The Government of Guyana has hired attorney John Wilson of McKinney Bancroft & Hughes to challenge the proposal made by the liquidator of CLICO (Bahamas) Craig Gomez to classify the local company’s US$34 million investment in the Bahamian company as a related party loan.
The Bahamian liquidator had made this announcement a few weeks ago after which, President Bharrat Jagdeo announced the government’s intention to challenge this classification.
According to a report published in yesterday’s edition of the Nassau Guardian, the law firm is currently looking at information in relation to Guyana’s claim in an effort to support it. Wilson said that “while the lawyers have not yet settled on the formulation of CLICO Guyana’s claim, what is certain is that we do not agree with the provisional liquidation’s view of the liquidation in relation to his characterization of CLICO Guyana.”
Shortly after CLICO (Bahamas) had been placed into liquidation on February 24, the Guyana government had reportedly entered discussions with other Bahamian attorneys and firms about representation, but never followed through with those relationships, the report stated.
Meanwhile, the report stated that “it is not clear at this point whether he has concluded that examination, or when Wilson intends to file a formal claim on Guyana’s behalf.”
The article also said that the Government of Guyana is reportedly looking to be part of any creditors’ committee that may be established. That committee would assist in the oversight of the liquidator’s function and provide advice from the perspective of creditors to protect their interests.
Gomez, in his liquidation report filed in the Supreme Court last month, confirmed that he had received policy claim packages from CLICO Guyana and CLICO Suriname. Guyana is claiming US$34 million in policies with CLICO Bahamas, and Suriname claiming US$15.5 million.
“My preliminary review of these packages supports the view that Guyana and Suriname did conduct business with the Bahamas office of CLICO,” the liquidator said.
CLICO (Guyana) invested $6.9 billion (US$34 million) in CLICO (Bahamas) which represented 53 per cent of the local company’s assets. Although these investments were liquid on paper, investigations have revealed that this sum has been tied up in real estate investments that CLICO (Bahamas) had in Florida through subsidiaries. When CLICO (Bahamas) was ordered liquidated on February 24, the local company was subsequently placed under judicial management.
The Bahamian company was then ordered wound up on April 7, by Justice Cheryl Albury, a move which makes the prospect of CLICO (Guyana) recovering its $6.9 billion (US$ 34 million) dim. Justice Albury’s ruling means that all of the company’s assets will be sold to pay off its creditors, and the remaining assets, if any are available, will be distributed to the principals of the company.
