The fallout from a management implosion within the Colina Financial Group a year ago has exploded into an even nastier legal spat with the attorney for former Colina President James Campbell seeking permission to have former Colina Chairman Emanuel Alexiou thrown into prison for his alleged failure to follow a court order.
The parties will be back in the Court of Appeal this morning with Mr. Alexiou, and President of Colina Financial Advisors Anthony Ferguson seeking permission to appeal to the Privy Council a decision handed down by the Court of Appeal last week ordering Colina to pay Mr. Campbell $9 million “forthwith” with interest at 10 percent with effect from August 31, 2005.
Messrs. Alexiou and Campbell along with the Colina Financial Group had asked the Court of Appeal to stay a ruling made by Supreme Court Justice Anita Allen last month that they pay Mr. Campbell the $9 million, buying out his interest in Colina.
Last year, the Supreme Court had sanctioned an agreement between the parties for Colina, and Messrs. Alexiou and Ferguson to purchase Mr. Campbell’s interest in the company at fair market value.
he parties also agreed to appoint an expert to determine what the value of the interest was based on the fair market value and they reportedly also agreed to pay him $12.5 million on or before August 31, 2005.
But Colina paid Mr. Campbell $3.5 million and later determined that his interest was not valued at $12.5 million, leading to the legal dispute over the $9 million.
Mr. Campbell then sued his former partners, alleging oppressive and unfair conduct on their part.
It led to Justice Allen’s decision, which Colina and Messrs. Alexiou and Ferguson quickly appealed, asking the Court of Appeal to stay that ruling.
The high court heard the matter all day last Wednesday and made public a brief ruling yesterday, promising that its decision will be put into writing and handed down at a later date.
The court, meanwhile, will next week hear the application filed by Philip “Brave” Davis, Mr. Campbell’s attorney, for Mr. Alexiou to be sent to prison.
Mr. Campbell, the former president of Colina Insurance Company, had engineered Colina’s controversial takeover of Imperial Life, which was approved by the government just over a year ago despite strong opposition from Colina’s competitors, who had argued that the approval would have been dangerous for the industry.
As part of the approval, the government attached 21 stringent conditions and warned that Colina would face penalties if it failed to adhere to those conditions.
Early this year, Acting Executive Director of the Securities Commission Hillary Deveaux confirmed to The Bahama Journal that the Commission had in hand a report from KPMG accounting firm which had done a review of the Colina group to determine whether it was adhering to the conditions the government attached to its controversial purchase of Imperial Life.
Following its acquisition of Colina and the fallout among its partners, Colina announced that the Board of Directors had approved a reorganization plan, which involved the appointment of a new executive team.
Colina Insurance Company Limited shareholders also approved the appointment of three new directors at the time: Macgregor Robertson, Zhivargo Laing, and Ednol Farquharson.
Just last month, ColinaImperial, announced that chartered accountant Montgomery Braithwaite had been appointed president.
It was another step in the restructuring plan which came after the break in the relationship Messrs. Alexiou and Ferguson had with Mr. Campbell, a former partner with whom they once had an harmonious relationship.
Their relationship was so tight that in a written ruling last year regarding another issue related to their fallout, the Court of Appeal wrote that their association which effectively commenced about 1997, was “a testimony to both their business acumen and their vision as financial magnates in that – in the Bahamian context, at least – they have been able to build within a short while something close to a mini financial empire and, in the Bahamian context again, were able to erect by their skill and ability something approaching a monolithic financial edifice.”
The Court of Appeal also said in that ruling that the harmony that existed between the men “conspicuously combined to the startling success that their venture achieved because up to March [of 2005] or thereabouts, complimentary notes were being written by the existing board of directors to and in favour of [Mr. Campbell], also then a director.”
The Court said it was a matter of some regret, if not misfortune, that whatever was the nature of their differences, or whatever led to the differences that arose between the partners, especially Mr. Alexiou, should have arisen so soon after their initial success and so soon after the life of the fledgling empire.
“It is very clear to us, from all that we have read, that the underlying acrimony between these parties has reached a point of no return,” that ruling said.
Mr. Campbell had a 45 percent interest in Colina Financial Group, and the remaining 55 percent was held by Messrs. Alexiou and Ferguson.
By: Candia Dames, The Bahama Journal
