A section of an overgrown KES Development at Old Stony Hill Road, as seen November 2007. - Rudolph Brown/Chief Photographer

Capital and Credit Merchant Bank (CCMB), which holds a debenture against assets of insolvent KES Development Limited, has so far not been forthcoming with information on what assets it has taken control of, creditors of the failed real estate construction company heard at a meeting Wednesday.

But the bank's legal assistant, who was at the meeting, is denying that it got any formal request to disclose a statement of assets, saying later in discussion with the Financial Gleaner she personally had not seen one.

"We are checking internally to see if this was done," said legal assistant Petagaye Fairclough.

Not having full knowledge of the holdings has put KES liquidator, Ken Tomlinson, in the difficult position of not being able to say with any degree of certainty whether the assets of KES are sufficient, he told the meeting, to cover outstanding claims against the company estimated to be in the region of $1 billion.

Creditors concern

Creditors themselves raised concern that Capital and Credit was already in the process of selling equipment and properties without communicating with other parties affected by the liquidation of KES, but Fairclough while not denying properties had been put on the market, said at the meeting that there was no wholesale disposal of assets.

KES chairman Hugh Scott, who opted to wind up the company last December, was said by Tomlinson to have lodged a letter with the Companies Office of Jamaica claiming that projects worth some $700 million were operational and that all debts would be settled by December 2009 - a year into the liquidation process.

But the liquidator also told the 35 creditors at the Courtleigh meeting that no assessment had yet been done to determine whether the projects really existed and what their status were.

At least one KES development on which construction was abandoned several years ago, was put on the market for $124 million in March. While realtors advertising the project would not disclose who listed the Mountain Valley property on Old Stony Hill Road, they did say it was KES' bankers.

The Real Estate Board in advertisements a few months ago asked persons who paid deposits on the 16 townhouses that were to form Mountain Valley Estate, to make contact with the board.

Sandra Watson, head of the Real Estate Board whom the Financial Gleaner called for comment after the KES meeting, said a charge has been placed on the title on behalf of depositors, which any purchaser of the property must agree to. So far there have been no notifications, and the 'for sale' signs remain in place at the site of overgrown partially done townhouses.

Watson said concerns were raised with the Board about seven of KES' properties, but three - including one on Dillsbury Avenue and another on Rosemarie Drive in Kingston - have been completed and handed over to the original purchasers.

Another property on Church Road was incomplete, but this was sold and the purchasers refunded "to the extent of the money that the Board got," she said.

Problematic development

But a development at 33 Jacks Hill Road, while completed, remains problematic, as the units have not been handed over to depositors.

Watson said resolution of this issue required dialogue with Capital and Credit but did not offer specifics.

Fairclough told the Financial Gleaner that in relation to lands and assets currently being sold, CCMB's external lawyer Georgia Gibson-Henlin would have to address those queries, but the attorney was said to be out of office when called for comment.

Developments which were never started but on which the bank appears to hold a lien include properties at Tavistock Terrace and Bamboo Avenue.

The self-identified original owner of the Tavistock Terrace lot, who was present at the meeting with her family, said they had entered into a joint venture agreement with KES' Scott to develop the property and in so doing had signed the title over to him.

Scott, they said, used the title to borrow $11 million from Capital and Credit but that no work was done on the property.

The family said they became aware of the moneys owned when the property was advertised for sale by Capital and Credit.

Another investor at the meeting said that he had put $10 million into Mountain Valley and to date had recovered nothing.

The KES creditors said the longer the assets remained unsold, the greater the likelihood that moneys recovered would go to the debenture holders, leaving nothing for ordinary depositors.

"It's easier for all parties concerned - both secured and unsecured - to work together," Tomlinson said later through his office, when the Financial Gleaner sought comment.

"There has to be some dialogue with holders of debentures. Hopefully, they will get back to us to set a meeting. If this does not work, we will replace the current effort with a creditors liquidation."

Earlier at the Courtleigh meeting, the KES creditors nominated three from among them to participate in discussions with primary creditors CCMB and Jamaica Mortgage Bank, in anticipation that the banks would agree to meet with them.

avia.collinder@gleanerjm.com