NiQuan faces new crisis as ex-VP seeks liquidation

THE FINANCIALLY-crippled gas-to-liquids company NiQuan Energy is facing a new crisis.

Its former vice president for global services is seeking the company’s liquidation so he can recover the $21 million court-ordered payout owed to him for breach of a written separation agreement.

The hearing of David Small’s winding-up petition has been set for May 2.

But a commercial bank which holds a short-term note instrument from NiQuan to 20 note-holders from various countries, Republic Bank Ltd, has warned any order to liquidate the company “could potentially jeopardise” an attempt to “rehabilitate NiQuan” – which could take between 8-12 months – to the detriment of creditors.

The bank’s attorneys said in a letter to the registrar of the Supreme Court: “For example, such an order will render material operating contracts imminently terminable, thereby severely restricting options for access to financing.

“Similarly, it is often the case that there are differences in objectives between a liquidator and a rehabilitation of the company.”

The bank also intends to seek an adjournment of the winding-up petition before Justice Westmin James so it can formally participate in the proceedings.

The letter to the registrar, from attorney Jonathan Walker, said the short-term note instrument covered a debt owed by NiQuan to the 20 note holders in the amount of US$ 175,000,000.

In an order on March 20 James also set June 25 as the tentative trial date for the petition.

Small’s action comes after James ordered NiQuan on September 29, 2023 to compensate him for a breach of his exit agreement.

The winding-up petition said after entry of the judgment, Small made a demand for payment on October 30, 2023.

It also said on January 15, the Court of Appeal dismissed NiQuan’s application for a stay.

“Therefore, that debt is due and outstanding.”

Small has since notified several banks and financial institutions – eight in all – of the judgment debt.

“The petitioner has, on more than one occasion, requested that the company pay its debt, but the company has failed and/or neglected and/or refused to pay the same or any part thereof.

“The company is unable to pay its debts. In the circumstances, it is just and equitable that the company should be wound up.”

Small’s attorneys Anand Ramlogan, SC, Jared Jagroo and Natasha Bisram filed his petition on February 1.

In response, attorneys for seven entities, all financial institutions, as well as a major contractor, wrote to the court to tell the judge their clients were also creditors to NiQuan "for substantial sums."

Attorney Karina Singh wrote, "In light of our clients’ interests and the nature of these proceedings, in order to ensure an equitable and orderly processing of creditors’ claims against NiQuan, we write to give notice of our clients’ interests as legitimate creditors and our instructions are to take steps to secure the preservation of their respective rights and interests that may be affected in the course of these proceedings."

When James made the payment order in Small’s favour, he was critical of Niquan’s conduct, labelling it “reprehensible.”

Small, a former independent senator, left the company in November 2021. He contended NiQuan breached a settlement agreement and he was entitled to a total of $18,575,880.40, representing his salary, accrued vacation, ex-gratia payment and a one-time $12.8 million bonus on the financial close of the World GTL plant.

The judge agreed that NiQuan breached the agreement by failing to fulfil its obligations, and also ruled that there was no condition attached to prevent the company from keeping with the agreed payment schedule.

“The behaviour, improper motives which fashioned the action undertaken by the defendant and the pure unfairness, as well as unequal treatment, has to be condemned.

“In light of all the facts, I do think the conduct of the defendant must be punished and a proportionate award of aggravated damages must be made so as to reflect the blameworthiness of the defendant's conduct and to signal that it will not be tolerated or condoned by the court,” the judge said in his ten-page ruling.

In its defence, NiQuan contended Small “always knew” that it would not be able to pay his accrued salary until after the commercialisation of its GTL plant.

Also in defence of Small’s claim, NiQuan contended that payment of the $12.8 million bonus was contingent on the successful close of the bond refinancing which was scheduled to take place in December 2022, once it received it.