[SkyBahamas] $28m ‘Sham Loans’ Judgment Upheld Against Sky’s Butler

News about this airline - please include a link to the source as well as the article text itself.
Web site: http://www.skybahamas.net/
Post Reply
User avatar
bimjim
Forum Administrator
Forum Administrator
Posts: 34754
Joined: Fri May 12, 2006

[SkyBahamas] $28m ‘Sham Loans’ Judgment Upheld Against Sky’s Butler

Unread post by bimjim »

http://www.tribune242.com/news/2021/apr ... ys-butler/

[SkyBahamas] $28m ‘Sham Loans’ Judgment Upheld Against Sky’s Butler
NEIL HARTNELL Tribune Business Editor
Friday, April 23, 2021

• Airline’s financier ‘elated’ at Supreme Court verdict
• Now readies to move for ‘assessment of damages’
• Appeal likely as deputy registrar slams ‘delay tactics’

Sky Bahamas’ former financier was yesterday said to be “elated” that the Supreme Court has upheld the default judgment he obtained against its principal over an alleged $28m “bogus loans conspiracy”.

Michael Scott QC, the attorney for Fred Kaiser, told Tribune Business he will now seek judicial direction for “an assessment of damages” to be awarded to his client after the Supreme Court’s deputy registrar scolded Captain Randy Butler for employing “delaying tactics” in battling the claims against him and the airline.

Carol Misiewicz, in yesterday’s ruling, refused to set aside the default judgment entered against Captain Butler, Sky Bahamas and Aviation Oversight Group on January 25, 2021, after finding they twice waited until “the 11th hour” to seek Mr Kaiser’s permission for extra time in which to file their defence to his allegations.

Ruling that they were “in clear contravention” of the Supreme Court’s rules, Ms Misiewicz also dismissed assertions contained in a letter from Captain Butler’s attorney that COVID-19 and his client’s location in Andros were disrupting their ability to craft and file a defence on time.

Mr Scott, when contacted after Tribune Business obtained a copy of the verdict, said of the outcome: “My client is elated, and he’s grateful for the excellent and succinct judgment of the registrar. He hopes at last that justice will be served.

“Subject to their [Captain Butler’s] right of appeal, the next steps will be to get directions to proceed to an assessment of damages” against Mr Kaiser and his two companies, Alpha Aviation and Advanced Aviation. It is at this stage that the former Sky Bahamas financier will place all evidence, including accounting and other technical issues, before the court in a bid to be awarded due compensation.

Michael Horton, the attorney for Captain Butler and Sky Bahamas, indicated to this newspaper there will likely be an appeal but did not confirm this as he has yet to discuss the deputy registrar’s verdict with his client.

“I’ve got to take Mr Butler’s instructions on that. The matter is still afoot,” he said. “We’re not finished with the registrar yet. There are opportunities for taking the matter further. It’ll be developing, I’m sure.”

Captain Butler could not be reached for comment before press time last night, despite Tribune Business making multiple calls and sending text messages to him.

Ms Misiewicz, noting that Mr Kaiser had served legal proceedings on Captain Butler and Sky Bahamas on November 19, 2020, said the duo had 28 days - until December 17 last year - to file a defence to the claims against them.

Mr Horton filed “appearances” for them and Aviation Oversight Group with the Supreme Court on December 4, 2020, but did not communicate with Mr Scott until the December 17 deadline day when he asked that his clients be given until end-January 2021 to file their defence.

Mr Scott gave Captain Butler and his attorney “a considerable extension” until January 22, 2021, together with “the explicit warning that no further extensions would be agreed”. However, the former Sky Bahamas principal and his attorney again waited until that deadline was upon them before requesting “further and better particulars” of Mr Kaiser’s allegations via five pages of questions.

Mr Scott entered the judgment in default of defence against Captain Butler and Sky Bahamas some three days later, sparking their efforts to overturn it. Mr Horton, during the hearing before Ms Misiewicz, argued that the default judgment “was premature and therefore irregular” because the call for more details on the case against his client had not been addressed.

However, the Supreme Court’s deputy registrar ruled that this assertion “does not avail them” because Captain Butler and his attorney had failed to comply with Supreme Court rules governing how “further and better particulars” must be sought.

