MR. MICHAEL TONEY
7 MARCH 2024
This statement is in response to several queries that we have been receiving concerning payments to policyholders.
It is also intended to serve as an update as to where we are in the liquidation assignment
The process for liquidation of a company is set out in the laws of the Commonwealth of Dominica and that is what I’m following.
If I don’t follow that process, I am personally liable.
A liquidator has to basically do 3 things
- Take control and sell off all of the assets
- determine how much is owed by the company- the liabilities
- Use the monies collected to pay off the liabilities in the manner set out in the law. There is a set preference of payment.
First of all, the liabilities must be classified as either secured or unsecured.
Secured liabilities are so termed because these creditors have a legal charge on certain assets that can be identified. They must be paid so that the charge can be removed.
This is similar to you borrowing money to purchase a house. The bank lends you the money and takes a mortgage on the property.
If you want to sell the house, you have to pay off the bank first so that it will release the mortgage. Whatever if left over after you pay off the bank is yours.
In the case of FDIC whatever is left over after the secured creditors are satisfied will then be shared equally amongst the unsecured creditors.
The FDIC policy holders fall into the unsecured category.
I was appointed as liquidator of the Company in 2021. This was during the COVID lockdown.
To avoid travel I appointed Moreau & Co as my agent in Dominica. My attorney is Mr. Gerald Burton, a highly recognized attorney in Dominica.
The first thing I did was quantify the amount owed to the unsecured creditors. That amount is approximately $23 million.
The significant assets that I have discovered are 3 properties that are all pledged as collateral for credit facilities granted to the Company. The properties are the FDIC building at King George V Street, a property at Fond Cole that, up to the end of 2022 housed Tonge Refrigeration and Maycourt building on Cork Street. The institutions that granted the Company credit facilities have held and in 2 instances are still holding these properties as security for the loans. These institutions are in fact the secured creditors.
I must pay them off first before I can deal with the unsecured creditors.
As I said earlier the total amount estimated as owing to the unsecured creditors is in the region of $23 million.
The majority of this total pertains to the policyholders.
My immediate task is selling these assets to pay off the secured creditors so that I can determine what is left to pay to the unsecured creditors.
It has been difficult selling these assets, especially given the slowdown in the economy due to the COVID crisis.
I wish to take the opportunity here to publicly thank NCCU for taking up our offer to purchase the property at King George V Street.
The proceeds from the sale of the property have been paid to a secured creditor to pay off some of the loans.
The sale of the property at Fond Cole is before the Court and I expect to receive a decision soon.
The disposition of the Maycourt building remains undetermined at this time, but what can surely be said is that the value of the building is significantly less than the monies owed.
I cannot pay any unsecured creditor until I have converted all of the assets into cash and settled with the secured creditors.
In a liquidation each unsecured will receive an equal proportion of what he or she is owed.
I expose myself to showing a preference to one creditor against the others if I pay anyone before I can make that determination.
So my current position is the following-
1. I have determined the total unsecured creditors to be approximately $23 million
- I have sold 1 – King George V. The Fond Cole property sale is before the Court. The negotiations as to the Maycourt Building is still at an early stage of negotiation.
- I cannot, in law, treat with any unsecured creditor until the secured creditors are satisfied.
I trust that what has been said above has brought some clarity to the situation.
