For a week, this journal has been reporting that foreigners who worked at Baha Mar are enraged at getting offered maybe 2-4 cents on the dollar—or worse, getting no answers whatever to the claims they duly filed months ago— while Bahamians have been made whole.
Surprise, surprise!
They should have read my column of July 19 last year. I quoted Cabinet Minister Jerome Fitzgerald, the garrulous politician always ready with a pungent quote to boost his ambitions. In speaking of the Compensation Committee chaired by James Smith, he had this to say: “The Committee is taking all claims, Bahamian and non-Bahamian. Some of those will not get much; they’re non-Bahamian.” Exactly. Since Mr. Fitzgerald is the Prime Minister’s favored lap-dog, this statement of policy must come from straight from the top.
The trouble is, while it’s a popular policy, it’s illegal. As I read our own Companies (Winding Up Amendment) Act 2011, it provides that after secured creditors the only priority can be given to claims of Government and employees, all of whom must be treated equally and ratably, without distinction as to nationality.
Of course, Mr. Smith assures us that the whole procedure has been removed from the normal liquidation process, so creditors should be grateful for any crumbs they receive from the Chinese EXIMBANK under its “ex gratia” claims offer—as if the Bank were running a charity bazaar. In reality, the Bank only makes these payments under compulsion of an agreement (never disclosed) with Government, which itself ejected the Bahamian liquidators chosen with much publicity less than two years ago. And in paying and assuming these claims, the Bank will simply turn around and assert them against the mortgage debtor Baha Mar, to be eventually extracted when the new owner pays off the mortgage. Thus Government handles the biggest bankruptcy in our history, outside the law.
Foreign creditors may soon be lining up smart lawyers who will punch a hole in this leaky can of worms. In cancelling a court-approved liquidation, they can argue that Government acted ultra vires our Constitution, justifying financial claims against the State, and possibly against its willing members of the Compensation Committee including Mr. Smith himself. That unfortunate gentleman, once an independent Central Bank president, now seems lost in powerless confusion, saying “I can’t speak for the Government. . . payment is under review by EXIM. . .it’s wait and see. . . we’re not making the rules.”
Government always has full authority to compensate any category of its citizens for losses beyond their control, whether job claims or hurricane damages. But that compensation must be made by special subventions from the Treasury authorized by Parliament, not by taking funds from other innocent parties simply because they are non-Bahamian. Otherwise, our nation will suffer profound reputational image for discriminatory treatment, and begin a campaign to drive away risk-shy foreign investors who can go elsewhere.
Sincerely,
Richard Coulson
Letter to The Editor
March 15, 2017 [published in The Tribune March 16]
Mr. Coulson has had a long career in law, investment banking and private banking in New York, London, and Nassau, and now serves as director of several financial concerns and as a corporate financial consultant. He has recently released his autobiography, A Corkscrew Life: Adventures of a Travelling Financier.
The views expressed are those of the author, and not necessarily those of the WeblogBahamas (which has no corporate view).
