The Tribune

By NEIL HARTNELL

Tribune Business Editor

CREDITORS of an insolvent Bahamas-based bank and trust company are likely to recover just over 5 per cent of what is owed to them, its liquidator confirming to Tribune Business that a collective $14 million payment is currently being made to them.

Describing the liquidation of Leadenhall Bank & Trust as "a battle", Craig A. 'Tony' Gomez, the Baker Tilly Gomez accountant and partner, told Tribune Business that he expected around $20 million in total to be paid out to its creditors, with the Supreme Court-supervised winding-up completed by 2012 year-end.

"We're getting the payments out [to creditors] right now," Mr Gomez told Tribune Business. "It's about $14 million, and whatever else is in the balance at the end we will look to distribute, once all issues are settled. All surpluses are for the benefit of creditors."

Based on the $14 million figure, and the last published liquidator's report on Leadenhall, the initial dividend payment to creditors represents 3.9 per cent of what they are owed. Effectively, this means they are recovering just $0.04 out of every $1 they are owed.

The recovery threshold would have been much higher if former customers of a US-based 'ponzi' fraud, Cash 4 Titles, had not succeeded in their Supreme Court action to be admitted to the list of Leadenhall's creditors.

The now-defunct Bahamian bank and trust company had allegedly provided financial services to the Cash 4 Titles scheme, purportedly through its credit card business operated by Axxess International, and was sued by the fraud's former clients in the US courts.

The Cash 4 Titles clients obtained a $330 million judgment against Leadenhall in the south Florida district court in the US, and were successful in having the award recognised by the Bahamas Supreme Court, forcing Mr Gomez to admit them into the creditors queue.

As a result, the Cash 4 Titles clients, with their $330 million, account for 92.4 per cent or the lion's share of the almost-$357 million claims against Leadenhall. As a result, the bulk of the initial $14 million dividend will be going to them.

But, had their claim not been successful, Leadenhall's other creditors would have recovered a high percentage of their funds.

Mr Gomez said he was still pursuing several smaller debtors owing money to Leadenhall, largely in the form of loan repayments, in a bid to bring the liquidation to a close.

"Other than that, we should be settled in a couple of months - towards the end of the year," he told Tribune Business in terms of the liquidation's completion.

"It's been a battle, but that's where we are. I would like to believe, barring no unforeseen circumstances, that the liquidation will be finished and closed over the next few months."

Mr Gomez estimated that the Leadenhall liquidation would probably return about $20 million in total to creditors, a sum representing 5.6 per cent or 5.6 cents out of every dollar owed to them.

"It's about $20 million in total," he confirmed. "I think it's going to be about five cents. It's not going to be much higher than that. The bulk has gone in that first initial dividend distribution."

Leadenhall's last balance sheet, as at March 31, 2011, showed a cash position of $20.122 million. Total assets, to meet claims worth $357 million, were $24.341 million, with the balance largely consisting of $3.459 million in loans receivables.