By NEIL HARTNELL
Tribune Business Editor
The joint liquidators for Owen Bethel’s insolvent Montaque Capital Partners currently possess just $196,238 in liquid assets to cover total creditor claims of $17.5 million, it has been revealed.
The third report to the Supreme Court by accountants Ed Rahming and Kenneth Krys, of the KRyS Global accounting firm, discloses that $1.542 million in assets belonging to the Bahamian broker/dealer’s customers are either “illiquid” or cannot be accessed.
Messrs Rahming and Krys said that more than half the $1.738 million they have identified as held in trust for Montaque’s clients, a net positive cash/securities balance of $932,380, is tied up in a legal dispute with the Canadian broker holding them, Macquarie Private Wealth.
Of the remaining $805,760, some $609,522 consists of securities certificates recovered from Montaque’s Nassau office vault when it was placed into liquidation. The liquidators described these as
“illiquid”, meaning they will have difficulty in selling them and realising their full market value.
With Montaque Capital Partners’ clients and creditors seemingly facing a bleak picture in terms of recovering what is owed to them, Messrs Rahming and Krys, according to the report, are searching for other sources of recovery.
Among those potentially identified are a property deed, held on behalf of a customer with a negative cash balance, for real estate with a sales value of $150,000.
“The liquidators will make efforts to recover on this asset for the benefit of customers,” Messrs Krys and Rahming alleged. “The liquidators have identified a total of 17 paintings with an appraised value of approximately $66,000, and will make efforts to recover on these assets for the benefit of customers.”
The keys to maximising creditor recoveries appear to be a successful outcome of the Macquarie litigation in Canada, plus any recouping of the collective $4.888 million owed to Montaque by companies controlled by Mr Bethel, its 95 per cent shareholder and principal, and other related parties.
However, the liquidators are currently relatively powerless to do anything about the Canadian litigation because they have been unable to come to a funding arrangement with Montaque’s creditors. Some Montaque clients, though, are participating in the proceedings.
On the second issue, Tribune Business previously reported how Mr Bethel will be told to return $3.5 million to its liquidators by “formally dissolving” 10 entities he controls.
Messrs Rahming and Krys said in their third report: “We understand that Mr Bethel will lay out these amounts owed in an affidavit to be submitted. We await a copy of the submitted affidavit. Bethel will be asked to formally dissolve these entities and provide proof of such.”
Elsewhere, Messrs Rahming and Krys said that a total $1.8 million in cash raised from selling securities had diminished to just $24,216, due to the ongoing expenses incurred to fund the liquidation.
All securities accessible, worth some $2.1 million, had been transferred to Credit Suisse (Bahamas). Apart from the Macquarie assets, the liquidators said some $157,000 remained to be collected due to the liquidation of the broker holding them, while others want the liquidation to be recognised in their respective jurisdictions.
When it came to the vault assets, Messrs Rahming and Krys said they had undertaken an “asset swap programme” to transform the 635 share certificates recovered into cash.
Some 474 of those certificates were in customers’ names, while 161 were in the name of Montaque or its affiliates.
Messrs Rahming and Krys said the market value of customers’ share certificates was pegged collectively at $569,2778, and to-date some 153,289 shares had been sold back to customers for $7,724.
The share certificates held in the name of Montaque and its affiliates, valued at $747,301, have yet to be sold.
When it came to those affiliates, Messrs Rahming and Krys alleged that Montaque Securities International was “insolvent, and placing it into liquidation is appropriate and necessary”.
They have not done this, though, because Montaque Securities International, which owes Capital Partners some $615,000, has no assets.
When it came to Montaque Corporate Partners, which owes Capital Partners some $1.231 million, the liquidators said they transferred 14 International Business Companies (IBCs) to new registered offices, while 188 out of 206 initially discovered had been struck off or dissolved.