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TCI Bank creditors group weighing buyout offers PDF  | Print |  E-mail
Thursday, 22 July 2010 10:36

After almost four months of waiting, creditors with funds in the now defunct TCI Bank will soon know the fate of their money.

A final hearing date has been set for Aug. 3, when a judge will decide what will happen to the bank and the millions of dollars of creditors’ money.

Last week provisional liquidators met with Supreme Court Justice Richard Williams and presented their final report, including their recommendations as to what should happen with the bank.

Options on the table are putting the bank into full liquidation — dividing up what money is left among account holders, minus liquidation and legal fees — or accepting one of several offers to buy out the bank and recapitalize it.

The five-year-old TCI Bank had been suffering for nearly two years from mounting unpaid loans, which prompted the independent Financial Services Commission to shut the bank April 9 to protect the remaining assets of shareholders and depositors.

On Wednesday, July 21, the bank’s Creditors Committee met to discuss the three official bailout offers which were submitted by the Provisional liquidators to the judge. Justice Williams has given creditors until July 27 to present him with a report of their recommendations or wishes as to what should happen with the bank.

The Creditors Committee was officially formed several weeks ago, with a board of directors comprised of John Phillips, Albray Butterfield Jr. and Maxferd Gordon “Solie” Williams. The group also left a fourth space on the board for the National Insurance Board, which with $22 million is the single largest creditor of the bank.

The only other large single creditor is a conglomerate of Eastern Caribbean Banks, which represent approximately $15 million in frozen deposits.

The Creditors Committee, which represents approximately $15 million in deposits, has had meetings with the provisional liquidators and have been presented with the three offers currently being considered.

According to John Phillips, two of the offers represent similar “bailout packages.” The first offer from David Kosoy is still in the running, offering a plan to recapitalize the bank and over several years recoup all of depositors funds. The second offer from a group of Eastern Caribbean banks is similar, Phillips says.

A third offer is also being considered by a group venture consisting of a company called Ultima in partnership with local firm Temple, Phillips explained.

All three offers claim they will try to preserve as much as possible for the depositors.

Provisional liquidator Anthony Kikivarakis has said a liquidation will be a long drawn out process taking a minimum of two to three years. Liquidation will also mean depositors will not receive all their money back and what they do get will come in small payments over time.

Liquidation is the last resort for the bank after all offers have been evaluated and considered not acceptable for the bank, Kikivarakis told the creditors at a town hall meeting he held on June 2. If Supreme Court Justice Richard Williams decides liquidation is the best option, Kikivarakis and his partner Mark Munnings would begin the long process of selling off assets to offer repayments to customers.

Kikivarakis said in the case of a liquidation, all depositors would have to file an official claim, which would represent the amount owed to them. Over time as enough funds could be collected, he said a request would be made to the judge to make payouts to the creditors.

This could happen on several occasions over years.

Most of the bank’s assets are tied up in real estate loans.

 

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