Turning to Captain Butler’s argument that he was unable to instruct Mr Horton on his defence because he had caught COVID-19 and was quarantined on Andros, Ms Misiewicz added: “I do not see how he or the other defendants were able to instruct their attorney on the extensive questions contained in the ‘further and better particulars’ summons but not be able to give instructions on any kind of defence.

“Furthermore, it is notable that nowhere in the Butler affidavit is there set out the barest outline of a defence or any grounds of a defence. I was concerned by the serious allegations in the statement of claim. However, the Butler affidavit does not even condescend to contradict or challenge the allegations of fraud, conspiracy or breach of fiduciary duty.

“In point of fact, the submissions by Mr Horton do not address or assert any form or shade or character of a possible defence. He says that the lack of particulars ‘unfairly prejudices’ the defendants but does not show how they are prejudiced.”

Finding that “there have been multiple delays” caused by Captain Butler and his attorney failing to file a defence within the time allowed by the Supreme Court’s rules, Ms Misiewicz said: “Having obtained, at the 11th hour, an extension of time to file, they again delayed until the last day of the agreed extension to act.

“But this time it was not to file a defence as they should have under the agreement. Rather, it was to take a fresh step of filing a summons for further and better particulars. This latter step, being in clear contravention of the rules, could only be seen as a further delaying tactic and not, in all of the circumstances, to be a bona fide step in uncovering some ambiguity or unclear facts arising on the pleadings.”

The claims by Mr Kaiser that he was defrauded of $28m via sham loans triggered the resignation of former deputy prime minister and minister of finance, K Peter Turnquest, even though he was not named as a defendant in the original writ.

Mr Turnquest, who like Captain Butler is vehemently denying the allegations in that document, was described as “a director and manager” of both Mr Kaiser’s companies, as well as “owning and/or controlling and/or managing” Sky Bahamas. The former deputy prime minister, however, is not named in yesterday’s default judgment ruling nor the earlier filing.

Mr Kaiser, whose main business interest, Alpha Technologies, agreed in 2004 to pay some $36m to the Internal Revenue Service (IRS) after pleading guilty to tax fraud, is alleging that Captain Butler and Mr Turnquest engineered a decade-long conspiracy that lasted until 2017 “to enrich themselves” by defrauding his companies while concealing their activities.

The statement of claim, which has been seen by Tribune Business, alleges that the duo “dishonestly caused” Alpha Aviation and Advanced Aviation to “pay away” $20.68m and $5.917m, respectively, to Sky Bahamas via “some kind of bogus loans”.

No particulars were given to describe how the scheme worked, although Mr Kaiser’s companies alleged that Mr Turnquest and Captain Butler then used “some 39 fraudulent invoices and/or book entries, and for no adequate consideration”, to drain away some $3.8m paid by Alpha Aviation to Aviation Oversight Group via 39 separate cheque payments between February 2008 and July 2016.

A further $3.026m was also alleged to have been siphoned off by the duo “as at December 31, 2017, to AOG Maintenance Ltd, a company that owned Sky Bahamas’ maintenance hangar at Lynden Pindling International Airport.

Mr Kaiser and his companies, making it clear that they have come for the monies they believe are due and owing, are seeking a Supreme Court Order that an accounting be done to determine what is outstanding and that this money subsequently be paid to them.
User avatar
bimjim
Forum Administrator
Forum Administrator
Posts: 34754
Joined: Fri May 12, 2006

Re: [SkyBahamas] $28m ‘Sham Loans’ Judgment Upheld Against Sky’s Butler

Unread post by bimjim »

https://thenassauguardian.com/butler-lo ... n-default/

Butler loses bid to set aside judgment in default
24 April, 20201

Sky Bahamas CEO Randy Butler, who is accused of defrauding two companies of millions of dollars, lost his bid to have a judgement in default of defense entered against him set aside.

In January, Alpha Aviation Limited and Advanced Aviation Limited, the plaintiffs, entered a judgment in default of defense, stating that no defense was entered by Butler, Sky Bahamas Airlines Limited and Aviation Oversight Group Ltd., the defendants.

Attorney Michael Horton, who represents the defendants, filed an application to set aside the judgment in default.

However, Supreme Court Deputy Registrar Carol Misiewicz yesterday “declined” to exercise her discretion to set aside the judgement in default of defense. “… I cannot find any support in the evidence, or as made out in argument, for a defense with a reasonable degree of conviction on which I could rest the exercise of the court’s discretion in favor of the defendants.

