The Tribune

• Gomez blasts US suit as ‘really grasping at straws’

• Court shutdown-defying dolphin facility at its heart

• Principal in bankruptcy protection amid fraud claims

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

An ex-Cabinet minister yesterday slammed as “ridiculous” an escalating legal battle that he has become embroiled in over a controversial New Providence dolphin attraction that was ordered to close by the Supreme Court.

Damian Gomez QC, former minister of state for legal affairs, told Tribune Business that the US court-appointed bankruptcy trustee for Blackbeard’s Cay developer, Samir Andrawos, was “really grasping at straws” by seeking to prevent him recovering $1.25m in outstanding legal fees owed by the tourist attraction.

He hit back after Lawrence Katz, the trustee, filed a Good Friday lawsuit in the Maryland federal bankruptcy court that aims to stop Mr Gomez selling Mr Andrawos’ 50 percent stake in Blue Illusions, the company created to own the dolphin attraction frequented by Carnival’s cruise passengers prior to COVID-19, and recover that alleged debt.

Asserting that the half-ownership of Blue Illusions is the property of Mr Andrawos’ bankruptcy estate, and for the benefit of all creditors not just Mr Gomez, the trustee also alleged he was acting to prevent what was described as a “fraudulent and/or preferential transfer” to the former minister.

This, though, ignores a series of Bahamian Supreme Court rulings obtained last year by Mr Gomez that permitted him to seize 50 percent of Blue Illusions’ shares and subsequently sell this interest to recover the debt owed to him. The former minister has yet to act on the Supreme Court’s Order, though, and has pledged to give the trustee, Mr Andrawos and the latter’s other creditors 45 days’ notice before he auctions that stake off.

Mr Gomez, who yesterday said he was “astonished” by the trustee’s actions, added that his recent appointment as The Bahamas’ ambassador-at-large to the Inter-American Council on Human Rights (IACHR) effectively gives him diplomatic immunity from being served with the court proceedings and dragged into them.

He suggested the Maryland federal bankruptcy court lacked legal jurisdiction over The Bahamas, and there was no relevant judicial treaty between this nation and the US. The trustee would thus have to come to The Bahamas and initiate legal proceedings here, but Mr Gomez suggested he would have difficulty in being recognised by the Supreme Court as having any standing as Chapter 11 personal bankruptcy - as used by Mr Andrawos - does not exist here.

“As I said to the other creditors, The Bahamas doesn’t have a treaty with the US,” Mr Gomez told Tribune Business. “And I’m now an ambassador, so there’s no way in the world he has jurisdiction over me personally. I’m required from time to time to visit Washington D. C. It’s inconceivable they could serve me with papers in breach of international law.

“I’m trying to figure out what this is about. Even if they come here they would have to demonstrate some basis for being recognised as trustee in bankruptcy. Our laws are significantly different to theirs. You cannot do that here; put yourself in Chapter 11 bankruptcy protection. Why should I subject myself to sharing with other people who chose to sue him [Mr Andrawos] where they’ve sued him? If he has no assets over there, it’s not may fault.”

Court filings obtained by Tribune Business reveal that Mr Andrawos’ creditors view Blackbeard’s Cay, located just off New Providence’s north coast on Balmoral Island opposite Sandals Royal Bahamian, as their best source of debt recovery. They allege that financial records show the dolphin attraction and other amenities were generating $7m per year in annual revenue, or a collective $49m over seven years prior to the COVID-19 pandemic.

The bankruptcy trustee, in his April 15, 2022, lawsuit alleged that Mr Andrawos had given “sworn testimony” that Mr Gomez had never acted as his attorney and nor did a contract exist for him to provide such services. This, though, is contradicted by previous Tribune Business reports that described Mr Gomez and now-national security minister, Wayne Munroe QC, as representing Blue Illusions in a bid to overturn the Supreme Court ruling that ordered its closure.

“I did for years,” Mr Gomez replied, rejecting the trustee’s assertion that he never represented Mr Andrawos. “I’m a bit puzzled by this. They make some assertions on the basis of belief, but never say what their belief is.

“I wrote a letter to the other creditors saying don’t anticipate that you have jurisdiction over me in a US court. I’m a Bahamian citizen, and have no assets in the US. My arguments were with Mr Andrawos in The Bahamas, and he was sued in The Bahamas where he was residing. How do you expect me to accept your position?”

Arguing that his promise to give 45 days’ notice if he chose to sell the Blue Illusions’ interest was “an enormous amount of time”, Mr Gomez added: “To say, having done that, that I’m somehow behaving fraudulently is ridiculous. I just don’t understand it. How are they going to enforce any judgment they get over there if I decide not to enter an appearance or do anything over there? They’re grasping at straws.”

Mr Gomez’s view on the Maryland bankruptcy court’s lack of jurisdiction was backed by other Bahamian attorneys. “Nothing the trustee does over there makes any difference,” one said, speaking on condition of anonymity. “The bankruptcy jurisdiction doesn’t extend extra-territorially from the US.”

