Barbara Gayle, Staff Reporter

Dave Garcia, attorney with Myers Fletcher and Gordon, is to file a response to the CFC Construction suit. - File

CFC Construction Engineers Limited is fighting claims by Jamaica Redevelopment Foundation Inc., (JRF) that it owes the debt collector US$8 million ($528 million), and has taken the American company to court to bar it from selling off its assets.

But JRF, which notified the CFC earlier this year that it was going to sell several of its properties by public auction to recover the money, has already had successful bids on some of the properties.

The construction company, part of the project team developing the greenfield multi-purpose stadium in Trelawny for Cricket World Cup 2007, had got an injunction issued by Supreme Court justice Roy Anderson barring the sales, after the initial notification by JRF.

But the injunction was set aside in the Court of Appeal by judge Algernon Smith after CFC appealed an order by Anderson to pay US$3.5 million into an escrow account as a condition of the hold placed on the American firm.

CFC, which is represented by the law firm DunnCox subsequently backtracked on plans to further appeal Smith's ruling, hearings for which had been set for the penultimate week in September.

Case in court

But the construction company is following through on its suit in the High Court against the sale of its assets, contending that if the properties were sold its business would be severely prejudiced because most of the properties that JRF has tapped for sale are used for offices and storing equipment used on construction jobs.

The suit is pending in the Supreme Court. Attorney Dave Garcia of Myers Fletcher and Gordon is to file a defence on behalf of JRF.

The suit stems from outstanding bank loans which were taken over by JRF, when it acquired the portfolio of financial sector bad debts from government five years ago.

CFC and some of its directors had received loans from National Commercial Bank in the 1990s collateralised by properties in St. Ann, St. Mary and St. Andrew.

In July 2002, the parties had agreed that the existing debt of US$24 million would be restructured, stripping it down to US$4.2 million.

The claimants CFC said in court documents that at the time of the restructuring, Finsac - the agency from which JRF purchased the bad debt portfolio - was indebted to the company for $800 million (which converts to US$16.4 million at 2002 exchange rate) for construction work completed in December 1996 on the Fortbelle property in Manor Park, St Andrew, site of the former Crowne Plaza hotel.

CFC also contends that Finsac was to be blamed for its failure to service its loan with NCB, saying the bail out agency failed to honour its obligations to pay CFC the outstanding amount on the Fortbelle project.

CFC also said a $58 million and US$1.8 million award in its favour against Runaway Bay Develop-ment Limited (RBDL), for work done on the Hedonism III hotel in Runaway bay, St Ann, was denied it after the receiver for the latter company settled its debts for $25 million.

Pay debts

The construction company argues that the settlement was accepted to satisfy the debts due to JRF, despite the fact that the $25 million was insufficient to cover the other liabilities, saying the deal stifled its ability to service its debts as well as those of several other construction companies in which it was engaged.

Other claimants against RBDL included Trelawny Aggregate Limited, Glen Eyre Limited, Cedar Construction Company, FCE Services Limited, Decaba Rentals Limited, Carvel Stewart, Delroy Christie, Calvin Bernard and Barrington Richards.

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