TRINIDAD-COURT-Government gets nod to liquidate CFL

PORT OF SPAIN, Trinidad, Jul. 26, CMC – The government has been granted permission to appoint provisional liquidators to preserve the assets of CL Financial as it seeks to recover a $15 billion debt left from the 2009 bailout of the conglomerate’s insurance subsidiaries Colonial Life Insurance Company (Clico) and British American Insurance Company (BAICO).
In the ruling handed down late Tuesday, appellate court judges Peter Rajkumar, Andre des Vignes and Charmaine Pemberton overturned a ruling by Justice Kevin Ramcharan and granted Government’s application for the appointment of two provisional liquidators.
The court also varied the orders sought by the Government as relative to the powers of the provisional liquidators.
Rajkumar told the court that the reversal of Justice Ramcharan’s ruling given last Wednesday, was justified and weighed heavily in favour of the application to preserve and protect the further dissipation of CLF assets, in the public’s interest, as taxpayers are the conglomerate’s major creditors.
Based on this ruling, Hugh Dickson and Marcus Wide of international accounting firm Grant Thornton, will be appointed joint provisional liquidators in accordance with provisions set out in the appellate judges’ order.
Senior Counsel Deborah Peake who represented Government at the hearing, insisted the State did not rush to have the company wound-up. “We came to court when it became clear the company does not have the assets to pay its debt,” she said. “An insolvent company is not supposed to be trading.
This company is not temporarily insolvent, this company is chronically insolvent.
“Since 2009, government has been in rescue mode to see what can be done to recover the debt without liquidation. But there comes a time when enough is enough. This application is to stop the haemorrhaging of the company,” Peake said.
The hearing on Tuesday, was deemed urgent by government as there was the possibility that a meeting of CLF shareholders also carded for yesterday, would have seen them appointing Kirk Carpenter and Carlton Reis to the board which would have given majority shareholders control of the board and thus, control of the company.
As it stands, government controls the CLF Board by a four to three margin.