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Allen’S $100k Demand Rejected By Loi Group

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The group at the centre of the Renward Wells Letter of Intent (LOI) controversy rejected an ex-Cabinet Minister’s alleged $100,000 demand for sending a solitary letter to the Government over its waste-to-energy proposal.

Stellar Energy, in legal documents detailing its claim for $727.364 million in damages, claimed that Algernon Allen and his law firm sent them a $100,000 invoice after sending Mr Wells a letter that obtained “an encouraging reply”.

The company’s statement of claim, filed with the Supreme Court just before Hurricane Matthew struck, alleges that it “entered into a legal representation agreement” with Mr Allen, and Allen, Allen & Company, in October 2013.

A $15,000 retainer was paid to the Urban Renewal co-chair and his firm in return for providing legal services to assist Stellar with obtaining government approval for its proposed $650 million waste-to-energy plant at the New Providence landfill.

“At the time, the fourth defendant [Mr Allen] assured the plaintiffs [Stellar] that they would have no problem in acquiring the contract,” the statement of claim alleges.

“Subsequent to the first payment, on December 6, 2013, [Mr Allen] wrote a letter to [Mr Wells], the government official responsible for the National Energy Task Force.

“This letter obtained immediately an encouraging reply on December 12, 2013, to the effect that the plaintiffs’ proposal was under consideration by the Bahamas Government.”

It was then, Stellar alleges, that Mr Allen and his law firm sent them a $100,000 invoice, a demand it baulked at paying.

“Together with the letter in response, the fourth defendant presented the plaintiffs with an invoice of $100,000, which the plaintiffs refused to pay,” Stellar claimed.

“Following meetings and discussions with the fourth and fifth defendants [Algernon Allen and Frank Forbes], the fourth defendant agreed to waive the invoice and proceed in any event.”

Stellar’s statement of claim sheds light - at least from one side’s perspective - on the murky developments that led up to the controversy which forced Mr Wells’ to step down as parliamentary secretary in the Ministry of Works.

The group, headed by Dr Fabrizio Zanaboni and Jean-Paul ( JP) Michielsen, is demanding that the Supreme Court award damages in its favour and against Mr Wells, the Government, Mr Allen and his firm, and Mr Forbes and his company, Sigma Holdings/Management.

They are also seeking declarations that the Government both “honour” the LOI contract and not award a waste-to-energy contract to any other company until damages are paid.

Tribune Business can reveal that Stellar and its attorneys, Ian Cargill & Company, on Friday filed for a $727.364 million default judgment against the Government, and Messrs Allen and Forbes, on the grounds that all have failed to file a defence or give notice of their intention to do so.

Accompanying court documents, seen by this newspaper, allege that Ian Cargill & Company could find no trace of any such filings despite conducting a thorough search of the Supreme Court

Tribune Business understands that Mr Wells has not been included in the ‘default judgment’ filing after his legal representatives request a further 21 days to respond.

Meanwhile, Stellar’s statement of claim alleged that it was “peculiar” that Mr Forbes, who Mr Allen encouraged them to bring on board as ‘honorary chairman’, never gave them the LOI version that was intended for Deputy Prime Minister Philip Davis to sign.

This was despite Mr Forbes allegedly providing them with a copy of the letter sent to the Inter-American Development Bank (IDB) by Michael Halkitis, minister of state for finance, seeking the bank’s support for a $40 million guarantee that would underwrite Stellar’s engineering studies at the New Providence landfill.

As revealed previously by Tribune Business, Mr Halkitis’s letter showed the Government was aware, at Cabinet level, of the LOI’s existence some six weeks before Mr Wells was fatefully prevailed upon to sign the final version.

The letter referred to Stellar having been issued with an LOI, but the waste-to-energy group said it never saw a copy of this version or the other attachment noted by Mr Halkitis.

Stellar then claimed it was told by Mr Forbes that it needed to sign a “partnership contract”, or otherwise the waste-to-energy proposal would never be approved by the Government.

“On or around the beginning of June 2014, the fifth defendant informed the plaintiffs that in order to progress the project approval he needed, on behalf of his principals, some additional contractual documentation on a partnership basis, which the plaintiffs reserved the right to consider,” Stellar alleged.

“It was made quite clear to the plaintiffs that, in the absence of such documentation, the project would not proceed to the approval stage.”

Mr Forbes’s “principals” are not identified, and neither is the nature of the “partnership”, although it appears to be a reference to a joint venture agreement with him that is mentioned later in the court filings.

Stellar later alleges that the LOI was leaked as part of “a conspiracy” against it, with “clear intent at the Government level to sabotage the project”.

It also claimed that Mr Forbes “and his political partners” were reneging on their agreements with Stellar, including the LOI and other arrangements allegedly “forced upon” the group, “for the benefit of third parties close to the Government, and in particular to the Deputy Prime Minister and other local business group(s) close to him”.

Amid the fog and seeming confusion surrounding Stellar’s project, the group was then informed on June 20, 2014, by Astrid Wynter, the IDB’s then-Bahamas country manager, that the multilateral lending institution “had no intention” of providing the necessary financial support.

Stellar alleged it had been further “perplexed” several days before when Ms Wynter purportedly caused one of Mr Halkitis’s officials to contact the group, seeking copies of the attachments to the minister’s letter.

Stellar said it provided the drafts and, “immediately thereafter... Ms Wynter sent an e-mail on July 10, 2014, disclaiming any part in the proceedings or any consent in the financial support”.

The LOI was then ‘leaked’ to the media the following day, consuming Stellar and its project in a firestorm of controversy due to Mr Wells allegedly signing the document without authorisation.

Stellar claimed that once the LOI was made public, it was suddenly contacted by two persons - including an ex-Cabinet minister in the first Christie administration - seeing copies of the document.

“The plaintiffs further found disturbing that immediately after the leak occurred, both Giles Deal (assistant to the minister of housing and the environment, Kenred Dorsett), and Vincent Peet, also advisor on the matter, called the plaintiffs within 10 minutes from each other to ask for a copy of the signed LOI,” Stellar alleged.

The group’s legal filings also disclose that after the LOI controversy broke, Mr Forbes arranged for radio personality, Steve McKinney, to run a PR campaign to defend Stellar’s reputation. Mr Forbes and Sigma are understood to own Mr McKinney’s radio station, Radio Peace 107.5.

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