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CLICO LIGHT

SUNDAY SUN MARCH 2, 2014

CLICO LIGHT

by RICKY JORDAN

CLICO POLICYHOLDERS MAY be getting a dream offer from a North American firm, which wants to buy all of the assets of Clico International Life (CIL) Insurance Limited and repay the principal sums to the policyholders and investors in Barbados and the Eastern Caribbean.

The North American firm has been meeting with CIL’s judicial manager (JM) Deloitte Consulting Inc. as a result of correspondence going back to 2013.

The offer to purchase CIL’s $800 million-plus in assets, including large tracts of land, and ensure policyholders receive over $441 million, was contained in the proposal sent to the JM and Minister of Finance Chris Sinckler recently.

Delivered two days ago to Deloitte, the document obtained by the SUNDAY SUN confirmed the firm’s commitment that policyholders in Barbados and the Eastern Caribbean be restored their principal investment or “made whole for their principal”.

The prospective investors propose to rebrand the company, acquire all of the assets of CIL and ensure that the Government of Barbados achieves its own objective.

Asked why Barbados, a reputable source told the SUNDAY SUN that the woes of CIL were made known to them by an American-based Barbadian businessman.

However, the source added, they also knew that a local insurance company wanted to buy some of the assets, particularly land. “But that would hurt the policyholders very badly. This is a far better offer,” said the source.

“The company would be buying CIL lock, stock and barrel and have the financial capability to satisfy all the parties.” He added that the firm was a billion-dollar operation that had been doing business since the 1970s.

“Barbados has Trade Confirmers behind us and one doesn’t want that to happen again, not in the 21st century, especially when there are opportunities to avoid it,” he added.

The SUNDAY SUN understands that the company’s partners include some of the largest North American financial entities. Recently, Central Bank Governor Dr Delisle Worrell told regional media that a cooperative solution had been found to settle outstanding CLICO claims in Barbados and the Eastern Caribbean.

He said the latest report from Deloitte made to the court here provided a way forward which seemed fair to all stakeholders. CLICO and its sister company, British American Insurance Company (BAICO), collapsed in 2009, and on February 4, 2011 the Supervisor of Insurance in Barbados announced the appointment of a judicial manager.

Last July, the JM informed policyholders and other stakeholders that it had presented its final recommendations to the High Court, and based on discussions with the Ministry of Finance and the Central Bank of Barbados and subject to Cabinet’s approval, it was proposed that a new company be established to hold CIL’s portfolio of traditional insurance business and the restructured Executive Flexible Premium Annuities (EFPAs).

The ultimate aim is to create a viable insurance company which could be sold to an investor insurance company, and the decision on this matter is expected to include the approval of policyholders and investors.

The total value of the policyholder liabilities to be transferred to the new company was put at $542 million, consisting of $275 million of liabilities from Barbados and $275 million from the Eastern Caribbean Currency Union (ECCU).

The JM also presented a forensic report to the court but its scope did not cover all areas of CIL’s activities.

CLICO Judicial Manager’s Report

Click on each of the links below to view the documents comprising the CLICO Judicial Manager’s Report.
All documents are in PDF format.

ON GUARD!

Efforts by the Judicial Manager to get the High Court’s permission to seal the CLICO financial forensic report which was filed last Friday, is being fought in court by the Barbados Investors and Policyholders Alliance.

The judicial manager, represented by attorney Patrick Toppin, appeared in court today and submitted their final recommendations along with that report, with respect to the collapse of the insurance company.

Lead attorney for BIPA, Alair Shepherd, said today the alliance would be urging the court to reject an application by the judicial manager to have the forensic report sealed. Shepherd is insisting that the policyholders paid for that report and that everything related to the CLICO issue, would impact on them and therefore, they had a right to see the document. The judge has postponed, until Friday, July 12, hearing in that case, where the judicial manager is seeking further directions from the court on how next to proceed, now that the final recommendations and forensic report have been presented.

The court is also expected to rule on whether the forensic report should be sealed. If approval is given to seal it, the public would not have access to the document, which should reveal all the financial transactions of CLICO, leading up to its collapse.

A source close to the judicial manager told Barbados TODAY they had asked the judge to bring forward the date of hearing to an earlier time and was currently awaiting a response. In a separate matter, but related to CLICO, BIPA has filed two claims. Most of the parties to this case appeared in the Number 10 Supreme Court this morning, requesting that the Alliance be appointed to represent the policyholders in the proceedings of the judicial manager and also to act on behalf of CLICO and British American Insurance Company’s policyholders.

Their attorney, Shepherd said afterwards, that in those actions, BIPA was seeking to ensure that any losses incurred in the proceedings of the judicial manager, are paid to the policyholders by the Crown or Attorney- General on behalf of the supervisor of insurance, the company directors or auditors, PriceWaterHouse Coopers.

Shepherd said some of the directors in this action were requesting security for costs from BIPA. These directors, he explained, say the Alliance cannot bring any action of negligence against them, because the case had been filed outside of the statute of limitation.

But the attorney is rejecting such a position. Shepherd said while the policyholders did not want the forensic report sealed, their desire was for the judicial managers to get as much money as possible for the sake of the policyholders, and would therefore do nothing, to prevent that.

Attorney for the State, Donna Brathwaite gave notice that she would be seeking to have the name of the Attorney- General removed as a party to this case. This case was adjourned until October 21.

President of BIPA, June Fowler was upbeat regarding the “positive” progress of the issue declared her delight at how it was nearing a conclusion. Fowler said she was also pleased at being able to “sit down” and hold discussions with the judicial manager over the weekend.

No fewer than 13 defendants are being summoned. Among the high profile persons served were former Executive Chairman of CLICO Holdings (Barbados), Leroy Parris, and his Trinidad counterpart Lawrence Duprey, represented by Hal Gollop, QC; Leslie Haynes, Woodbine Davis, Anthony Ellis and Basil Springer, CLICO directors, represented by Elliott Mottlley, QC, and David Griffith, former Accountant-General and a director, whose counsel is Vernon Smith, QC.

Source: http://www.barbadostoday.bb/2013/07/01/on-guard/

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