Claude Clarke, owned Highgate Foods for 30 years.

Bad debt collectors Jamaica Redevelopment Foundation Inc (JRF) is getting ready to concede victory to Desmond Blades, whose Musson group, in September announced its ownership of the Highgate chocolate trademark.

Sources say both parties could finish tidying up the paper work as early as today.

"The lawyers are going over the final details," the Financial Gleaner was told on Wednesday. "They're about 90 per cent there."

Claude Clarke, the owner of Highgate Foods Limited (HFL) had held the trademark, sources said, under the name of a different company called Highgate Holdings, which was not covered by the debenture that the bank, and now JRF, holds over the chocolate company's assets.

No breach of loan conditions

Clarke's sale of the brand name, therefore, created no breach of his loan conditions and could not legally be reversed, lawyers for JRF appear to have conceded.

But Blades' triumph puts the debt strapped confectionery in an even more precarious position.

With Highgate Foods now in receivership because of unserviced debts running above an estimated $100 million, the trademark that was built on quality chocolates was considered one of the company's most valued assets, certainly its most prized.

Its sale denies Highgate receiver Ken Tomlinson of Business Recovery Services Limited what was likely to be his best bargaining chip for wooing investors to the flagging Highgate plant.

His other option would be to liquidate.

But, Paul Scott of Musson Jamaica Limited, said the company plans to go into chocolate manufacturing in time to get the product to market by Easter, and is not opposed to acquiring the Highgate factory.

"We are willing to buy the plant," said Scott, grandson to Musson chairman Desmond Blades. "What we are not willing to do is wait."

The Facey manager said he had hoped for resolution of the Highgate issue in time to begin production for Christmas, a period when 60 per cent of chocolate sales are made.

"The next big sales is Easter," he said, noting that Highgate chocolates would be back on the shelves by then, and moving to reclaim the top spot it once held in the market.

If Musson does not strike a deal with Tomlinson, it plans to either contract the manufacturing of the confectionery to an overseas company, or invest in its own plant and equipment.

Scott would not comment on the investment Mussons - a private family-run operation - would make, but said a plant with new equipment would cost US$200,000 to US$250,000 to set up.

"We'll be making a decision in the next couple of weeks," he told the Financial Gleaner.

The struggling Highgate factory's most valuable holding is yet to be determined.

Highgate's remaining tangible assets includes the factory and equipment, which is old and in need of upgrading. It's unclear whether the approximate two-acres of real estate on which the plant sits in the community of Highgate, St Mary is owned by HFL.

Tomlinson would not comment on the job he is doing on behalf of the American bad debt collection firm, run by Janet Farrow, but persons in the know say he is still trying to sort out what value, if any, still resides in the company with a view to liquidating the assets.

Clarke, a former government minister and current chair of two state bauxite agencies - Bauxite and Alumina Trading Company and JBM - sold the brand name to Blades, apparently to raise funds as he attempted different strategies to save the company he has owned since the 1970s.

Exploratory talks on an expanded partnership in which Mussons, distributors of the chocolate, would take a financial stake in Highgate Foods and expand its marketing - a sunset bid by Clarke to pump fresh cash into his struggling firm - gained no traction.

Blades bought out the brand name from Clarke two years ago.

The Musson's chairman had predicted a win if his ownership of the trademark were challenged, saying last month he had the documents proving his claim was indisputable.

Said Scott yesterday: "We want to continue producing Highgate chocolate. We have a brand that is not on the shelf right now and we want to get it back on the shelf."

lavern.clarke@gleanerjm.com