The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

City Markets’ former principal says “no agreement is close” on a potential real estate deal that would have settled the pension obligations owed to one group of former employees.

Mark Finlayson told Tribune Business that while the potenial sale of the Trinity Plaza building on West Bay Street remained on the table, the difficulty lay in working a deal that satisfied the demands of four different parties.

They are the trustees for the Bahamas Supermarket Profit Sharing Retirement Plan; the union said to represent 70 per cent of City Markets’ former workers and pension benefciaries; attorney James Thompson, who represents the remainder; and the Associated Bahamian Distillers and Brewers (ABDAB) Board.

Mr Finlayson said the Bahamas Commercial Stores and Warehouse Workers Union was unlikely to approve the deal, adding that it was still in dispute with Mr Thompson over legal fees he had allegedly charged the ex-workers it was representing.

The union, he implied, had added clout because it now had seats on the Board at ABDAB, the company that owned the 70 per cent majority stake in Trinity Plaza’s holding company, Trinity Ltd.

Under the proposed deal, ABDAB would have sold its 70 per cent equity stake in Trinity Plaza, which is located at the junction of West Bay Street and St Albans Drive, next to the Rubis gas station, to Mr Thompson.

This would have been in exchange for the ABDAB preference shares held by Mr Thompson’s clients. The attorney would then have used 50 per cent of the rental income due to the 70 per cent stake to pay his clients a monthly annuity for the duration of their lives, with the other 50 per cent going to him to cover his costs.

Mr Finlayson told Tribune Business that the trustees for the City Markets pension plan, Christine Turnquest and Constance Rolle, were in agreement with the Trinity Plaza sale provided Mr Thompson adhered to the terms of a September 1 ‘Deed of Settlement and Release’.

He added that the remainder of the ABDAB Board wanted to “settle the matter and move forward”, but he was adamant that the union and its directors had to be on board - and, at the moment, they are not.

Mr Finlayson and Mr Thompson, meanwhile, are both at odds on who first proposed the Trinity Plaza deal as a means of resolving the pension obligation owed to the latter’s clients.

Mr Finlayson told this newspaper that it was Mr Thompson who made the first approach, but the Freeport-based attorney has asserted to The Tribune in a letter that it was Mr Finlayson who came up with the idea.

Meanwhile, Whanslaw Turquest, City Markets’ former chief inventory control officer, who has become something of a spokesman for the former employees, told Tribune Business that none of them knew Mr Thompson was negotiating the Trinity Plaza deal until they read about it in this newspaper earlier this month.

Mr Turnquest said Mr Thompson did not have the authority to negotiate the purchase, but this was again disputed by the latter. The attorney’s letter to The Tribune indicated his clients were aware of the deal, as they had informed banks and other lenders that a solution to the pension/severance woes was soon forthcoming.

“Right now, I don’t think we’re close to an agreement,” Mr Finlayson told Tribune Business on the Trinity Plaza deal. “Nobody wants to move on their positions.

“From the [pension fund] trustees’ standpoint, this was a way of getting it done so no one would have to change their position on certain things. The other Board members [at ABDAB] tend to be: ‘Just settle the matter and move forward’.

“But there has been no sign off from the union. The union has to agree. It’s as simple as that. Under our present agreement, the union has to agree. I hope the parties will be able to find some solution to this.”

Union general secretary, Donna Moss, was appointed to the ABDAB Board as part of the agreement that saw it - and the workers it represents - agree to take preference shares issued by the company and its affiliates as an alternative means to secure the pension obligations due to them.

However, not all ex-City Markets staff and pension beneficiaries are represented by the union. A significant percentage are represented by Mr Thompson, and the presence of two different groups - who are essentially on the same side - has added to the complexity involved in resolving the matter.

As for Trinity Plaza, while the pension fund trustees may wish to sell it to reach a settlement with Mr Thompson and his clients, the property is not theirs to dispose of. For it is ABDAB and its Board of Directors that must ultimately decide to sell it - a Board upon which the union has representation.

