Thu | Oct 29, 2020

Geddes widow cleared to sell D&G shares

Published:Thursday | March 29, 2018 | 12:00 AMMcPherse Thompson
The Red Stripe Jamaica brewery in Kingston.

The widow of a D&G heir has been cleared to sell most of her holdings in iconic drinks company Desnoes & Geddes Limited sought by Heineken Sweden, part of which a law firm had attempted to claim as payment for outstanding legal fees.

Heineken has been waiting for more than two years to acquire the shares, having expressed an interest in the holdings around the time of its takeover of D&G, which trades as Red Stripe Jamaica.

The Court of Appeal in late March partially lifted an order barring the disposal of some US$5 million of D&G shares held by Margie Geddes, the widow of Paul Geddes, but maintained a freeze on some of the units.

The original order by Supreme Court Justice Raymond King froze the shares, pending a determination regarding whether she was indebted to the law firm McDonald Milligen in the sum of US$1.048 million for legal fees.

According to the appellate judgment written by Justice Paulette Williams, the case dates back to events in 2011, when McDonald Milligen filed a claim against its client Margie Geddes for fees relating to work done between 1999 and 2008.

It was determined that Geddes owed the firm US$1,048,807.19. In December 2012, the law firm obtained an ex parte provisional order relating to Geddes' shares in D&G, which were held through Bardi Limited.

Heineken took D&G private after the acquisition, but stock market records up to December 2015 indicate that Bardi Limited held over 84.25 million shares in the drinks company.

Geddes began fighting the freezing order in April 2013, and the case was heard a year later, but judgment was reserved "and is still being awaited at this time," according to the Court of Appeal judgment.

The Financial Gleaner has learnt that the judgment is outstanding because the presiding judge, Raymond King, has since retired.

The Court of Appeal noted that in December 2015, attorneys for Geddes were approached by Heineken Sweden AB's lawyers about acquiring her Bardi shares, asking whether she would be willing to sell her shares in D&G.

The lawyers for Heineken indicated that they were prepared to assist in resolving the court case in order to free up the shares for sale.

Geddes was later advised that Heineken would be seeking to acquire majority share ownership in D&G and was offering to purchase shares at "a significant premium to the current trading price".

She subsequently applied to the court to have the charging order against the shares lifted but was denied by Justice Bertram Morrison in January 2016, who ruled that he had no jurisdiction to vary the order.

The appeal court disagreed with Morrison's decision and amended the order, notwithstanding arguments made by Attorney Vincent Chen on behalf of McDonald Milligen that it was inappropriate for the Court of Appeal to deal with the matter because it was still being adjudicated in the Supreme Court.

Geddes was represented by Michael Hylton QC in the appeal case.

However, the appeal court also granted a charging order, keeping some of the D&G shares frozen - 7.5 million units registered in the name of Bardi Limited - as well as the associated dividends.

The decision effectively restrains Geddes from selling or charging the shares held by her in Bardi Limited and the 7.5 million shares held by Bardi in D&G until the hearing of an application for a final charging order.

Chen was not reached for comment, but Hylton said that McDonald Milligen had 21 days from the date of the judgment to indicate whether it would be appealing the decision, but had not done so to date.

mcpherse.thompson@gleanerjm.com