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Pensioners left with 30% in City Markets HQ sale

* Claim trustees ‘not acting in our best interest’ * Trustees retain 27% of $3m sale to AML Foods * And lawyer paid almost one-third of proceeds

City Markets pensioners have been “kept in the dark” over the $3 million sale of the plan’s main asset, with just 30 per cent of the proceeds seemingly left for their benefit.

Court documents obtained by Tribune Business reveal that the long-running saga over the defunct supermarket chain’s employee pension plan is again heating up, this time over the sale of its former East-West Highway head office to BISX-listed AML Foods.

Whanslaw Turnquest, the defunct supermarket chain’s former chief inventory control officer, who heads a ‘committee’ representing many City Markets former employees, is alleging that the pension plan’s trustees “did not act in the best interest of beneficiaries” over the deal.

The former City Markets’ head office, which is currently in a state of ruin and disrepair, was the employee pension fund’s main asset, and its sale was critical to maximising recovery for the hundreds of beneficiaries who have been waiting some six years to recover their long-term investments and life savings.

Mr Turnquest, in a series of affidavits filed with the Supreme Court on February 2 and February 28, 2018, alleged that his group of beneficiaries and their legal advisers only become aware of the potential sale when one of the pension trustees, Dennis Williams, was cross-examined “under oath” in June 2017. This was nine months after Mr Williams and his fellow City Markets pension trustee, Rosalie McKenzie, signed the initial sales agreement with AML Foods on September 21, 2016, which resulted in the latter paying the due a $150,000 deposit.

With no further information forthcoming, Mr Turnquest alleged he was then “shocked to learn” in January 2018 that the sale had been completed. And further disclosures show that City Markets pension beneficiaries may receive as little as $732,064, or just 30 per cent, of the $2.438 million net purchase price for the supermarket chain’s former head office.

A February 12, 2018, affidavit by Ms McKenzie, which was neither filed nor served on the pension beneficiaries, reveals that $1.706 million was disbursed to seven parties from the purchase price paid by AML Foods.

It shows that the two trustees approved payment of some $665,585 to themselves, with Mr Williams receiving $461,253 and a $204,331 balance going to Ms McKenzie. The collective sum represents 27.3 per cent, or more than one-quarter, of the head office sales proceeds.

Billings attached to Ms McKenzie’s affidavit show that the sums disbursed to the two trustees include payments - including fees and ‘bonuses’ - for two future years, namely 2018 and 2019. And the trustees’ compensation for 2017 appears to have been based on a 62-week year.

A further $795,038, or 32.6 per cent of the AML Foods sales proceeds, were paid to the trustees’ attorney, Roger Minnis of Minnis & Company. Attached billings showed the sum represented three years’ worth of legal work, not just the sale, from 2015-2017, with Mr Minnis applying a 48 per cent discount to his fees.

Basing his calculation on the $3 million ‘gross’ price, Mr Turnquest alleged that the trustees and their attorney had paid themselves “about 60 per cent” of the sales proceeds “without reporting such sale and payments” to the pensioners, their attorneys or the Supreme Court until now.

“They did not even have the courtesy to call a meeting with the beneficiaries and their attorney to inform them of the sale, and the fact they paid themselves and their attorney and others some $1.6 million,” he claimed.

Calling for Supreme Court “intervention” over the payments, Mr Turnquest alleged: “The trustees have not acted in the best interest of the beneficiaries of the retirement plan.”

He further claimed they had breached Supreme Court Orders, one signed by Mr Minnis as their attorney, which called for monies generated by the former head office’s sale to be paid to pension beneficiaries. The other Order called for an accounting of sums owed to the pension fund.

Other payments from the AML Foods sale were shown as including $193,500 to Colonial Realty as its 6 per cent broker’s commission on the sale. There is nothing to suggest the realtor has done anything wrong in relation to the sale.

Mr Williams, in an e-mailed reply to Tribune Business last night, did not directly answer any of this newspaper’s questions on the payments and sale to AML Foods, instead saying he would ‘stay above the fray’. 

Emphasising that he would not “wallow in the mud”, Mr Williams said he and Ms McKenzie would “press on” with their duties and had the necessary documents to support their actions in law.

He suggested concerns over the AML Foods sale were being used as a distraction, and told Tribune Business: “With the greatest of respect, as a trustee and attorney, I will not get into ‘wallowing in the mud’. My experience leads me to know that a picture is being painted to draw attention away from the $12 to $15 million claim.”

Mr Williams did not explain what he meant by that, although the figures are understood to refer to the estimated total worth of City Markets pension plan assets - a value that has long been uncertain and disputed.

“We have a strict duty to the beneficiaries in accordance with the Trustee Act and the deed of Trust,” he added. “We act on advice and have deeds to legally back up whatever we did, and we will continue to press on with our duties.”

Mr Turnquest, though, expressed “concern” over the fact that Ms McKenzie’s affidavit, made in response to an Order from the Supreme Court’s deputy registrar, was neither filed nor served.

