Barbara Gayle and Gareth Manning, Gleaner Writers

Carlos Hill, chairman of Cash Plus Ltd, addressing a large crowd of investors at the Merl Grove High School Auditorium, St Andrew, in this November 2007 file photo, shortly after a commercial bank refused to honour cheques drawn on its accounts. - File

The five-year-old investment club Cash Plus Limited, which has been engaged in a number of legal battles over the past 12 months, is in receivership.

A company goes into receivership when its debt exceeds its income.

Kevin Bandoian, a chartered accountant employed to Price-waterhouseCoopers in the United States, has been appointed joint receiver-manager.

Work to start immediately

In a release issued to the media yesterday, Pricewaterhouse Coopers stated that Bandoian will commence work immediately from the offices of Cash Plus and its affiliates under the supervision of the court, and will advise creditors of the progress of the process.

The appointment was made yesterday after one of the managers of Cash Plus went to the Supreme Court and got approval for the appointment of a temporary manager. Senior Puisne Judge Marva McIntosh granted the approval after hearing an application from attorneys-at-law Gordon Robinson and Minette Palmer.

The appointment of the receiver-manager allows for supervision of the operations of Cash Plus. It also allows for the determination of assets belonging to the company so that a report may be made to the court on the assets available for distribution to creditors.

The court order, which was granted yesterday, prohibits Cash Plus and its affiliates - whether through its directors, agents, officers or employees - from selling, transferring or otherwise dealing with or dissipating the assets of Cash Plus.

Cash Plus issued a notice in The Sunday Gleaner that it would not be able to pay its lenders until April 14.

The company has 40,000 lenders with loans totalling $4 billion.

A cease-and-desist order, which remains in effect, was issued by the Financial Services Commission (FSC) in December against Cash Plus until it received a licence to deal securities or have its investment products registered.

Cash Plus brought an application before the Supreme Court, in January of last year, seeking declarations as to whether the nature of its business required it to be registered under the Securities Act. In January, this year, it withdrew the suit and said it was willing to be registered with the FSC.

So far, Cash Plus has not applied to the FSC to be registered.