The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Supreme Court has approved the transfer of CLICO (Bahamas) remaining in-force insurance policies to BAF Financial’s management, Tribune Business can reveal.

The approval, which is understood to have been granted last week, will free-up the insolvent insurer’s liquidator, Craig A. ‘Tony’ Gomez, to focus on pursuing its Trinidadian principal in a bid to recover the near-$36 million loss incurred in selling its main asset.

The Baker Tilly Gomez accountant and partner, in multiple reports to the Supreme Court, confirmed he had selected BAF Financial & Insurance (Bahamas) - the company headed by PLP deputy leader and Exuma MP, Chester Cooper - to take over management of CLICO (Bahamas) remaining life insurance and pension policies.

“In August 2016, Colina Insurance, BAF FInancial & Insurance (Bahamas) and Family Guardian Insurance Company were invited to bid on the active CLICO insurance portfolio,” Mr Gomez wrote in his 22nd and latest report to the Supreme Court.

“Colina advised that it had no interest in the portfolio. Both BAF and Family Guardian expressed interest and signed non-disclosure agreements, and performed a due diligence on the portfolio. BAF has been selected to manage the active CLICO insurance portfolio.

“As at the date of this report, the official liquidator and BAF were reviewing the draft of a management agreement outlining the responsibilities of each party.”

Mr Gomez is ‘gagged’ from speaking publicly on the CLICO (Bahamas) liquidation by Supreme Court Order, but Tribune Business contacts familiar with developments confirmed that negotiations with BAF Financial had progressed to the point where terms had been agreed and the necessary judicial/regulatory approvals obtained.

The deal will likely restore some confidence among the insolvent insurer’s long-suffering policyholders, who have continued to faithfully pay their premiums, now that the remaining portfolio is in the hands of an actual insurance company.

It will also free Mr Gomez and his staff from the nine-year burden of having to run an insurer themselves, receiving premiums, obtaining Supreme Court permission to pay claims and dealing with reinsurers, which is a task they have been performing ever since CLICO (Bahamas) was placed into liquidation in February 2009.

BAF Financial will only manage the policy portfolio, though, with the liquidator eventually hoping to sell it - whether to Mr Cooper’s firm or another Bahamian life and health insurer.

Still, the transfer will now enable Mr Gomez and his staff to focus on other issues, chief of which appears to be the pursuit of CLICO (Bahamas) ultimate principal to recover the losses sustained in the liquidation to-date.

His Supreme Court reports, which have been obtained by Tribune Business, make no secret of Mr Gomez’s determination to pursue Lawrence Duprey, the Trinidadian head of CLICO (Bahamas) parent, CL Financial, which also collapsed into liquidation at the same time.

CLICO (Bahamas) advanced $73 million to finance the development of a high-end real estate project in West Palm Beach, named Wellington Preserve, but Mr Gomez was only able to recover $38 million - just over half this sum - in selling the asset to a host of real estate buyers.

“The property development owned by Wellington Preserve was sold and the company dissolved,” Mr Gomez reported to the Supreme Court. “Wellington Preserve was indebted to CLICO Enterprises [a CLICO Bahamas affiliate] for $73.802 million.

“CLICO Enterprises was able to recover only $38.002 million, resulting in a loss of $35.8 million to CLICO Enterprises. It is the intention of the official liquidator to pursue the directors of CLICO Enterprises, Mr Duprey in particular, to recover this loss.”

It is unclear how imminent legal action against Mr Duprey is. However, Mr Gomez informed the Supreme Court he has admitted defeat in his lawsuit against former CLICO (Bahamas) directors - including Mr Duprey.

His report revealed that the action brought against Mr Duprey and his wife, Sylvia Baldini; Karen Gardier; Claude Dacon; and Ian Garcia for “fraudulent breaches of fiduciary duties, gross and wilfull negligence, fraud and dishonest assistance” rendered to the Trinidadian principal had been set aside by the Supreme Court on September 12, 2016.

Mr Gomez said he had chosen not to appeal this decision, which is likely due to the need to preserve CLICO (Bahamas) dwindling cash pile. The insurer, which was suffering a $55.817 million solvency deficiency at end-June 2017, had at that date just over $7 million in its accounts to pay ongoing expenses.

“At the date of this report, CLICO (Bahamas) had $7.41 million in its bank accounts, which is a major concern in the liquidation,” Mr Gomez wrote. “Professional fees, medical and death claims, coupled with the staff, building and operational expenses, have to be paid on a regular basis (daily and monthly).

“There continues to be a depletion of the available funds as a result of the payments of the aforementioned expenses. I will continue to monitor cash flow.”

The disposal of CLICO (Bahamas) in-force insurance policies will also enable Mr Gomez to concentrate on selling its Bahamas-based real estate assets, as well as pursue the $58 million guarantee its Trinidad parent gave to secure the Wellington Preserve advances.

The liquidator’s reports reveal that efforts to sell Bahamian real estate assets have been held up by the absence of Bahamas Investment Authority (BIA) permits, confirming CLICO (Bahamas) and its affiliates had been approved to acquire the land in the first place.

Besides these title problems, Mr Gomez’s woes have been exacerbated by difficulties in locating conveyancing documents in the insolvent insurer’s files, together with liens and other charges over the properties.

He told the Supreme Court, though, that a sale of the Grand Bahama Millwork and Building Supplies property, the former hardware and construction materials supplier, was “pending” to Black & Blacks, a Bahamian company.

And interest had “spiked” in 12.472 acres of land at Westridge, which is divided into 12 lots, following Baha Mar’s opening. As for the eight-unit Golf View Apartments complex in Freeport, Mr Gomez said that apart from missing conveyances and BIA permits, this property also had to contend with a CIBC FirstCaribbean International Bank (Bahamas) lien.