“I will award the costs of the application to the plaintiffs/respondents. I will hear counsel as to quantum prior to fixing the costs.”

In a statement of claim filed on November 16, 2020, Alpha Aviation Limited and Advanced Aviation Limited allege that Butler, Sky Bahamas Airlines Limited and Aviation Oversight Group Ltd., together with former Minister of Finance Peter Turnquest, conspired “wrongfully and with intent to injure” those companies and/or “to cause loss to them by unlawful means and/or to enrich themselves …”

Turnquest is not named as a defendant in the matter.

The court document alleges that these fraudulent acts occurred between 2008 and 2017. Alpha and Advanced allege that as at December 31, 2017, Turnquest and the other “conspirators” dishonestly caused Alpha to pay away a total of $20,680,337.33 to Sky Bahamas, as in each case, some kind of bogus loan. Turnquest was a director and manager of those companies, according to the statement of claim.

The companies allege that as at December 31, 2017, the conspirators had dishonestly caused Advanced Aviation to pay away via wire transfers a total of $5,916,587.67 to Sky Bahamas, also as some kind of bogus loan(s).

Additionally, the statement of claim alleges that as at December 31, 2017, the conspirators dishonestly caused Alpha to pay away a total of $3,026,000 to themselves via a company then controlled and/or managed by them, namely AOG Maintenance Limited.

It is also alleged that around February 2008 and July 2016, the conspirators dishonestly caused Alpha, by means of some 39 fraudulent invoices and/or book entries, and for no adequate consideration, to pay away to Aviation Oversight (37 checks) and to Sky Bahamas (two checks) the sum of US$3,800,000.

In the statement of claim, the plaintiffs ask for an “order that each defendant compensate the plaintiffs in equity; and an account of all sums misappropriated by the defendants from the plaintiffs and an order for payment of all sums found due upon taking of such an account”.

They also ask for a declaration that the defendants hold all sums taken from the plaintiffs and/or all assets representing such sums, on constructive or resulting trust for the plaintiffs; damages; interest; all necessary or further accounts, directions an enquires; further or other relief; and costs.

Request for extension

Misiewicz noted that a writ of summons was filed by the plaintiffs on November 16, 2020, and served to the defendants. “Since the statement of claim was indorsed on the writ, this meant that a defense was due from each of the defendants 28 days after the writ was served, that is to say, by 17th December 2020,” she said. “Mr. Horton admitted during argument that there was no communication between counsel for the respective parties between 4th December and 16th December 2020.

“On 17th December 2020, the last day for filing a defense, Mr. Horton wrote to Mr. [Michael] Scott (the attorney for the plaintiffs) and asked for an extension of time until the end of January 2021 within which to file a defense. By this stage the defendants – or at least the 2nd and 3rd defendants – had had the writ and statement of claim for a full 28 days.”

In his letter to Scott requesting an extension, which was included in the decision, Horton said, “As you might appreciate, our request is dictated by the complexities of the case, coupled with the constraints which affect communication with the principal defendant named in this action who lives mainly in Andros.

“The need to consult with him as closely as possible is also affected by the limitations imposed by the health conditions in our country at this time.” Misiewicz continued, “Mr. Scott replied to this letter the very next day, indicating that he was instructed to convey that his client would reluctantly agree to an extension to the 22nd January 2021.

“This was not all the way to the end of the month as the defendants had hoped, but was a considerable extension nevertheless. In the letter, Mr. Scott simultaneously delivered the explicit warning that no further extensions would be agreed.”

But, on January 22, 2021, a Friday, rather than filing a defense in the interim or by the agreed deadline on that day, the defendants filed a summons for further and better particulars, Misiewicz said. She said five pages of questions were contained in the summons.

The plaintiffs entered a judgement in default of defense the following Monday, January 25. The deputy registrar noted that in his letter to Scott, Horton’s explanation for an extension “was in vague and general terms”. “In my view, the casual nature of the letter suggests they considered and expected they were entitled to the extension,” she said. “I formed this view because of the timing when it was issued – on the very last day a defense was due – and also, because it glosses over the modern methods of electronic communication that are commonly in use, especially during the restricted movements of lockdowns that obtain during this pandemic.

“Then, having obtained at the 11th hour an extension of time to file, they again delayed until the last day of the agreed extension to act. But this time it was not to file a defense as they should have under the agreement, rather it was to take a fresh step of filing a summons for further and better particulars.

