Dennise Williams, Staff Reporter
Destruction wrought on George Town, Grand Cayman by Hurricane Ivan on Wednesday, September 15, 2004. 'Ivan' passed through the Cayman Islands as a category 5 hurricane, causing billions of U.S. dollars worth of damage. - ANDREW SMITH/ PHOTOGRAPHY EDITOR
THE DYOLL Insurance Company saga appears to have taken a turn for the worse for Jamaican claimants on the company's assets.
Hurricane Ivan battered the region in September 2004, scoring a direct hit on the operations of Dyoll Insurance in the Cayman Islands and to a lesser extent in Jamaica.
By February 2005, shares in the parent company, Dyoll Group, were suspended from trading by the Jamaica Stock Exchange (JSE).
In March, the Financial Services Commission (FSC) had stepped in and took over the operations of the parent company and, by April, its Jamaican insurance operations had been sold to Jamaica International Insurance Company. Now the mess has to be sorted out.
WINDING-UP CONFLICT
"The winding up of Dyoll Insurance Company will be very challenging and actually creates new legal ground," said Wilfred Baghaloo of PriceWaterhouseCoopers (PWC).
PWC has been drafted in to assist the provisional liquidator, Keith Cooper from the Trustee in Bankruptcy. Mr. Cooper was appointed by the FSC on July 4 to sort out the situation, but his powers have a 42-day legal limit.
And so a liquidator must be appointed to wind up the operations of Dyoll Insurance.
However, that sounds easier said than done, as there are two jurisdictions that believe they have the right to adjudicate the Dyoll Insurance matter.
The bulk of the over 6,000 insured claimants of Dyoll reside in the Cayman Islands and the courts on that island have stepped in.
CAYMANIAN RULING
"Dyoll had clients and has assets in the Cayman Islands," Mr. Baghaloo explained. "There is a deposit of CM$1.5 million (J$ 111.4 million) with the Cayman insurance regulators. There is a percentage ownership in a Cayman insurance brokerage and several bank accounts. The court in Cayman has said those assets belong to the Cayman branch of the company."
Mr. Baghaloo pointed out that according to the Companies Act of Jamaica, a branch is not a separate legal entity.
The Cayman ruling has thus, "created confusion," he said. "But they said it was necessary based on public policy."
Perhaps that was spurred by the announcement from the Cayman Provisional liquidator that creditors would only get back 30 cents on the dollar.
Nevertheless, Mr. Baghaloo said, "It is still early days so we can't say definitely how it will turn out. One can understand the anxiety."
Mr. Baghaloo said, "We have to deal with the legal complexities between the courts in Jamaica and Cayman Islands. However, the first priority of the liquidator after July 28 is to make an interim distribution to creditors."
PRESCRIBED PAYOUT
Under the Companies Act of Jamaica, there are prescribed ways for funds to be distributed. First to be paid are the secured creditors.
Next to be paid are preferential creditors such as government statutory bodies and employees.
Then come the unsecured creditors, such as those with insurance claims. In this group there are at least 6,000 individuals with claims of upwards of $3 billion.
And last, are ordinary shareholders. Mr. Baghaloo said, "You can see where they rank, if the numbers are correct."
