By Barbara Gayle, Staff ReporterTHERMO-PLASTICS (JAMAICA) Limited and its subsidiary Plas-Pak, both in receivership, have filed suit in the Supreme Court against Richard Downer and his firm PriceWaterhouseCoopers for alleged conspiracy to sell the firm at an undervalued price.
The suit by Jean-Marie Desulme, managing director of the companies, is seeking to recover to recover $80 million, plus damages, and is the second suit filed against Downer and the auditing firm, in relation to his stewardship as receiver/manager.
Last year, Thermo-Plastics/Plas-Pak new receiver Douglas Chambers had alleged fraud and a breach of fiduciary duty in respect of the companies when they were under Downer's management, and is seeking to recover some $116 million. The suit is pending in he Supreme Court.
Mr. Chambers was hired to wind up the companies by debt collector Dennis Joslin, who came into possession of the firms as part of the bad debt portfolio he bought from FINSAC.
The claimants charge under the current suit that Downer and PriceWaterhouseCoopers in which he is a senior partner, sought to sell Thermo-Plastics to National Investment Bank of Jamaica (NIBJ) at a price less than other offers.
The claimants are also questioning the legality of Downer's receivership which was inititated by defendants National Commercial Bank and Recon Trust in 1998.
The defendants named in the suit are Downer, the firm PriceWaterhouseCoopers, PriceWaterhouseCoopers Ltd., Yvon Desulme and Thermo-Plastics Jamaica Acquistion (1998) Ltd.
SEEKING SUBSTANTIAL
DAMAGES
The claimants, in the suit filed on March 8 this year by attorney-at-law G. Anthony Levy, are seeking substantial damages against the defendants in addition to the specific sums of of $23.2 million for interest on overdraft balances as well as $56.9 million for fees and expenses.
They have made a number of allegations, including conspiracy among some of the defendants, because the companies were allegedly sold to NIBJ which was not the highest bidder.
Attorney-at-law Derek Jones of Myers Fletcher and Gordon, which represents Downer and PriceWaterhouseCoopers, said they would be defending the action.
Attorney-at-law Karen Duncan of DunnCox who is representing Recon Tust and Grace McKoy of NCB's legal department, said on Monday they had just received the documents and were now reviewing them.
NCB had sold the debt to Recon Trust.
The claimants are seeking a declaration that NCB and Recon Trust were not entitled or emmpowerd on March 19, 1998 to appoint Downer as the receiver and manager of their business and assets pursuant to the provisions of the debentures dated July 19, 1997.
They are seeking declarations that the appointment of a receiver and manager of the two companies were illegal and contrary to law.
Declarations are being sought that NCB and Recon Trust wrongly and for improper, unlawful and corrupt purposes used and abused the powers given to the debenture holder, when they appointed Downer as the receiver and manager of the two claimants.
They are seeking orders for Downer to give an account of his activities and for all monies coming into his hands pursuant to his purported appointment as receiver and manager of the two companies, and for him to pay damages sustained by the companies.
The claimants are also seeking an order that Downer pay damages for breach of his fiduciary duties to them, or further and in the alternative, damages for fraud for breaching his fiduciary duties, receiving or retaining secret profits, negligently and/or knowingly caused the overpayment of certain professional services and caused or procured secret profits for PriceWaterhouseCoopers.
It is also being contended in the particulars of claim that Downer represented to the claimants that the hourly rate of professional fees incurred by him was at the rate of $7,000 per hour well-knowing that said rate was $2,500 per hour.
It is further contended that during November 1998 to June 2002, Downer and his partner John Lee caused themselves to be elected as the two directors of Thermo-Plastics Jamaica. The claimants have blamed Downer for carelessly operating the current accounts of Thermo-Plastics Jamaica, causing massive overddraft interest totalling $23.4 million from 1999 to January 2001. They are seeking orders from the court to recover that sum as well as $56.9 million for fees and expenses with interest at a commercial rate.
An order is being sought for Downer to pay damages for breach of his fiduciary duties to defendant Thermo-Plastics Jamaica in that he entered into certain arrangements and misused or misapplied the funds of defendant Yvon Desulme. They are seeking an order for Yvon Desulme to pay damages for conspiracy in that Desulme, a former director of Thermo-Plastics, allegedly conspired with servants and agents of NCB and Recon Trust, namely Dunbar McFarlane, Jeffrey Cobban, Patrick Hyltn and Denis Booth to put them into receivership so as to cause loss and damages to them.
NCB and Recon Trust are being accused of conspiracy to sell the business or shares in the defendant Thermo-Plastics Jamaica Acquisition to National Investment Bank Jamaica Ltd. (NIBJ). Orders are being sought against those two defendants for breach of fiduciary dutes and failure to act in good faith in dealing with the sale of the assets of the claimants. The defendants are accused of selling them at an undervalue to NIBJ instead of to other parties on higher or more advantageous terms.
They are seeking to get an order setting aside the agreement for sale and the purchase of assets which were made between Downer and Thermo-Plastics Jamaica Acquisition. The claimants have alleged that the sale of the assets were made in circumstances which were improper and irregular and are seeking orders against Thermo-Plastics Jamaica Acquisition to recover the assets.
