Olympus Univest liquidators, senior BDO (Bahamas) accountant and partner, Clifford Culmer, and Canadian accountant, Raymond Massi, were seeking “full market value” for that equity stake, Myles Culmer said the claims process for investors in the fund structure had been completed.

“Total gross recoveries to-date have been $10.7 million,” he told Tribune Business.

“The recovery of any assets in Olympus Univest is dependent upon Mosaic’s realisation of its assets. Therefore, any distributions to the Olympus investors will commence once the realisation and distribution of Mosaic’s assets are completed.”

That “realisation and distribution” are, of course, dependent on Messrs Clifford Culmer and Massi obtaining a successful exit from Premier, something they have been trying to achieve for at least five years.

Premier’s financial performance seems to have improved from the $945,211 and $1.301 million losses incurred in 2014 and 2013, respectively.

The real estate investment trust (REIT) was profitable for each of the first three quarters in 2015, generating a near-$195,000 ‘bottom line’ in the three months to end-September.

The two former Caribbean Bottling company headquarters were vacated after the Coca-Cola bottler, now under the ownership of a group headed by ex-banker Walter Wells, moved to its own fully-owned buildings.

The failure of the Olympus Univest ‘fund of funds’ structure, which occurred more than 11 years ago in 2005, has been something of a ‘black eye’ for the Bahamas given that investors have yet to seen any substantial recovery.

The Olympus Univest/Mosaic Composite collapse has left around 1,900 small retail investors, many of them Canadian, out of pocket with no explanation as to where most of the money went.

Among Premier’s founding directors, although he is no longer on the Board, was Stephen Hancock, president and chief executive of Cardinal International, the ex-Bahamian fund administrator for Olympus Univest, Mosaic and a number of other entities in the investment structure.

Cardinal, too, shut down at the time that Olympus Univest and its Mosaic counterparty went into court-supervised liquidation.

The Olympus Univest/Mosaic Composite co-liquidators’ previous reports detailed how recovering investor monies has been made difficult by “incomplete financial records, missing financial information and, in certain cases, the destruction of key books and records”.

Meanwhile, further details on the progress made by Clifford Culmer and Mr Massi is contained in an October 2015 court report by the Canadian liquidators for another part of the Olympus empire.

“One of the most significant assets remaining in the Mosaic estate is Mosaic’s 50.4 per cent interest in Premier Commercial Real Estate Investment Corporation (“Premier”), a publicly-traded Bahamian income trust which owns commercial real estate in the Bahamas,” the Canadian liquidators wrote.

“The Mosaic joint official liquidators are continuing their efforts to work with Premier’s Board of Directors and business manager to either monetise or enhance the value of Premier’s various real estate properties, all in an attempt to realise upon same.

“Two of the three properties owned by Premier have been listed for sale for more than one year. The third property is a commercial office building, which had been experiencing a high vacancy rate for many years. The property is now almost fully leased. However, at this point, the timing to monetise Premier’s real estate remains uncertain.”

The latter property is Freeport’s First Commercial Centre, which includes the Okyanos Heart Institute among its tenants.

“Based on independent appraisals of the real estate owned by Premier, the Mosaic joint official liquidators estimate Mosaic’s interest in the real estate owned by Premier to have a value of approximately $4 million to $5 million,” the Canadian liquidators’ report said.

“In addition, the Mosaic joint official liquidators continue to pursue claims against third parties held by Mosaic. As certain of those claims are currently subject to litigation, including, in particular, a claim of $5 million against the former auditors of the Channel Funds, the Mosaic joint official liquidators are unable to determine at this point the timeframe within which that litigation will be completed.

“To date, efforts by the Mosaic joint official liquidators to settle these third party claims have been unsuccessful.