• Ex-Sky chief to seek default ‘discharge’
• Wants ‘better particulars’ from Kaiser
• Blasts move as effort to hurt reputation
By NEIL HARTNELL
Tribune Business Editor
Sky Bahamas’ former principal slammed as “garbage” yesterday’s bid by the airline’s main financier to obtain a default judgment against him over the alleged $28m “bogus loans conspiracy”.
Captain Randy Butler and his attorney, Michael Horton, pledged they would move swiftly to have the default judgment thrown out after Fred Kaiser and his attorney, Michael Scott QC, moved for such an award on the basis that the ex-Sky chief failed to file a defence within the required time.
Court documents seen by Tribune Business reveal that Mr Kaiser and his companies, Alpha Aviation and Advanced Aviation, yesterday filed “a judgment in default of defence” against Captain Butler, Sky Bahamas and Aviation Oversight Group (AOG).
“No defence having been entered by the first through third defendants herein or any of them, it is this day adjudged that these defendants do pay to the plaintiffs damages together with interest and costs thereon to be assessed,” said the filing by Scott & Co Chambers, Mr Scott’s law firm.
No damages sum was specified, and the Supreme Court filing was accompanied by the briefest of affidavits by Sharon Kelly, Mr Scott’s legal assistant, who testified that her search of the Cause List books in the Supreme Court registry turned up no evidence that Captain Butler or the airline had filed a defence to Mr Kaiser’s claims.
Mr Horton, though, said he and his client planned a three-pronged counter to the default judgment filing. He told this newspaper last night that Mr Kaiser’s bid was procedurally flawed because the Supreme Court’s permission first has to be obtained to file a default judgment in an action involving allegations of fraud and conspiracy such as this.
Arguing that Sky Bahamas’ former financier failed to get the court’s go-ahead, Mr Horton said he and Captain Butler would move swiftly to have the default filing thrown out. He added that his client had not been given a proper opportunity to file a defence, as the allegations by Mr Kaiser had not been properly specified, and will also seek to address this through the Supreme Court.
“Captain Butler will be proceeding to ask the court to discharge this judgment,” Mr Horton told this newspaper. “He needs an opportunity to put in a defence, and we’re seeking better particulars of their allegations.
“We’re working for further and better particulars. You make bold allegations and expect someone to just come along and defend them? Give us the particulars to defend. That’s the application that Captain Butler is going to be making; an opportunity to file a defence, and supply the particulars we have asked for.”
Captain Butler, meanwhile, said the default judgment filing was just another effort to damage his reputation and tempt him into speaking publicly about a case that was before the Supreme Court.
“That’s all garbage. That’s just garbage,” he blasted to Tribune Business of Mr Kaiser’s latest move. “We did respond to them; I don’t know what they’re doing. They’re trying to get me to respond to things I don’t know anything about.
“My attorneys did respond already, and they’re planning on doing something about it. If it’s because we didn’t respond, that’s definitely an issue. We did respond. Whatever procedural documentation was supposed to be done, my attorneys did it.
“I’m not paying attention to it,” he added. “Their goal is to try and damage my reputation. That’s all it is. Life goes on. I’m not worried about any of this stuff. All I have seen is trash and garbage. I don’t know why they’re doing this stuff.
“I don’t really understand the things that are being claimed. It’s just crazy. I’ve seen some e-mails [from the other side] saying Randy must die by 1,000 cuts. Why? Because I’m standing up for what’s right. I have a lot to say and a lot to show, but there’s a time and a place for that. I’m depending on the court system to do what it’s called to do. When they do come and go to court, I will take care of it.”
Claims by Mr Kaiser that he was defrauded of $28m via sham loans triggered the resignation of former deputy prime minister and minister of finance, K Peter Turnquest, even though he was not named ad a defendant in the original writ.
Mr Turnquest, who like Captain Butler is vehemently denying the allegations in that document, was described as “a director and manager” of both Mr Kaiser’s plaintiff companies, as well as “owning and/or controlling and/or managing” Sky Bahamas. The former deputy prime minister, however, is not named in yesterday’s default judgment filing.
Mr Kaiser, whose main business interest, Alpha Technologies, agreed in 2004 to pay some $36m to the Internal Revenue Service (IRS) after pleading guilty to tax fraud, is alleging that Captain Butler and Mr Turnquest engineered a decade-long conspiracy that lasted until 2017 “to enrich themselves” by defrauding his companies while concealing their activities.
The statement of claim, which has been seen by Tribune Business, claimed that the duo “dishonestly caused” Alpha Aviation and Advanced Aviation to “pay away” $20.68m and $5.917m, respectively, to Sky Bahamas via “some kind of bogus loans”.
No particulars were given to describe how the scheme worked, although Mr Kaiser’s companies alleged that Mr Turnquest and Captain Butler then used “some 39 fraudulent invoices and/or book entries, and for no adequate consideration”, to drain away some $3.8m paid by Alpha Aviation to Aviation Oversight Group via 39 separate cheque payments between February 2008 and July 2016.
A further $3.026m was also alleged to have been siphoned off by the duo “as at December 31, 2017, to AOG Maintenance Ltd, a company that owned Sky Bahamas’ maintenance hangar at Lynden Pindling International Airport.
“In breach of their duties of honesty and fidelity as directors and/or managers of both the plaintiffs (Alpha Aviation and Advanced Aviation) and of the second and third defendants (Sky Bahamas and Aviation Oversight Group), and their duties to act in the best interests of the companies, Turnquest and Butler failed to keep or to ensure that the companies kept any, or any adequate, financial books of account or financial records recording and/or documenting the companies’ financial transactions, failed to maintain or keep any proper or any proper management accounts or bank or cheque or wire transfer reconciliations and failed to put in place any or any adequate financial controls or systems,” the statement of claim by Mr Kaiser’s company alleged.
Further claiming that “none of the payments were documented properly, or at all”, the statement of claim alleged: “At all material times, Butler knew or must have known that the receipt by Sky Bahamas and Aviation Oversight from Alpha and Advanced were paid away by Turnquest in breach of his fiduciary duties and dishonestly, and were received by Sky Bahamas and Aviation Oversight... on behalf of Alpha and Advanced and held by them on resulting trust for the plaintiff.”
Mr Kaiser and his companies, making it clear that they have come for the monies they believe are due and owing, are seeking a Supreme Court Order that an accounting be done to determine what is outstanding and that this money subsequently be paid to them.