Documents obtained by Tribune Business show that the prospects for achieving a deal over Trinity Plaza were bright as recently as last month.

An August 10 letter sent to Mr Thompson by Barry Newman, secretary to Trinity Ltd, requested that the attorney send “confirmation of the agreement” so he could start the process of selling ABDAB’s 70 per cent stake in the company to him.

“I have been notified that Associated Bahamian Distillers and Brewers (ABDAB) has reached an agreement with you and your clients to sell its 70 per cent interest in Trinity Ltd as consideration for the redemption of the preference shares,” Mr Newman wrote.

He added, though, that the preference shares were in the union’s custody. And it therefore fell to ABDAB and Mr Thompson to secure their release.

The pension fund trustees were also in agreement. A September 1 ‘deed of settlement and release’ between Ms Turnquest and Ms Rolle on one side, and Mr Thompson on the other, also agreed to the sale of ABDAB’s 70 per cent Trinity Plaza stake “in consideration for the redemption of the ABDAB preference shares issued” to his clients.

“At that point, we thought we had an agreement with him,” Mr Finlayson said of the August 10 letter to Mr Thompson. “The trustees agreed to go along with it, and the ABDAB Board had to go along with it.

“For the trustees, as long as he [Mr Thompson] agreed to what was in that document, they agreed to move forward. From a trustee standpoint, he needs to agree to everything in that.”

Mr Finlayson, though, said the parties were unable to stick to the terms. “He [Mr Thompson] wanted certain things that we weren’t prepared to do,” he added.

“He approached me on [the deal]. At that point, I was outside altogether. I told him there were other parties that had to agree to it - ABDAB, the trustees and the union, which had representation on the Board. I wanted them involved.”

Mr Thompson, though, in a letter to The Tribune, vehemently denied that he was the one who first proposed the Trinity Plaza deal.

“The proposal was made by Mr Finlayson,” he wrote. “His own proposal could not have been rejected by him. His proposal was, in part, rejected by me.”

Mr Finlayson, meanwhile, told Tribune Business that the union and its ABDAB Board representatives were unlikely to agree to the Trinity deal.

He said it was in dispute with Mr Thompson over previous legal fees he had charged the ex-employees it was representing, adding: “I don’t see any settlement in that regard. I know it’s a big sticking point.

“I don’t think the union will agree on it even if the Board agreed with us. The point is that the union does have a say, and we’re not going to do anything that’s contrary to their members of the Board. We can’t move around them; we have to move with them.

“From our standpoint, it’s one of those things. ABDAB will go along with it as long as the other parties are fine with it.”

Under the terms of a December 17, 2013, court Order, the pension fund trustees paid $134,000 to plan beneficiaries via Mr Thompson, regardless of whether he represented them or not.

That same Court order required City Markets pension plan beneficiaries to be paid their “full entitlement” by June 17, 2014, either by selling the defunct supermarket chain’s former head office and warehouse, or some other asset disposals.

The September 1 settlement deed also reveals a dispute between Mr Thompson and the pension fund trustees over whether the union could accept payments on behalf of his clients.

And the situation surrounding the City Markets pension fund has become even more confused, after Mr Turnquest alleged that no former employee or pension beneficiary was aware of the Trinity Plaza deal until it was revealed by this newspaper.

“We were not aware of the deal,” he told Tribune Business. “The lawyer had no right, no authority to negotiate the trade of any asset or property. He should not have entered into negotiations on that matter.”

Mr Thompson, though, effectively denied this in his letter, saying many of his clients had informed their lenders that “there were proposal from the Finlaysons that would soon relieve their financial problems” - a clear indication they knew a deal was in the works.

Mr Turnquest, though, also expressed surprise that clause 1.3 of the September 1 ‘settlement deed’ negotiated by Mr Thompson appeared to release the Finlaysons and pension trustees from their “liability for severance payments” to his clients.

The former chief inventory control officer is also challenging the union’s ability to act for the pension beneficiaries, arguing that most of the latter are not union members.