Key City Markets pension asset faces decade tie-up


Tribune Business Editor


A trustee for City Markets employee pension fund yesterday warned that the dispute over its main asset “must be resolved out-of-court” otherwise it will be tied up in litigation for another decade or more.

Dennis Williams, the former Bahamas Electrical Workers Union (BVEWU) chief, who is now an attorney, said the trustees’ position over the sale of the former City Markets headquarters building and warehouse on East-West Highway had not shifted for eight years.

Responding to Tribune Business questions, he wrote in a brief e-mail: “As you know I am counsel and the matters are before the court. I will only state the following: Litigation in the press, half truths, spin doctoring and intellectual dishonesty by any party has not yielded any resolve to the matters at hand.

“The position of the current trustees has not changed since 2014 (almost ten years now). The matter must be resolved out-of-court, otherwise it will linger in court for possibly ten years or more, possibly going all the way to the Privy Council. That is not good for the workers, and they should ask who has and will never want the matter to be resolved . We trust that all parties will resolve this matter in the best interest of all reasonable parties involved.?

Mr Williams declined to comment further. He spoke out after Gavin Watchorn, AML Foods president and chief executive, told Tribune Business it had been left with little choice but to “move on” from its six-year attempt to acquire the East-West Highway property after the out-of-court settlement it proposed did not receive unanimous acceptance.

AML Foods, which has long been seeking a new home for its Cost Right brand, has instead reached a deal to acquire the portion of the building that houses its present Solomon’s SuperCentre. It plans to invest a total $17m in converting that 80,000 square feet into a retail destination housing both Solomon’s neighborhood grocery concept and Cost Right’s wholesale club format, with the latter relocated from the Town Centre Mall before end-2023.

Acknowledging that hundreds of ex-City Markets staff were depending on the former head office’s sale proposed $3.36m sale to AML Foods, and subsequent proceeds, for their retirement benefits, Mr Watchorn told this newspaper it was “unfortunate” that AML Foods’ suggested resolution was not accepted and that the retail group has “exhausted” all possible remedies.

He added that it will now be up to the Supreme Court, and judicial system, to resolve the fate of the 6.52-acre property that also includes a warehouse facility and is part of the Soldier Road Industrial Park. The legal process will likely take several further years, and the AML Foods chief said the property “continues to deteriorate” in the absence of a settlement - a development that will further cut the monies obtained by retirees from any eventual sale.

“We believe we had purchased the former City Markets building with the intention to relocate Cost Right there,” Mr Watchorn told Tribune Business. “It’s been subject to various litigation. At AML, we had worked quite hard towards the end of 2021 into early 2022 with the various parties to reach some kind of settlement, some kind of agreement.”

While not providing any details, he explained that the proposal was designed to satisfy the interests of all sides involved in the dispute while also enabling AML Foods’ purchase to proceed. Besides the Solomon’s and Cost Right owner, Mr Watchorn said three other parties were involved, making a total of four.

While AML Foods was able to secure a written agreement to its proposal from one other side, and a verbal approval from another, it was unable to gain acceptance from the third and final party. “At this point we’re going to leave it to the court to work it out,” Mr Watchorn said. “There are a number of matters before the court, which I cannot comment on.

“Strategically, we cannot wait. We have a business to run, and have to make the best decision for the business. For Cost Right, there’s no secret that we’ve been looking for a new home for some time, and this transaction [involving the Solomon’s SuperCentre building] came up.” Rather than the former City Markets headquarters, Cost Right will instead be relocating several hundred yards up the road on the East-West Highway.

Mr Watchorn declined to detail AML Foods’ settlement offer. And he did not name the other three parties, or identify the two that had consented to AML Foods’ proposal or the one that rejected it. 

The ex-City Markets headquarters and warehouse was the main asset owned by the failed supermarket chain’s employee pension plan, which was formally called the Bahamas Supermarkets Ltd Profit Sharing Retirement Plan. Branding the situation “unfortunate”, Mr Watchorn told Tribune Business: “We’ve given a real go at trying to get a deal done and settlement down there.

“We appreciate there are some pensioners still waiting to get their retirement benefits out of that transaction, but unfortunately we were unsuccessful in getting all parties to agree to what we had offered. From a business perspective, we have to move on and let it run through the legal procedures and see what comes out of that. I am confident AML has done what it can to get a settlement, but at this point we’re just resolved to let the matter be addressed through the court.

“We believe we’ve exhausted.... we put a lot of work into trying to get an agreement everybody could be happy with and, unfortunately, we were not successful in getting that done. We wanted to do right by everybody, but ultimately had to move on. It’s unfortunate that the facility continues to deteriorate, and it’s unfortunate the pensioners are still waiting on funds. They have to continue to wait to get a retirement from that.”

The impasse largely stems from relations between the other three parties, rather than AML Foods, whose purchase has effectively been caught in the middle of their dispute. AML Foods’ latest annual report, for the 2022 financial year, said: “On September 21, 2016, the company signed an agreement to purchase a building located at Soldier Road industrial site for $3.359m.

“Subsequent to the payment of the final purchase price in July 2017, a dispute arose as to the ability of the vendors [the pension fund trustees] to provide good title to the property. This dispute is currently before the Supreme Court. Included in other assets is $3.138m which excludes VAT.”


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