The Bank of The Bahamas’ most recent annual financial statements for the year ended June 30, continues to reflect the bank’s ongoing challenges with legal claims that could leave the bank more than $6 million in the hole.
In the bank’s annual financial statements, it reports its “other administrative expenses” as increasing by $7.2 million, while its accounts payable is reflected as climbing by $10 million.
Varying legal commitments and possible legal commitments leave the bank in a position to account for the possible losses, according to the bank’s financial statements, though it continues to fight a judgement that would cost the bank more than $6 million.
“As at year end, the bank had several unresolved legal claims,” the statement read.
“Various legal proceedings are pending that challenge certain actions of the bank. Most of these proceedings are loan-related and are reactions to steps taken by the bank to collect delinquent loans and enforce its rights against collateral concerning such loans.
“During the last quarter of the fiscal year, the bank was made aware of a significant legal claim against the bank in respect of a judgement in default and related damages of approximately $6 million plus interest and costs.
“The bank has filed the necessary applications to set aside the default judgment and to set aside the said damages. The bank has also filed papers to stay the enforcement of damages and in certain circumstances to strike out enforcement steps. Management considers that adequate provision has been made in these financial statements, included in other administrative expenses and accounts payable, for any losses that might ultimately be determined.”
BOB has sought a stay of a court order that awarded $6 million in damages to firms partially owned by the family trust of former State Minister of Legal Affairs Damian Gomez.
The order to award damages was issued on March 6, 2019, by Deputy Registrar Stephana Saunders, following years of legal action between the firms and BOB. Gomez said he resigned from the Christie Cabinet in December 2015, in order to pursue the matter.
BOB has argued that if a stay is not granted, the plaintiffs “will be entitled to enforce the judgement of $6,049,194.63 plus interest of 6.75 percent [e]ven though, if the bank’s applications are successful, the plaintiffs will not be entitled to these sums”.
The bank continues to collect interest payments from Bahamas Resolve Limited, which holds a $167.7 million promissory note for toxic loans taken off of Bank of The Bahamas’ books.
According to the financial statements, the bank received $4.8 million in accrued interest from Resolve in 2018, and $1.9 million this year.