Judicial manager to face high-powered CLICO challenge
A combination of local and regional institutional and political forces, including the Freundel Stuart Administration, is preparing for a High Court battle against the Judicial Manager (JM) for the collapsed CLICO International Life Insurance Company in two weeks’ time.
A high-powered team of no fewer than six senior lawyers representing the Government, the Barbados Investors and Policyholders Alliance (BIPA), a separate group of policyholders and the St Kitts and Nevis-based East Caribbean Currency Union (ECCU), will all be seeking to have the court “shoot down” the Judicial Manager’s plans to liquidate CLICO and sell off its assets.
The High Court was originally scheduled on April 17, 20 and 21 to consider the application by the Judicial Manager to put CLICO into liquidation, but the hearing was adjourned and will now take place on June 16, 17 and 19.
Chairman of BIPA June Fowler told Barbados TODAY this afternoon that the entities involved would try to convince the court that the insurance company should not be liquidated and will separately argue their cases when the matter comes up for hearing.
Deloitte Consulting, through which the JM functions, has hired attorney-at-law Ramon Alleyne to handle its interests in the matter.
Alleyne and his team will be up against Queens’ Counsels Jennifer Edwards and Donna Brathwaite, along with Joanne Murphy of the Solicitor General’s Office. They are representing the Director of Finance and Planning.
The legal battle does not get any easier for the Judicial Manager, considering that three other QCs –– Sir Richard Cheltenham for the ECCU, Ralph Thorne for a group of policyholders and Alair Shepherd for BIPA –– will be objecting to the proposed liquidation of the embattled insurance firm.
Describing the upcoming hearing as “fireworks”, Fowler said she was keen to hear what the Government’s lawyers had to say, considering that Minister of Finance Chris Sinckler had publicly condemned the proposed liquidation as premature and unwarranted.
It was last December that Government announced that it had established a new company to initiate and manage its participation in implementing the Court-approved restructuring plan for CLICO International Life (CIL), saying that any attempts to place the firm or its associated companies into liquidation would be “premature, unwarranted and unnecessary”.
The announcement came on the heels of a statement from the Judicial Manager that it was going to liquidate the company due to a lack of funding in Barbados for the restructuring plan.
“No funding has been made available to date and consequently, the Judicial Manager has no alternative but to act on its August 25, 2014 recommendation to move towards liquidation,” said Deloitte.
However, last December, the Ministry of Finance and Economic Affairs said that the Government of Barbados could not under law transfer any financial resources directly to CLICO or the Judicial Managers from the Consolidated Fund.
“Such resources can and will be transferred to the new company for the management of its affairs and the execution of the proposed restructuring of CLICO once all of the necessary arrangements are in place,” the Ministry said, adding that the Judicial Managers were fully aware of this.
The Ministry had said that the seven Directors of the new company met with Sinckler and senior officials on December 11 to be briefed on their mandate and responsibilities.
The Ministry had also given the assurance that meetings would be held with “other critical stakeholders”, including the BIPA, as well as national and regional regulators.
The Directors of the new company are: Clennell Goodman (financial analyst) – Chairman; Wismar Greaves (former Supervisor of Insurance) – Deputy Chairman; Desiree Cherubin (former Central Banker and Financial Consultant); George Hutson (former Minister of International Business and Accountant); Stephen Alleyne (Attorney -at-Law); Kennedy Sawratsingh (Business and Financial Analyst) and the Director of Finance or his representative.
The BIPA head has already gone on record as expressing concern that if CLICO is liquidated, the policyholders and investors would be seriously disadvantaged with regard to the value of their returns and that pensions would also be under threat.