The Tribune

The former directors of The Bahamas’ first-ever crowd-funding platform have pledged “to take no further steps” to advance their legal battle with Bank of The Bahamas under the terms of its full winding-up.

D’Arcy Rahming, ArawakX’s principal, and his son, D’Arcy junior, have agreed as part of the May 22, 2024, order that appoints Ed Rahming, the Intelisys (Bahamas) principal, and Cheryl Simms, the Kikivarakis and Company accountant, as full liquidators that they will do nothing regarding the platform’s claim against the BISX-listed bank without the latter duo’s permission.

This ensures full control of the Bank of The Bahamas litigation rests with the liquidators, as is required by insolvency law, but represents a variation to November 2023’s joint provisional liquidation order. That allowed the Rahmings to “maintain conduct and control” of the court battle with the bank on the understanding that all legal costs would be covered by themselves personally, not the company or its creditors.

Now, the full liquidation order stipulates: “The (former directors) of the company hereby undertake to take no further steps in the conduct of Supreme Court action 1,649 of 2022 between the company and Bank of the Bahamas without the consent of the joint official liquidators.

“The joint official liquidators shall review the matter and consider whether it is a viable action and, where appropriate, the joint official liquidators shall apply to the court for directions in the further conduct of the said action and the right of the (former) directors to maintain control and conduct of the said action.” Again, any costs that arise would have to be covered by the Rahmings personally.

Tribune Business understands that it took more than two months following the March 2024 court hearing, which confirmed ArawakX would be wound-up, to get the Order signed, perfected and filed due to negotiations with the Rahmings on the language relating to the Bank of The Bahamas dispute.

The legal dispute concerns when Bank of The Bahamas froze all ArawakX’s bank accounts on November 1, 2022, amid confusion as to whether it was the crowd-funding platform’s two principals, the Rahmings, or their largest investor, James Campbell, who had authority and control over them.

In its statement of claim against Bank of The Bahamas, the crowd-funding platform and its parent, MDollaz, said it first learned of a problem when Tianna Gomez, a client relationship officer, informed ArawakX’s vice-president of clearing, Ken Donathan, on October 24, 2022, that it was unable to process a $48,900 payment to Foot and Ankle International.

This represented a payment of investor monies to Dr Daniel Johnson’s business, Footcare RX, which had been raised from a crowd-funding issue via ArawakX. The latter alleged that it was then informed by Yvette Johnson, Bank of The Bahamas’ manager of premier and private banking, that its accounts were frozen following a meeting with Mr Campbell.

“The bank was visited yesterday (October 20, 2022) by Mr James Campbell, who provided an amendment to the Memorandum and Articles of Association which introduced new articles specific to overriding provisions for the captioned company,” Ms Johnson allegedly wrote.

“In light of the above, effective immediately all accounts have been placed on hold and actively ceased as a result of the untenable position the bank is presented with.”

Other legal documents allege that a new Memorandum and Articles of Association for ArawakX were drawn up to facilitate Mr Campbell, as its largest investor, becoming a director with an option to convert his $1.3m into a 22 percent equity stake.

However, the Rahmings have alleged these were never ratified, and they subsequently moved to unwind them amid a battle for control of the crowd-funding platform with the former Colina Insurance Company president.

ArawakX was seeking damages from Bank of The Bahamas for breach of contract, injury to its credit and reputation and alleged “unlawful interference” with its business relationships, plus aggravated damages. No dollar figure, though, was specified in the statement of claim.