“This latter step, being in clear contravention of the rules, could only be seen as a further delaying tactic, and not, in all of the circumstances, to be a bona fide step in uncovering some ambiguity or unclear facts arising on the pleadings.”

The deputy registrar also pointed to an affidavit filed on behalf of Butler on January 26, 2021. “… He says that the defendants were unable to file and serve a defense within the time allowed by law, but no explanation is given as to why this was the case,” she said. “Then in paragraph five of the Butler affidavit he says his instructions to his attorney could not be completed in time due to a number of reasons, but mainly because he was quarantined in Andros having contracted the coronavirus.

“It seems that in this paragraph (no.5) he is referring to the extension period rather than the rules period. However, I do not see how he or the other defendants were able to instruct their attorney on the extensive questions contained in the further and better particulars summons but not be able to give instructions on any kind of defense.”

Concern

Misiewicz also expressed concern over the serious allegations made against the defendants. “… It is notable that nowhere in the Butler affidavit is there set out the barest outline of a defense or any grounds of a defense,” she said. “I was concerned by the serious allegations in the statement of claim. However, the Butler affidavit does not even condescend to contradict or challenge the allegations of fraud, conspiracy or breach of fiduciary duty.

“In point of fact, the submissions by Mr. Horton do not address or assert any form or shade or character of a possible defense. He says that the lack of particulars unfairly prejudices the defendants but does not show how they are prejudiced. The defendants’ case seems to be substantially comprised of complaints about what the plaintiffs ought to have done: they ought to have applied for summary judgment, and they ought to have answered the request for further and better particulars.

“Because they did not, Mr. Horton argues that the default judgment ought to be set aside. Bearing in mind that the rules require a defendant to serve a defense before being entitled to seek particulars, the argument that the plaintiffs ought to have provided particulars first, is in the circumstances without weight or merit.”
User avatar
bimjim
Forum Administrator
Forum Administrator
Posts: 34754
Joined: Fri May 12, 2006

Re: [SkyBahamas] $28m ‘Sham Loans’ Judgment Upheld Against Sky’s Butler

Unread post by bimjim »

https://ewnews.com/still-in-the-ring-fo ... urt-ruling

STILL IN THE RING:
Former Sky Bahamas chief vows to fight $30M fraud claim “to the very end” despite court ruling
Natario McKenzie
April 26, 2021

NASSAU, BAHAMAS

Captain Randy Butler, former CEO of Sky Bahamas, yesterday vowed to “fight to the very end” against “outlandish” claims that he defrauded two companies owned by the airline’s former financier of nearly $30 million.

Butler told Eyewitness News he will continue to fight to prove his innocence despite a default judgement against him being upheld last week.

“I am going to let the courts and lawyers deal with this,” said Butler.

“I feel the court is the right place for this to go. I’m trusting the court and God to deal with this. We are protesting this default judgement.

“It’s unfortunate that there are very outlandish claims but we can’t get better particulars. It’s unfortunate that people can just throw out accusations against you and you have to spend money to defend yourself. It’s unfortunate that politics got involved and the relationship at the top went the way that it did.”

He added: “These are outlandish claims about fraud. One thing I have is my name and my character. I will be fighting this the very end. I am not going to stand by and let someone destroy my character and livelihood in my country. I am trusting God on this. We will win this.”

Back in January, Alpha Aviation Limited and Advanced Aviation Limited, the plaintiffs, entered a judgment in default of defense, claiming that no defense was entered by defendants Butler, Sky Bahamas Airlines Limited and Aviation Oversight Group Ltd.

Former Sky Bahamas financier Fred Kaiser, who agreed in 2004 to pay some $36 million to the Internal Revenue Service (IRS) after pleading guilty to tax fraud, is seeking a default judgement against Butler over an alleged $28 million “bogus loans” scheme. The court document alleges that these fraudulent acts occurred between 2008 and 2017.

The allegations triggered the resignation of former deputy prime minister and minister of finance, K Peter Turnquest, although he was not named as a defendant in the original writ.

Turnquest, who like Butler has strongly denied the allegations, was described as “a director and manager” of both Kaiser’s companies, Alpha Aviation Limited and Advanced Aviation Limited, as well as “owning and/or controlling and/or managing” Sky Bahamas, according to the writ.
Post Reply

Return to “SkyBahamas Airlines”