The Tribune

EDITOR, The Tribune

IT IS good to know that, as I previously predicted, the vast majority of the 2,000 Bahamian former Baha Mar employees are being paid off smoothly and efficiently, with few serious disputes.

James Smith, former Central Bank Governor, can be congratulated for leading his Claims Committee in solving administrative complexities that will bring a happy smile in many local households.

However, profound financial, legal and even Constitutional issues remain, embodied in the payment structure that was handed to Mr Smith and that he has no power to resolve, apparently rooted in the agreement between Government and the Chinese EXIM Bank - an agreement that is still locked in confidentiality.

As required, he has made clear that expatriate employees must wait until October 31 to find out what, if anything, they might be paid. This is, of course, a huge question mark, since nobody has been told the total amount that CEXIM has agreed to pay into its fortune-cookie claims vehicle, Perfect Luck Ltd. $100m? More? Less?

The doubt has been compounded by Mr Smith’s admission that he has been given no rules how to handle claims from employees of Baha Mar affiliate Hobby Horse Company or being trained by the Leadership Development Initiative. They are just told vaguely “try and work it out, to be dealt with in a special way”.

And beyond employees, Mr Smith has to figure out how he is going to pay contractor and vendor claimants, all of whom are required to submit proof-of-claims by the end of this week. All that’s been (unofficially) said is that claims under $500,000 will “likely” be paid, and, according to Minister Jerome Fitzgerald, Bahamians will be preferred over foreigners. The financial complications are obvious: $100 million will certainly not cover all claims; after this week’s round of employee payments, how much will be left for everybody else and how will the shortfall be divvied up?

Then there’s the tricky legal issue. I stand to be corrected but I believe Baha Mar is still under provisional liquidation controlled by Bahamian liquidators. They are bound by our liquidation law, which does not permit any favouritism between large and small creditors or between foreign and domestic ones. If this parity is seen to be violated when payouts begin to be made, I can well imagine a flood of litigation by disgruntled creditors against CEXIM, Government, and possibly against Mr Smith personally with the other members of the Claims Committee. The charge could well be made that the agreement between CEXIM and Government is invalid - ultra vires lawyers call it - since it violates our liquidation law. How will our Constitution anti-discrimination provisions apply?

I fear our hard-working public servant James Smith is facing a few tough months, through no fault of his own, by simply trying to resolve the confusion left from the hastily drafted arrangements concocted by the leadership of the PLP to save their political skins. And they may still be skinned.

RICHARD COULSON

Nassau,

September 28, 2016