The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian attorney allegedly demanded that the late Sir Jack Hayward’s children and grandchildren receive nothing from the family trust, a move that would have violated a proposed legal settlement.

Richard DeVries and Ian Barry, who were later dismissed as trustees for the Sir Jack Hayward Discretionary Settlement 1993, separately described themselves as “very concerned” at the February 2015 advice they received from Andre Feldman, the trust’s (and their) attorney.

Both men, in separate affidavits filed with the Supreme Court last week, alleged that Mr Feldman’s promptings after the ex-Grand Bahama Port Authority (GBPA) co-chair’s death were contrary to his previous advice not to do anything without court approval.

Mr DeVries, whose account is fully backed by Mr Barry’s affidavit, claimed that Mr Feldman said he was merely executing a promise he made to Sir Jack before the latter’s passing.

According to Mr DeVries’ account of their February 17, 2015, meeting, Mr Feldman said Sir Jack had demanded he ensure all trust assets - the most significant of which was the 50 per cent equity stake in the Grand Bahama Port Authority (GBPA) and its Port Group Ltd affiliate - be distributed to Patty Bloom, his companion.

Mr DeVries, a Canadian barrister, alleged that this ‘demand’ would breach a ‘compromise agreement’ between Sir Jack and the Bloom family on one side, and the Hayward children and grandchildren, to settle previous litigation over the trust.

However, Mr DeVries claimed that Mr Feldman then suggested he and Mr Barry distribute 60 per cent of the assets to Ms Bloom without telling Sir Jack’s children. And he allegedly urged that they keep distributing 60 per cent “and so on” until the trust assets were exhausted.

Messrs DeVries and Barry alleged that following this advice would have been “clear breach of our fiduciary duty”, and they refused to follow Mr Feldman’s pleadings.

Their tale, though, provides further insight into why the duo may have been removed as trustees for the Hayward family trust.

Tribune Business previously revealed how Hannes Babak, the ex-GBPA chairman, and Mr Feldman persuaded the elderly protector for the Hayward trust, Keith Griffiths, to remove Mr DeVries and Mr Barry as trustees in May 2015.

This left Prometheus Services Ltd, a company that Messrs Babak and Feldman subsequently admitted to owning, as the sole trustee looking after the Hayward trust and its main asset - the 50 per cent equity stake in the GBPA and its Port Group Ltd affiliate.

Removing Messrs Barry and DeVries, apart from enabling Mr Babak and Mr Feldman to take control of negotiations for the GBPA’s potential sale to $4.5 trillion asset manager, BlackRock, would also have allowed them to enact the trust distribution plan via Prometheus.

This would further have cemented their grip over the Hayward estate, and its half-share of the GBPA and Port Group Ltd, since the trust assets would have been placed in the hands of Ms Bloom - who was firmly aligned with them at the time.

As a result, the GBPA’s fate - and that of Freeport, its 60,000 residents and the city’s future development - rested very much in the duo’s hands until the Hayward children and grandchildren successfully persuaded the Supreme Court to replace them with Judicial Trustees.

Ms Bloom has since issued a joint statement with the Hayward and St George families to effectively reject Prometheus, and Mr Babak and Feldman, from having any further influence over the trust and Freeport.

Detailing the trust distribution plan, Mr DeVries alleged: “By early March 2015, Mr Barry and I were becoming increasingly concerned Mr Feldman’s advice to us was being influenced by information he shared with us at our first trustees meeting after Sir Jack’s death.”

Suggesting that this took place at the offices of Mr Feldman’s law firm, Argus Advisors, on February 17 last year, Mr DeVries claimed: “He told us that in the last month before his death, Sir Jack had demanded, and Mr Feldman had given his absolute promise, that he would ensure Ms Bloom received all the assets of the trust, and the plaintiffs would receive nothing.”

The ‘plaintiffs’ are Rick Hayward and Susan Heath, Sir Jack’s children, and the latter’s six grandchildren. Mr DeVries alleged that the ‘promise’ was “clearly in breach” of the agreement to settle earlier litigation between Sir Jack and his offspring, which had yet to be approved by the Bahamian Supreme Court.

The settlement “required Sir Jack to confirm he would not substantially change” his ‘letter of wishes’ from January 2012, and Mr DeVries claimed that Mr Feldman had no authority to make the ‘promise’ or seek to bind the trust and trustees by it.

“Nonetheless, he insisted he was morally and legally bound to ensure that the promise was fulfilled, and that we (Mr Barry and I) were to exercise our discretion as trustees to ensure the promise was fulfilled,” Mr DeVries alleged of Mr Feldman.

The Bahamian attorney also confirmed that a key aspect of the settlement between Sir Jack and his offspring was that “no more than 60 per cent of the trust fund” could be distributed without giving notice to Rick Hayward and Susan Heath.

“Mr Feldman stated that his opinion was, as the trustees of the trust, Mr Barry and I could arrange to distribute up to 60 per cent of the trust’s assets to Ms Bloom without giving notice to Rick Hayward and Susan Heath,” Mr DeVries alleged.

“Thereafter, we could distribute up to a further 60 per cent of the remaining trust assets to Ms Bloom and so on, until the assets were fully distributed to Ms Bloom.”

While continuing to insist this was Sir Jack’s goal, Mr Feldman allegedly conceded that “it might be better to try to settle the matter by having the parties agree that Ms Bloom would receive 60 per cent of the trust assets, and the other beneficiaries the remainder”.

This, Mr DeVries pointed out, would have violated the ‘promise’ to Sir Jack. He discussed the matter with Mr Barry, the GBPA’s ex-chief financial officer, and both agreed that distributing all the trust assets to Ms Bloom “would not be an appropriate, nor proper exercise, of our fiduciary powers and duties as trustees”.

“We both felt doing so would be a clear breach of our fiduciary duty,” Mr DeVries alleged. “We also found this advice strange, given Mr Feldman’s previous legal advice that we should do nothing of significance as trustees without prior court approval.”

He and Mr Barry were saved from having to take further action because the trust, at that point, had no assets to distribute. It would, though, had a GBPA/Port Group Ltd sale to BlackRock been closed.

The two trustees discussed whether to terminate Mr Feldman’s services, due to his “conflict” as attorney for the trust with his role as executor and attorney for Sir Jack’s estate. They decided against this because there was no money available for the trust to hire another attorney.