Govt gets go-ahead to liquidate CLF

In a late evening ruling yesterday, 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.

In delivering their reasons, Justice Rajkumar said 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.

As a result of yesterday’s 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. Hearing of the winding-up petition, which came up before Justice Ramcharan yesterday, was adjourned to today.

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.

Yesterday’s hearing 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.

Attorneys representing the United Shareholders Group (USG) led by Carpenter and DALCO, represented by Reis, both of which together holds 60 percent of the shareholding in CLF, contended that Justice Ramcharan asked the right questions in law and correctly applied the test in determining whether provisional liquidators are to be appointed for CLF. As the principal creditor - by virtue of the $23 billion bailouts of CLF and its subsidiaries in 2009 - the Government has the majority of the directors on the board. (See Page 11A)