Judge bids to protect $2.3m for City Markets pensioners

• But 75% already paid out to ‘third parties’

• ‘Prejudice apparent’ for retirees, AML Foods

• Hundreds waiting over decade for recovery 


Tribune Business Editor


The Supreme Court has upheld an injunction seeking to preserve $2.288m for the benefit of City Markets pensioners even though 75 percent of this sum may already have been paid out to “third parties”.

Justice Diane Stewart, in a March 27 verdict, ruled there were strong reasons to maintain such protection because this is the best source for hundreds of the defunct supermarket chain’s long-suffering pension beneficiaries to recover some of their retirement savings more than a decade after its collapse.

However, her decision revealed that a significant amount - some $1.706m of the $2.288m received by the pension fund - may have already been “dissipated” and paid out to unnamed third parties by the trustees for the Bahamas Supermarkets Employee Retirement Fund, as the City Markets employee pension plan was known.

The $2.288m represents the net sales price paid by BISX-listed AML Foods, the Solomon’s SuperCentre and Cost Right operator, to acquire the pension fund’s most valuable asset - the former City Markets headquarters building on East-West Highway. That transaction, agreed more than six years ago on September 21, 2016, has become embroiled in a furious legal battle stemming from disputes between parties associated with the pension fund.

The latest developments, as outlined by Justice Stewart’s judgment, mean pensioners and former City Markets workers are no nearer to receiving what is due to them following the company’s 2012 failure. And it suggests there may not be much left for them to collect as much of the AML Foods purchase payment already seems to have been disbursed.

The disclosures came as Justice Stewart rejected the bid by Dennis Williams and Rosalie McKenzie, the pension plan’s trustees, to “discharge” or vary the injunction imposed on August 17, 2020, to preserve the purchase price paid by AML Foods for the 6.52 acre site that also included warehouse facilities. The transaction has not closed because of a dispute as to whether the trustees were able to convey good title to the BISX-listed food retail and franchise group.

Mr Williams, a former Bahamas Electrical Workers Union (BEWU) president who is now an attorney, and Ms McKenzie “maintain that there is no evidence of any attempts” by themselves “to dissipate any assets or that they are likely to do so... It would be futile to think that funds received as payment for work done as trustees would still be in their account”.

The injunction’s removal, though, was opposed by representatives for the City Markets pensioners, first Whanslaw Turnquest, and then Glen Adderley. Asserting that the former City Markets headquarters building was held in trust by the trustees for the pensioners’ benefit, they alleged they - and the Supreme Court - only became aware of the sale some six months after the proceeds were received and while legal proceedings were ongoing.

Of the $3m gross sum, some $2.288m was paid to the trustees’ attorney, Roger Minnis of Minnis & Co, together with the $150,000 deposit, on September 21, 2016. The $562,242 balance was retained by AML Foods and its attorneys, C. F. Butler & Associates, to cover outstanding real property taxes and Bahamas Power & Light (BPL) bills owed on the headquarters property.

The pensioners’ representatives, as noted by Justice Stewart, are alleging that Mr Williams and Ms McKenzie “have committed breaches of trust and fiduciary duties” over the building’s sale and that the duo “are dissipating the trust funds and that they wish to continue to spend trust funds” that should be used to pay the City Markets beneficiaries what they are owed.

They were joined in their opposition to the injunction’s discharge by both AML Foods and other parties involved in the City Markets pension fund quagmire. The latter included BSL Retirement Plan Ltd and ABDAB Properties Ltd, with ABDAB standing for Associated Bahamian Distillers and Brewers. Both entities are linked to Mark Finlayson and his family, whose Trans-Island Traders vehicle was City Markets’ last ill-fated majority owner before the firm collapsed.

BSL Retirement Plan, in particular, argued that the injunction should remain because neither Mr Williams nor Ms McKenzie was named as a trustee for the East-West Highway property. Instead, it alleged that they were appointed to hold ABDAB preference shares “in order to conclude an agreement for sale” signed by their predecessors and “to hold a revisionary right in 70 percent of the shares in Trinity Ltd”.

This relates to a series of transactions where the Finlayson family exchanged the City Markets pension plan’s interest in the former company head office - its main asset - for preference shares in ABDAB. The back parking lot and delivery area were also split off from the front buildings and allegedly sold to an ABDAB subsidiary.

In return, the City Markets pension fund was to gain shares worth $600,000 in a company called Trinity Ltd, which acted as a holding vehicle for ABDAB’s equity interest in the Trinity Plaza shopping centre on West Bay Street. AML Foods, meanwhile, wants the Supreme Court to determine if it has valid title to the former City Markets headquarters building via a 2017 conveyance, and if not, to order that its purchase price payment be returned.

Justice Stewart, in her verdict, noted that of the $2.288m received by the City Markets pension plan trustees, some $732,065 had been paid into court upon the order of Supreme Court deputy registrar, Camille Darville-Gomez, on February 5, 2018.

“Allegations have been made that a substantial portion of the purchase money has been distributed by the first defendants [the trustees] to third parties,” the judge noted. “On the facts of this case, there is already evidence that some of the purchase money has been distributed to third parties. This fact strengthens the reason for maintaining the injunction....

“The first defendants have paid out over $1.706m of the purchase monies as averred in the affidavit of Rosalie McKenzie.” Mr Williams had also complained that the injunction had impacted his ability to conduct business as an attorney because his Scotiabank (Bahamas) account had also been frozen.

“He admits that he and his wife are experiencing financial difficulties because of the freezing of their account,” Justice Stewart wrote. “In his second affidavit, he avers that the first defendants would suffer loss which could not be compensated in damages, and he also avers that he would suffer prejudice which would outweigh any prejudice experienced by any other party.

“He avers that the prejudice would be irremediable as it impacts his reputation, loss of income and ease of doing business. He does not provide any evidence of any risk to his reputation, or loss of income or difficulty in conducting his business.” Justice Stewart, though, found that the potential “prejudice” to the City Markets pensioners was “readily apparent” and cuts both ways.

If the sale to AML Foods is found invalid, they will have to reimburse the BISX-listed food group’s purchase price. And, if it is upheld, the “disbursement” and dissipation of the sales proceeds will further reduce recovery of their retirement income and long-term savings. Justice Stewart found: “The fact is that the monies have left the control of the trustees, and should a decision be made that they be returned to [AML Foods] there will be challenges recovering these monies.”

Both Mr Williams and Ms McKenzie has confirmed there were no assets other than the purchase price paid by AML Foods with which to refund the BISX-listed food group if the sale is deemed invalid. “If the injunction is discharged, there is no guarantee that there will be any funds available to repay the plaintiff,” Justice Stewart said. “In fact, the evidence produced questions their [the trustees] means to pay any damages.”

Justice Stewart called on all parties to move the matter to full trial “without further delay” so as to prevent any more financial loss.


DWW 1 year ago

theft by any other name is still a rose or did I get that wrong?


Sickened 1 year ago

I just looked up the words theft and accountability in a Bahamian dictionary. All I saw were smiley faces.


ExposedU2C 1 year ago

It seems the court system has been a willing accomplice in the royal shafting of the poor pensioners by the trustees of the pension fund. Justice delayed can be cruel and most costly, usually culminating in justice denied.


hrysippus 1 year ago

Let's see, Cole Thompson Pharmacies Pension Fund; Toyota Head Office, Japan; City Markets Pension Fund; who else get left out?


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