The Tribune

• Butler: Andros ‘isolation’ delayed filing

• Bidding to overturn default judgement

• QC blasts ‘naked 11th hour’ time play

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Sky Bahamas’ former principal says he failed to meet the deadline for filing a defence to the $28m “bogus loan conspiracy” claims against him because he contracted COVID-19.

Captain Randy Butler, in a January 26, 2021, affidavit obtained by Tribune Business, asserts that his positive test and subsequent Andros “isolation” meant he was unable to consult with his attorney on how to combat the allegations brought by Fred Kaiser, Sky Bahamas’ former financier.

The former airline chief’s COVID-19 revelation came as he and his attorney, Michael Horton, made good on their pledge that they would immediately seek to overturn Mr Kaiser’s bid to obtain a default judgment against him and Sky Bahamas.

Within 24 hours of the default judgment’s filing on January 25, a summons was filed with the Supreme Court on Captain Butler’s behalf urging that it “be set aside on the ground that the judgment is premature and invalid” because no judge had given permission for it to be filed.

He is also demanding that Mr Kaiser and his companies, Alpha Aviation and Advanced Aviation, be ordered within ten days to provide “further and better particulars” of the allegations against them so he and Sky Bahamas can submit a defence.

Once those details are obtained, Captain Butler is asking that the Supreme Court give him 14 days to file and “that there be no further action” taken by Mr Kaiser to pursue his claim until the “particulars” he is seeking be provided.

The documents obtained by Tribune Business show, though, that Sky Bahamas’ financier had already voluntarily extended the time for Captain Butler to file his defence beyond the legally stipulated deadline. And his “11th hour” bid to obtain a further extension received the brush-off from Mr Kaiser’s attorney, Michael Scott QC, who subsequently sought the default judgment in response.

Captain Butler, in his affidavit, said he and Mr Horton requested an extension until end-January 2021 to file a defence on behalf of himself and the two corporate defendants, Sky Bahamas and Aviation Oversight Group (AOG), but Mr Scott only gave them until January 22.

Explaining the reasons for the delay, Captain Butler asserted: “My instructions could not be completed in time due to a number of reasons but, significantly, I was unable to consult with my attorney due to my having tested positive for the coronavirus and, as a result, had to remain in isolation in Andros while I recovered.

“As I was advised, and verily believe, it was essential in the circumstances that a request for further and better particulars of the plaintiffs’ claim be sent to the defendants’ attorney to enable the defendants to file and serve proper defences.”

Reiterating Mr Horton’s argument that the Supreme Court’s permission first has to be obtained to file a default judgment in an action involving allegations of fraud and conspiracy, such as Mr Kaiser’s claim, Captain Butler added: “The case is a complex one.

“The plaintiffs’ rush to judgment does not allow the allegations made against me and my co-defendants to be defended properly without the further and better particulars we have requested.... I say, with much humility, that justice in this case requires that the plaintiffs should define the accusations they have levelled against us and not make broad allegations of wrongdoing.”

Mr Horton, four days before the January 22 defence filing deadline, had written to Mr Scott seeking the “better particulars” and extended timeframe he now wants the court to order.

However, Mr Scott, noting that Mr Kaiser’s writ and statement of claim had been served more than two months prior on November 19, 2020, branded the request as “a naked and disingenuous attempt to purchase additional time for your client”.

Captain Butler alleged such a description was “improper”, but Mr Scott added that it was made “at the 11th hour” just days before the voluntary extension expired. He also retorted that “at no time was there a legitimate commercial loan or series of loans between the respective parties”.

This was in response to Mr Horton’s January 18, 2021, letter that requested a variety of dates, times and further details on the alleged “bogus loans” received by Sky Bahamas and AOG. Tribune Business, though, understands that Mr Kaiser and his attorney are taking the position that such information should only be disclosed in the “discovery” process - not before a defence is filed.

They are now waiting to see how the legal process plays out, and whether Captain Butler is successful in having the default judgment against himself and Sky Bahamas overturned, before determining their next move.

Claims by Mr Kaiser that he was defrauded of $28m via sham loans triggered the resignation of former deputy prime minister and minister of finance, K Peter Turnquest, even though he was not named as a defendant in the original writ.

Mr Turnquest, who like Captain Butler is vehemently denying the allegations in that document, was described as “a director and manager” of both Mr Kaiser’s plaintiff companies, as well as “owning and/or controlling and/or managing” Sky Bahamas. The former deputy prime minister, however, was not named in the default judgment filing.

Mr Kaiser, whose main business interest, Alpha Technologies, agreed in 2004 to pay some $36m to the Internal Revenue Service (IRS) after pleading guilty to tax fraud, is alleging that Captain Butler and Mr Turnquest engineered a decade-long conspiracy that lasted until 2017 “to enrich themselves” by defrauding his companies while concealing their activities.

The statement of claim, which has been seen by Tribune Business, claimed that the duo “dishonestly caused” Alpha Aviation and Advanced Aviation to “pay away” $20.68m and $5.917m, respectively, to Sky Bahamas via “some kind of bogus loans”.

No particulars were given to describe how the scheme worked, although Mr Kaiser’s companies alleged that Mr Turnquest and Captain Butler then used “some 39 fraudulent invoices and/or book entries, and for no adequate consideration”, to drain away some $3.8m paid by Alpha Aviation to Aviation Oversight Group via 39 separate cheque payments between February 2008 and July 2016.

A further $3.026m was also alleged to have been siphoned off by the duo “as at December 31, 2017, to AOG Maintenance Ltd, a company that owned Sky Bahamas’ maintenance hangar at Lynden Pindling International Airport.