Shareholders of CL Financial (CLF) who are opposed to the conglomerate being liquidated and who are willing to repay $15B owed to Government, have been shut out of the State’s winding-up petition in the High Court.
In an oral ruling yesterday, Justice Kevin Ramcharan held that although there was no dispute that the group DALCO were shareholders of CLF, DALCO advanced no evidence that it had sufficient interests to be heard in opposition of the petition.
He further ruled that the shareholders failed to show that the conglomerate was not insolvent, as claimed by Government and held that the 13 shareholders – which comprise two groups and who in July abandoned a move to change the composition of the government-controlled board – did not advance evidence that Government had ulterior motives for seeking to have the company liquidated, other than to recover over $15 billion owed as part of the 2009 bailout of the then cash-strapped insurance giant Clico, a subsidiary of CLF.
An appeal of the judge’s decision has already been lodged and a request for a stay of execution of the ruling was objected to by the State. The shareholders have been advised to approach the Court of Appeal for a stay even as hearing of the petition continues this Friday before Justice Ramcharan.
Additionally, up to yesterday, the shareholders still had not settled their legal representation. On Monday, hearing of the petition had to be adjourned when a group of shareholders found itself unrepresented because legal fees were not paid. Both groups may find themselves having to pay an additional order for costs, having failed to convince Justice Ramcharan that they should be heard in opposition of the winding-up petition being granted.
In July, Ramcharan deemed the hearing of the State’s petition sufficiently urgent to be heard during the court’s vacation and denied any further adjournment. On Monday, he ordered that the shareholders pay the State’s costs for the delay and yesterday reserved his ruling on the additional order.