The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

ZNS is facing a $542,000 summary judgment bid over claims that it breached a satellite leasing contract with two years of the deal remaining.

Attorneys for Centrex Centrex Communications Corporation, in September 12 letter to the southern New York federal court, said they believed it was “appropriate” to now file a motion for summary judgment against the Bahamian state-owned broadcaster.

The letter, which has been obtained by Tribune Business, requests a conference before Judge Nelson Roman prior to the motion’s filing amid indications that Centrex has lost patience with efforts to settle the matter outside of the US court system.

“The instant matter is a relatively straightforward breach of contract case,” attorney Joshua Sklarin argued on Centrex’s behalf, alleging that all the elements necessary to support its claim against ZNS and the Broadcasting Corporation of The Bahamas (BCB) were in place.

“Here, Centrex and defendant, the Broadcasting Corporation of the Bahamas entered into a five-year contract for satellite services. The contract requires BCB to pay Centrex $22,600 per month ($271,200 per annum) from January 1, 2016, through December 31, 2020,” he added.

“In short, in the midst of a five-year contract, BCB breached said contract by not making the required monthly payments. The last payment made by BCB was for the month of December 2018.

“Due to BCB’s breach, and despite Centrex’s mitigation attempts, Centrex has been damaged in an amount of no less than $542,400 in addition to attorneys’ fees and other costs and interest. The contract provides for 1.5 percent interest on any amount not paid calculated from the date that payment was due.”

The cash-strapped Broadcasting Corporation of The Bahamas is again due to receive a near-$8m subsidy, $7.579m, in the 2019-2020 fiscal year, which means that any judgment obtained by Centrex against it will likely have to be covered by Bahamian taxpayers.

Tribune Business reported earlier this year that ZNS’ US attorneys switched Centrex’s claim from the New York State Supreme Court to the southern New York federal court, filing a “notice of removal” to achieve this in early April.

Little occurred in the subsequent five months until the filing of Centrex’s letter to the judge last week, indicating that the two parties’ efforts to settle the matter out-of-court may have proven unsuccessful.

Prior legal filings suggest that the state-owned broadcaster was seeking to extricate itself from a long-term deal that the Christie government effectively locked the Minnis administration into.

Documents obtained by Tribune Business reveal that ZNS’ relationship with Centrex began under the last Ingraham administration when it agreed to lease satellite capacity from the US firm for transmission of its television programming.

The deal, signed on ZNS’ behalf by then-general manager Edwin Lightbourn, featured a Master Service Agreement (MSA) that was accompanied by a Service Order setting out specifics of the agreement such as monthly rate, satellite and transponder bandwidth, and duration.

The initial deal saw ZNS pay $30,920 per month, or close to $372,000 per annum, for a one-year deal. After the Christie government took office in May 2012, Centrex alleged that the lease agreement was renewed for three years at a lesser rate of $26,400 per month.

ZNS then opted for a longer term five-year deal at a lower monthly rental rate, agreeing that it be retroactive to January 1, 2016, and last until December 31, 2020. The agreement was signed by Mr Lightbourn’s successor, Diana Swann.

However, ZNS management, “citing budget cuts”, sought to exit the contract on November 30, 2018, but Centrex is refusing to release the loss-making broadcaster from its alleged obligation to pay it $22,600 per month until the deal ends on December 31, 2020.

“On September 3, 2018, the current general manager of the Broadcasting Corporation of The Bahamas, Kayleaser Deveaux-Isaacs, sent an e-mail to Centrex with a letter dated August 31, 2018, advising Centrex that BCB intended to end its contract for satellite services ‘effective November 30, 2018’, citing budget cuts,” Centrex’s initial claim alleges.

Centrex’s lawsuit makes clear why it may be especially eager to pursue its claim. For it reveals that it is a ‘middle man’ or broker for ZNS, as it actually leases the latter’s satellite capacity on its behalf from another company, New Skies Satellites BV.

Centrex itself is locked into the lease deal with New Skies until December 31, 2020, making it imperative for the New York company to obtain payment from ZNS otherwise it will be forced to cough up itself.