CIB liquidator to admit €8m debt

A HIGH Court judge has reversed a 2019 decision of the Deposit Insurance Corporation (DIC), liquidator for Clico Investment Bank (CIB), to admit a debt of eight million € claimed by French-based international winery, Marie Brizard Wine and Spirits. The order was made by Justice Ronnie Boodoosingh in a ruling he delivered on an application by Brizard to reverse the liquidator’s order.

In 2006, Brizard’s predecessor company, Beverdere SA, transferred €25 million to Caribbean Money Market Brokers (CMMB) to be invested by Clico Investment Bank (CIB), both of which were CL Financial subsidiaries. CIB issued an investment note certificate (INC) acknowledging the investment.

Boodoosingh said from the evidence, it was clear that the money was not put in CIB but sent to an Angostura escrow account. Angostura is part of the CLF group. Brizard pursued proof-of-debt proceedings with the liquidator to have the debt of €25 million paid. DIC admitted to a debt of €17 million but asked for further proof of the payment into CIB.

In response to the claim by Brizard, the liquidator argued there was not sufficient evidence that the winery paid the money to CIB. The judge noted there was documentary evidence that CMMB received €25 million, and he had to determine whether DIC’s position was justified and whether it was a debt of CIB which it should admit.

Boodoosingh said the liquidator has not provided sufficient evidence to justify the court’s looking behind the INC. “If it does not have a record of the money being put into CIB’s accounts, then that may raise concerns. Here, however, we do have first-hand evidence as to what occurred with the money,” he said.

He pointed out that proof of debt did not equate with proof of deposit. “Once CIB receives it, the debt arose. CIB may have had other processes for money received in its group or related companies. We may even raise eyebrows at that. But what CIB did after with the money is not the investor’s concern as far as an entitlement to recovery goes,” he said.

Boodoosingh added that based on documentary and evidence given at trial, DIC did not have information to upset the clear evidence presented by Brizard. In reversing the decision, the judge stopped short of ordering interests and for specific sums to be paid by a particular date. He said he was not persuaded that it was open to the court to make such an order, and Brizard cannot be given special treatment since all the court can do is consider whether the liquidator’s decision should be affirmed, reversed or varied.

“The liquidator has knowledge of the assets and the rank of claims and when it can appropriately make payments and how much. There are also prior orders of the court affecting creditors,” he said.

He also pointed out there was evidence that dividends were paid on the €17 million, adding that it can best be left to DIC to make such payments as they arise in accordance with prior orders of the court and consistent with the other payments being made.

Brizard was represented by Ramesh Lawrence Maharaj, SC, Ronnie Bissessar and Varin Gopaul-Gosine. DIC was represented by Ian Benjamin, SC, Pierre Rudder and Elena Araujo.