Central Bank's lawsuit against Lawrence Duprey, others will go on

A decade-old lawsuit against late CL Financial jefe Lawrence Duprey and five others is likely to go to trial in late 2025.

A trial window will be settled on January 30, 2025, when the lawsuit by Central Bank and Colonial Life Insurance Company (Clico) against Duprey and the others comes up for a pre-trial review hearing.

Civil proceedings were filed against Duprey, Andre Monteil, CL Financial, Dalco Capital Management and Stone Street Capital Ltd – companies both men were affiliated with — as well as Gita Sakal, a former CLF corporate secretary. They arise from the failure of Clico which resulted in the Central Bank having to exercise its emergency powers under Section 44D of the Central Bank Act in respect of the insurance giant.

The lawsuit alleges that Clico’s operation was “grossly deficient,” claiming the interests of policyholders and mutual fund investors were used for funding personal needs and lifestyle, as well as private companies.

The legal proceedings were initiated in 2011 against the five, seeking what could amount to billions of dollars.

Justice Robin Mohammed is presiding over the lawsuit. At a hearing on October 7, the Central Bank’s lead attorney, Michael Hylton, KC, told him they were aware of Duprey’s death.

Duprey, 89, died on August 24.

Attorney Russell Huggins said an application was made for Duprey’s estate to be substituted, in keeping with the civil proceedings rules.

The judge ordered witness statements and other evidence to be provided to Duprey’s estate. He also encouraged attorneys to discuss possible trial dates before the next hearing, as dates in October 2025 had been previously considered.

The lawsuit requires Duprey, Monteil and Sakal to answer why the conglomerate failed, taking with it millions of dollars of investments of policyholders and investors and threatening the stability of the country’s economy. They have been accused of mismanaging Clico and misapplying and misappropriating the insurance giant’s income and assets, to the detriment of its policyholders and mutual fund investors.

The lawsuit – amended in 2013 – claims several billion dollars in losses suffered, as well as damages and restitution.

The Central Bank and the Government took control of the conglomerate and its banking and insurance subsidiaries in January 2009, after Duprey sought a bailout when Clico and CIB’s liquidity problems were made public.

It almost immediately faced a slew of policyholder lawsuits stemming from its inability to pay claims as they fell due. The prized Clico was said to be weighed down with policyholders’ liabilities of more than $12 billion.

At that time CL Financial controlled over $100 billion of assets in at least 72 companies in 32 countries throughout the region and the world, and its financial interests covered several industry sectors, including banking and financial services, energy, real estate, manufacturing and distribution.

In the months after its bailout, the financially-stricken Clico reportedly sucked up more than $5 billion in taxpayers’ money.

Towards the end of 2008, having determined that there was a significant deficit in Clico’s statutory fund in 2007, the Central Bank was said to have become concerned about the state of the fund and contacted the company’s officials. Clico was described as a “cash cow” and the “cash engine” for CL Financial.

The lawsuit also alleges that there was no proper governance of Clico, CL Financial or CIB.

An Ernst and Young report noted that CIB “would have probably been deemed insolvent in 2007.”

In the 2025 budget, Finance Minister Colm Imbert said the Government intends to sell its 49 per cent shareholding in Clico. He also said approximately $13 billion is still owed for the bailout of CLF.

Also appearing for the Central Bank and Clico are Ian Benjamin, SC, Roger Kawalsingh and Elena Araujo. Bronnock Reid represents CLF and its liquidator David Holukoff; Justin Phelps, SC, Ronald Boynes and Chase Pegus represent Dalco; Andre Rudder represents Monteil and Stone Street; and John Jeremie, SC, Frederick Gilkes and Alana Rambarran represent Sakal.