The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A trade union leader yesterday said "all options are on the table" after the Court of Appeal rejected his bid and those by three fellow ex-pension fund trustees to overturn bankruptcy orders made against them.

Bernard Evans, pictured, the National Congress of Trade Unions of The Bahamas (NCTUB) president, told Tribune Business that "disappointment is an understatement" after the three appeal court judges declined to intervene in a dispute sparked by an "unauthorised" $1.35m loan.

He pledged that himself, Colin Wright, Ray Nairn and Shawn Bowe, all former fellow trustees of the Bahamas Communications and Public Officers Union (BCPOU) Pension Plan and Trust Fund, would "do whatever we can" via legal means to get the personal bankruptcy orders overturned.

Pointing out that there were no allegations of corruption, and no claims the four had benefited personally from the money advanced by the pension fund, Mr Evans rejected assertions that he and the other three trustees had breached their fiduciary duties to pensioners by failing to carry out proper due diligence on the borrower.

The former BCPOU president said they hired attorneys to investigate Kendal Williams Construction Company, the recipient of the $1.35m in two tranches, who reported back that the contractor was "a safe investment". He added that pensioners' savings were never in danger "before or after" the funds were advanced, arguing that their principal was "always secure".

Tribune Business's research reveals that Kendal Williams Construction Company was among the first 13 delinquent Bank of The Bahamas borrowers to be transferred to Bahamas Resolve, the special purpose vehicle (SPV) created in October 2014, as part of the initial $100m bail-out of the BISX-listed bank.

Documents obtained by this newspaper back in 2015 revealed that Bank of The Bahamas extended at least $2.28m worth of credit to Kendal Williams Construction Company, secured on a variety of real estate assets in Freeport's Lucaya Ridge and Bahamian Marina subdivisions, plus a 13.56-acre tract at Polaris Drive. The collateral also included multiple lots in the Britannia Estates Subdivision.

Mr Evans said this showed he and his fellow BCPOU pension fund trustees were not the only ones taken in by this borrower. "We just caught in a web," he told Tribune Business. "Pension funds always try to make investments, and this was one of the opportunities that we had.

"We hired lawyers to do due diligence, and they came back and told us it was a safe investment. One of the principals we were always mindful of was that the pensioners' principal savings were secure prior to and after their investment. Any investment never endangered the savings of our pensioners. Their principal savings were always secured."

However, that was not the way the trustees who succeeded Mr Evans and the other three saw it. Appeal justice Stella Crane-Scott, in a June 18 verdict, said the quartet were sued on April 27, 2012, "for the recovery of the amount of two unauthorised loans made to the Kendal Williams Construction Company totalling $1.35m".

The new trustees alleged that Mr Evans and their other predecessors "negligently disbursed" the funds "in breach of the Trust Fund's rules and in breach of the appellants' fiduciary and other duties owed to the Trust Fund".

Following a consent order by then-chief justice, Sir Michael Barnett, a final judgment for $1.35m was entered against the four on October 7, 2014. That ruling was never appealed, and Mr Evans and the other three former trustees were then ordered to appear before the Supreme Court's acting assistant registrar for an examination of their assets on April 19, 2016.

Four days before that examination, and 19 months after the judgment was entered, the four former trustees filed a legal action to halt the examination and strike-out the judgment entered against them. In the meantime, the current BCPOU trustees initiated bankruptcy proceedings against Mr Evans and the others on April 24, 2017, in a bid to enforce the judgment.

Justice Indra Charles approved the bankruptcy order against Mr Wright, but he then filed an action seeking to prevent news of his bankruptcy being published in the Gazette. He also sought a stay of the bankruptcy proceedings and determination of his bid to strike-out the initial judgment, but this was rejected by Justice Charles.

Mr Wright then appealed her ruling to the Court of Appeal in May 2018, just weeks before Justice Charles handed down bankruptcy orders against Mr Evans and the other two former trustees. All four, represented by Maurice Glinton QC, appealed in a bid to overturn these orders and Justice Charles failure to recuse herself.

However, Appeal justice Scott-Crane and her fellow judges - in a unanimous verdict - said the four had allowed the initial $1.35m judgment to remain in effect for two years without challenging it. As a result, they ruled there was no longer "a serious issue" left to be tried.

However, Mr Evans said he and his attorneys are not giving up. "We're still trying to see if we can have this ruling set aside," he said. "Everything; all options are on the table. We cannot leave it like this with ourselves declared bankrupt. Whatever we can do to set it aside we will attempt."