She disclosed that the initial sales agreement with AML Foods was signed on September 21, 2016, for a price of $3 million “net”. However, that appears to have been a mistake, and the $3 million a ‘gross’ price, given that the affidavit subsequently revealed that just $2.438 million was paid to the trustees by AML Foods.

“Upon execution of the said agreement for sale, the sum of $150,000, which represented 5 per cent of the purchase price, was deposited with our attorney,” Ms McKenzie alleged.

“The matter was finally completed on the ninth day of August, 2017, when a cheque in the amount of $2.288 million was paid by C. F. Butler & Associates, which represented the balance of the purchase price on the amended vendor’s closing statement.”

There are discrepancies, though, between Ms McKenzie’s affidavit and AML Foods’ latest accounts. The BISX-listed food retail and franchise group, which operates the Solomon’s SuperCentre, Solomon’s Fresh Market, Cost Right and Domino’s Pizza brands, said the sale was “not yet finalised” as of August 31, 2017 - some 22 days after the trustee says it closed.

“On September 21, 2016, the company signed an agreement to purchase a building located at Soldier Road Industrial Site for $3 million,” AML Foods’ financial statements stated.

“At that time, the company paid a deposit of $150,000, which was included in property, plant and equipment at April 30, 2017. Subsequently, on July 28, 2017, the company placed into escrow $3 million, including taxes and fees, to complete the purchase. However, as of August 31, 2017, the sale was not yet finalised.”

Mr Turnquest, in his February 2 affidavit, alleged that he was “shocked to learn that the sale had been completed” some five months’ later, “with $3 million going to the trustees who did not inform the beneficiaries, their attorney or the court since the completion of the sale on July 28, 2017”.

Branding the alleged non-disclosure as “deceptive”, he claimed: “It was not until one of the trustees, Dennis Williams, was cross-examined under oath in June 2017 that the plaintiffs’ counsel, beneficiaries or myself knew of the potential sale. The trustees failed to say who was purchasing the property or to give details on the potential sale.”

Mr Turnquest said the inability to access their life’s savings had produced devastating consequences for many City Markets pensioners, who were unable to afford medical care, pay mortgages, rent and other daily bills, and fund their children’s education.

“The strife among the beneficiaries is real,” he added. 

Comments

bogart 4 years, 9 months ago

The workers need to go to the Board of Directors who agreed to invest their pension money into equipment for the new supermarket. Who authorized it should be responsible. Did the workers authorize it or did management without their permission??

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TalRussell 4 years, 9 months ago

Ma Comrades, just weeks ago after i heard about the sale I blogged asking questions about not only the unpaid City Market pensions but who is protecting thousands others who over the years have been paying into work pension funds through automatic payroll deductions from suffering a similar loss pension monies nightmare....in the meantime, what exactly will a judge define as a "62-week" year? {You couldn't make this up}. Comrades, somebody needs safeguard workers pension contributions when the companies themselves should not be trusted such responsibility to protect workers. Walkout food store without paying the cashier loaf bread and tin sardines and you risk spending few years in an overcrowded Fox Hill prison's jail cell.

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licks2 4 years, 9 months ago

The major players are the Finleysons and PGC. . . et al! The Finleysons could have done as they damn well pleased with whatever they damn well pleased. . .. . . and they did. . .PGC and his family, friends and lovers them pillaged the thing. . .with Shane Gibson running interference for them. . .they robbed those workers out of their hard earned pension money. . .then the Finleysons sold the thing from under the folks and ran off with all of the money!!

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realitycheck242 4 years, 9 months ago

Only in the Bahamas... Is this the norm.... Two of the trustees, Lawyers and the real estate company getting all theirs and the Beneficieries get screw with the crumbs of whats left.

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TalRussell 4 years, 9 months ago

Ma Comrade,you think they paid VAT? If this was all supervised by a court - may God help all with disputes over pension funds? When it be my time get all reincarnated - I wants come back as a accountant trustee.

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realitycheck242 4 years, 9 months ago

Vat....thats a joke....they dont know what that is haha

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TalRussell 4 years, 9 months ago

Ma Comrade, neither does KP, knows what VAT is - nor where it goes after red public purse gets their hands on it. {Anything has 62 week year - requires somebody looks into it}. God god, even a leap year has only 366 days and that only comes every 4 years.

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Dawes 4 years, 9 months ago

It's OK the owners of the company were Bahamian so people are not up in arms about what they did to the workers. And as they are politically connected Bahamians nothing will happen to them, no matter which governing party is in power. As always the little man gets the short end of the stick and nothing is changed.

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licks2 4 years, 9 months ago

Remember Bamsi fire. . .the new airport road "dig up" . . .a frustrated man/woman with no resort for justice then to "get things done". . .stay tuned!

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ohdrap4 4 years, 9 months ago

the pension fund was never for the workers. it was for the corporate raiders. they are well off in retirement.

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BMW 4 years, 9 months ago

Dare I ask, what would be done or said if they were foriegners? Shit would hit the fan I think.

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B_I_D___ 4 years, 9 months ago

Anyone who would do business with the Finlayson's is either a damn fool or a crook.

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