Blackbeard’s Cay operated in defiance of a Supreme Court ruling that effectively ordered its closure, quashing the approvals and permits it had been granted by the Government to operate, following a Judicial Review action brought by the environmental activists, reEarth. It remained in business for six further years, with no enforcement action taken by the authorities to enforce its shut down until COVID-19 forced all activities to cease.

“It was sickening for the rule of law,” one attorney said of the inaction. Sam Duncombe, reEarth’s president, yesterday told Tribune Business she had been unable to discover the fate of the project’s eight dolphins and whether they were still here in The Bahamas, at another location locally or had been returned to Honduras.

Mr Munroe and Mr Gomez at one stage succeeded in obtaining a Supreme Court injunction barring Blackbeard’s Cay’s closure, but Mrs Duncombe said: “The law did not take its course. He [Mr Andrawos] was never made to shut down. He continued to operate. The ministry [agriculture and fisheries] was supposed to take over the dolphins and find somewhere for them to go. If they did or didn’t, no one is telling me where those animals are gone.

“There is a lot of unfinished business once again. There was all kinds of information about how Mr Andrawos conducted business in other Caribbean islands and no one wanted to pay attention to that. It was up to the police to shut him down and nothing ever happened with that. He continued to operate until COVID basically shut the country down.”

Defying the Supreme Court, though, appears not to have produced long-term financial benefits for Mr Andrawos. Court filings show him as massively insolvent, with just $1.09m in assets versus $36.641m in total liabilities. He also pegged his combined monthly income at $1,998 versus expenses of $11,466.

However, his main creditor, SuttonGate Holdings, in successfully pushing for the court-appointed trustee’s appointment alleged that Mr Andrawos was constantly seeking to evade repaying his debts by making “multiple fraudulent transfers” of assets to his wife, daughter and business partner. It even suggested in a December 22, 2021, legal filing that Mr Gomez’s seizure and sale of the 50 percent Blue Illusions stake was part of this scheme.

While several sources yesterday questioned whether any value remains in Blue Illusions, SuttonGate alleged that it “holds a valuable long-term lease for an island in The Bahamas known as Balmoral Island”. It claimed that a company controlled by Mr Andrawos’ wife had also obtained a “charging order” over Blue Illusions’ assets - something that was described as a further effort to keep his assets away from creditors.

“The debtor’s interest in Blue Illusions is the subject of other questionable proceedings in The Bahamas by yet another purported creditor of the debtor, and immediate action must be taken in The Bahamas to preserve the debtor’s interest in Blue Illusions from being lost as a valuable asset of the estate,” SuttonGate alleged in relation to Mr Gomez.

“According to documentation produced by the debtor and Iglesias [Mr Andrawos’ business partner], they each invested $5m in Balmoral Island to build various tourist attractions, including a water park and a dolphin theme park. The debtor’s interest in Blue Illusions may be the most valuable asset within the debtor’s bankruptcy estate and should be a significant source for creditor recoveries in this case.

“However, the debtor claims to no longer own his 50 percent interest in Blue Illusions because, after the petition date, he allowed Damian Gomez, an alleged creditor in The Bahamas, to auction the debtor’s interest ostensibly to pay $1.25m in purported legal fees - even though Blue Illusions, which has generated $7m per year, is worth far more,” SuttonGate added.

“There are serious questions as to whether the debtor personally was liable for any of the legal fees claimed by Gomez, yet it appears the debtor allowed Gomez to obtain a default judgment against him, and Gomez now claims that he has control or ownership of the debtor’s interest in Blue Illusions.”

SuttonGate continued: “Although the facts are unclear at this time, the recent events surrounding Gomez’s purported post-petition seizure of the Debtor’s 50 percent interest in Blue Illusions suggest that it may be yet another scheme by the debtor to avoid paying his legitimate creditors. For example, as noted above, the debtor disclosed Gomez’s purported appropriation of Blue Illusions in schedules filed more than a week before the sale actually occurred.

“Yet neither the debtor nor his counsel took any action to advise the court in The Bahamas of the existence of this bankruptcy case notwithstanding their knowledge of Gomez’s purported judgment. This inaction stands in stark contrast to the debtor’s unrelenting efforts - including his consent to a sham judgment - to prevent SuttonGate from enforcing its judgment lien against the very same asset.”

However, Dywan Rodgers, of Meridian Law Chambers, who represents Mr Gomez, wrote on December 2, 2021, that Mr Gomez “has not immediate intention to sell his shares in Blue Illusions and will give you 45 days’ notice should he wish to sell his shares in Blue Illusions”.

The letter to John Wilson QC, senior partner at McKinney, Bancroft & Hughes, who is acting for SuttonGate and multiple other creditors of Mr Andrawos, added: “Currently, Mr Gomez’s intention is to cause an annual shareholders’ meeting to be held in respect of Blue Illusions Ltd and, during same, cause a full accounting of the assets held by Blue Illusions and of its operations within The Bahamas....

“Mr Gomez is cognisant of the dolphins kept at the facility on Balmoral Island and, during the annual general meeting of Blue Illusions, inquiries shall be made about their health, maintenance and any related expenses for their upkeep. It is feared that the cost of the upkeep of the dolphins is very expensive. Mr Rodgers added that any income generated by Blue Illusions would be “secured in a corporate bank account within The Bahamas”.