British American policyholders will get some money by year-end
Life insurance policyholders of the folded British American Insurance Company (BAICO) can expect to receive some money before the end of this year.
Stephen Lowe, the Official Receiver, said that discussions were ongoing over the sale of 133 Front Street, in which BAICO has an interest, and while the process had taken longer than expected it was at an advanced stage.
But he added that if the sale was not completed by the second week of December an interim payment would be made as soon as possible with a second and final distribution made once the proceeds from the sale were received.
Mr Lowe said that despite failing to finalise the deal by late summer as originally hoped, he was optimistic the deal would go through soon.
“Given the large number of creditors and the costs involved in a distribution, it will be far more cost effective and efficient to make a one-off payment to the creditors,” he said in a statement released yesterday.
“This approach will minimise the administrative burden and the duplication of cost and effort in making multiple distributions to over 5,500 creditors.”
In an interview with the media, Mr Lowe said that the one-off payment would maximise and proceeds that went back to the creditors and save on distribution costs.
Mr Lowe said that he sympathised with creditors who were frustrated over the time taken to cut the cheques.
He said that he anticipated that policyholders would receive about 50 cents on the dollar or slightly less of the value of their policies.
On the assumption that the sale would go through by late summer, all creditors were informed that if the sale was concluded by that stage their cheques would be made available for collection by the end of September but the sale was held up due to the economic downturn.
Despite not disclosing the identity of the buyer and the value of the sale, Mr Lowe said that he was satisfied with the amount agreed on given the current state of the economy and real estate market.
BAICO presently owns 40 percent of the building with the other 60 percent belonging to the BAICO Bermuda pension scheme. In April this year the liquidators’s agents KPMG Advisory Ltd put a $3.6 million price tag on the building.
The previous month policyholders had voted overwhelmingly in favour of the scheme of arrangement drawn up by the liquidators that would give them less than 50 cents on the dollar of the value of their policies.
BAICO’s Bermuda business, which is a branch of its parent company in the Bahamas and went into receivership in August 2009, has assets of almost $11 million with liabilities of around $21 million.
Gareth Walters, senior manager, advisory at KPMG, confirmed that none of the company’s other creditors in the Caribbean received any payments as yet.
A further update for creditors will be made at the end of November.
For more information contact KPMG Advisory Ltd at infoba[AT]kpmg.bm or visit the website at www.kpmg.bm/ba or call the British American hotline on 294-2651.