(Trinidad Express) Former executive chairman of CL Financial Lawrence Duprey was ordered by a Florida judge in July to pay more than US$60 million to British American Insurance Company (BAICO) in damages in relation to the TT$1.9 billion Green Island project in Osceola County, Florida.
The insurance company had taken Duprey and one of its former executives, chairman Brian Branker to court claiming a breach of fiduciary duties on their part by allowing it to pump billions of dollars into the real estate transaction which was executed by BAICO and British American Isle of Venice in January 2008 for the purchase price of US$295 million.
Duprey and Branker were ordered by Judge Erik P Kimball of the United States Bankruptcy Court in the South District of Florida on July 31 to each pay BAICO US$61,318,225, a total of US$122,636,450.
Court documents stated that the companies had pursued the land transaction that resulted in a loss allegedly exceeding $100 million.
This loss was a primary cause of the insolvency of the companies and their multi-national insolvency proceedings. It went on to state that Duprey was provided with due process in that he was personally served with process at the start of the case in January 2012 and the next month, he, through counsel, moved the court to dismiss the original complaint for lack of subject matter jurisdiction. However, this application was denied by the court in February 2013.
The order denying the motion to dismiss was served on attorneys for Duprey on March 2 that year. He was given 14 days within which to file an answer, but failed to do so.
In August of that year, Duprey’s attorney withdrew from the case.
Between then and 2015, the court had granted permission for the companies to amend their claim and these amended complaints were sent to Duprey’s residence in Ft Lauderdale, Florida.
“In the ensuing two years, Mr Duprey did nothing at all with regard to this case. In contrast, during that time the companies were quite active. With defaults in hand against Mr Duprey and certain other parties allegedly central to the failed real estate transaction, the companies negotiated with a number of other defendants and entered into settlements for amounts far below the total damages allegedly suffered by the companies.
“Had the companies believed that they would have to go to trial against Mr Duprey, the marginal cost of going to trial against the settling defendants would have been low, significantly reducing the companies’ incentive to settle with them. During this time the companies participated in extensive discovery with other defendants.
“But, because Mr Duprey had been defaulted, the companies served no discovery on Mr Duprey relating to his involvement in the subject real estate transaction,” court documents stated.
The documents further stated that in October 2015, having finalised negotiations with other defendants and finding themselves ready to conclude this case, the companies properly and timely filed the Motion for Judgment against Duprey and Branker.
Three weeks later, more than two years after his prior counsel was permitted to withdraw in 2013, replacement counsel for Duprey filed notices of appearance.
Duprey then filed a response to the Motion for Judgment and also filed the Motion to Vacate.
He argued that the Court should either dismiss the amended complaint or vacate the clerk’s default because the companies allegedly failed to properly serve him with the amended summons. He had also argued that his inactivity between 2013 and 2015 was not willful because he was 81 years old and his counsel withdrew from this case, and thus he did not realise he had an obligation to respond to the original complaint after denial of his motion to dismiss or to the amended complaint.
However, that Motion to Vacate was also eventually denied and the companies’ Motion for Default Judgment granted.
But the court said even though the amended complaint well pleaded with regard to the claims against Duprey and Branker, it stated that the amended complaint did not present a specific request for damages.
The court said it was appropriate to require the companies to present evidence on the issue of damages and to permit Duprey and Branker to contest that evidence.
In the end, the court found that the Motion for Judgment should be granted in part, ruling that Duprey and Branker shall be held liable for damages.
The Express was unable to confirm yesterday if the court’s ruling had been appealed.