A US$50 million High Court claim for payment against CL Financial (CLF) has been stayed indefinitely. The stay on the claim by British American Insurance Company Limited (BAICO), one of CLF’s subsidiaries which was part of the Government’s bailout agreement in 2009, was continued by Justice James Aboud yesterday.
BAICO will now have to prove its debt to CLF’s joint-liquidators. At a brief hearing yesterday, Deborah Peake, SC, who along with Ravi Heffes Doon represents BAICO, reminded Justice Aboud that a summary judgement had been applied for, after which the proceedings had been put on hold in October 2014.
She said a further request was made to have the stay lifted and summary judgement proceed. However, since then, the High Court has ordered the liquidation of CLF and there will be no necessity to obtain the summary judgement, Peake told the court. In granting the request, Justice Aboud said the stay shall remain in force until further notice, pending the outcome of the liquidation.
BAICO, in its 2011 lawsuit, claimed it was owed over US$50 million by CLF under the terms of a Promissory Note dated December 31, 1998. The Promissory Note had a maturity date of December 31, 2010, although the principal became due and payable in the event that CLF failed to settle the interest due on the loan.
A demand for payment was made but nothing was paid and attorneys for BAICO, which was placed under the control of the Central Bank as part of the bailout agreement, filed a lawsuit including a claim for US$39.575 million in principal and US$10.75M in accrued unpaid interest.
Attorney Stephen Singh appeared for CLF. According to a preliminary report by joint liquidators Hugh Dickson and Marcus Wide of international accounting firm Grant Thornton, CLF’s Management Accounts, dated June 30, show a shareholders’ deficiency of $3.44 billion, before taking into account the obligations to the Government as part of the 2009 bailout agreement.