The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The New Providence landfill's former manager is facing a $5m-plus summary judgment bid against it as the long-running fall-out from its controversial exit continues for multiple creditors.

Attorneys for Massachusetts-based American Paper Recycling yesterday confirmed to Tribune Business that they will push for enforcement/recognition of its US judgment against Renew Bahamas at a Supreme Court hearing scheduled for November 20.

The disclosure came after this newspaper obtained legal documents exposing the scale of the problems, liabilities and "loose ends" that the Christie administration's chosen landfill operator left behind in the wake of its sudden October 2016 pull-out following Hurricane Matthew.

American Paper Recycling initiated Bahamian legal proceedings on May 14, 2018, after a Massachusetts court awarded it $5.037m over allegations that Renew Bahamas reneged on a recycled materials supply contract.

The US firm, which was acting as a "middleman" in providing recycled materials "mined" from the New Providence landfill to US mills, claimed that Renew Bahamas effectively "cut" it out of the deal by supplying these other companies directly itself.

"On June 4, 2014, the plaintiff [American Paper Recycling] and the defendant [Renew Bahamas] signed a written Letter of Intent whereby the defendant agreed to provide the plaintiff with all of its baled fibre and polymer products prior to the installation and commissioning of permanent baler machines," American Paper Recycling's Supreme Court claim alleges.

"Under the terms of the Letter of Intent, the defendant was to provide the plaintiff with the greater of 45,000 tons or 50 percent of the total annual tonnage of cardboard mixed paper, mixed plastic bottles and used beverage cans produced, which the plaintiff would then market and sell to other sources."

American Paper Recycling alleged that its agreement with Renew Bahamas was formalised on December 27, 2014, with a written marketing and sales agreement.

"The agreement provides that Renew will sell American 50 percent of the total output of cardboard, mix paper and plastic polymers, and 100 percent of the aluminum can grades," the Supreme Court alleges.

"For any tons not shipped through [American Paper Recycling], the defendant would pay a 'buy back' commission of $6 per ton for any shortfall weight."

However, the commercial relationship between the two parties took less than one year to sour. American Paper Recycling filed its claim with the Massachusetts Superior Court's Trial Court on November 12, 2015, alleging a breach of contract by Renew Bahamas.

"The allegation was that the defendant failed to ship the required tonnage from its plant in The Bahamas and failed to pay any 'buy back' commission," American Paper Recycling said.

"The defendant was aware that the plaintiff committed to resell the materials, and that certain mills were waiting for shipments for recycle from the defendant through the plaintiff. Instead of shipping recyclate to the plaintiff or on its behalf, the defendant shipped the material directly to these mills."

American Paper Recycling subsequently obtained the $5.037m judgment that it is now seeking to enforce in The Bahamas on May 24, 2017. It is also seeking 12 percent interest on this sum from July 31, 2014. Massachusetts court documents show that while Renew Bahamas initially defended the action, it appears to have ceased doing so around the time it ceased landfill operations, thus paving the way for a summary judgment that has not been appealed.

Roy Sweeting, partner at the Glinton, Sweeting & O'Brien law firm that is acting for American Paper Recycling, yesterday confirmed to Tribune Business that it was still pursuing enforcement/recognition of the company's award by the Bahamian courts.

"We have an application for a summary judgment scheduled for November 20. That's as far as it has gone," he confirmed. "The only thing I can tell you is that it's continuing. We're instructed to proceed and see what we can achieve for the client, but we don't know what that's going to be."

Tribune Business sources familiar with developments at the New Providence landfill yesterday suggested American Paper Recycling and its Bahamian attorneys will face a tough battle to recover any assets to realise its award even if recognised by the Bahamian courts.

Renew Bahamas stopped operating more than two years ago, and most - if not all - its remaining assets will likely have been dissipated over that period. And Tribune Business can reveal that other creditors face a similar uphill task.

Fred Prins, director of international business development for Machinex, the Canadian-based supplier that provided Renew Bahamas with all the equipment for its materials recycling facility, yesterday confirmed that it was still owed several hundred thousand dollars in unpaid rent on the machinery.

Machinex's equipment remains at the New Providence landfill site on Tonique Williams Highway, and Mr Prins said the company was waiting for the Government to conclude talks with Providence Advisors and its Bahamian waste provider partners on a management contract before determining how to proceed.

"We're working with someone in The Bahamas now as regards the legal ramifications and where we stand," Mr Prins told Tribune Business. "We are working with the Government and all concerned to bring this to an amicable conclusion. That's the way it is."

This newspaper understands the sum owed to Machinex by Renew Bahamas on the equipment lease could be close to a $1m. The Canadian firm has also obtained a lien over the materials recycling facility to secure its ownership, given that the equipment still belongs to it, and plans to discuss its fate with the Providence Advisors-led group once the new landfill management contract is completed.

"Whoever is going to take over the facility, we would like to discuss with them what we can do with the equipment itself," Mr Prins confirmed. "Nothing can be done until that is finalised and we see where we go from there. We will have to have discussions with government and whoever is taking over the whole landfill. We're just waiting."

Mr Prins revealed Machinex had also continued "amicable discussions" with Michael Cox, Renew Bahamas' former chief executive, who has remained in The Bahamas despite the company's demise.

Mr Cox did not respond to e-mail requests sent to him seeking comment, but multiple sources told Tribune Business that he has formed a new company, Bahamas Processing and Trading, which submitted a bid on the latest landfill tender. It was rejected by the Government in the first round.

Renew Bahamas "suspended its services" in the wake of Hurricane Matthew, after shootings, tyre slashings and widespread theft following the storm made operating conditions unsafe.

Mr Cox told Tribune Business at the time that these incidents, combined with the loss of electrical power in Matthew's wake, had brought landfill operations - especially the revenue-generating recycling activities - to "a grinding halt".

The former manager also complained that it "encountered tremendous difficulties" in developing a co-operative relationship with the Christie administration, arguing that the latter's failure to plan and enter into "consistent dialogue" helped prompt Renew Bahamas' exit.

Some observers, though, believe Renew Bahamas exploited Hurricane Matthew to exit a five-year contract and business model that had proven both unprofitable and unsustainable. Gerhard Beukes, its principal and Mr Cox's predecessor as chief executive, told Tribune Business in April 2016 that it wanted to renegotiate the contract after it had lost "millions of dollars".