Headline — 11 August 2018 — by Rowland A. Parks
Choice Bank sues Central Bank for damages

Choice Bank is also suing the Minister of Finance and the AG

BELIZE CITY, Thurs. Aug. 9, 2018– According to court papers we have received, the Central Bank of Belize  is being sued by Choice Bank; and not only that: also named in the lawsuit as defendants are the Minister of Finance as first defendant (Prime Minister Dean Barrow) and the Attorney General as third defendant (Michael Peyrefitte).

Yesterday, we asked, via an email, if the Central Bank, which is named as the second defendant, had any comments now on Choice Bank’s lawsuit that was filed at the Registry of the Supreme Court by attorney Eamon Courtenay, SC.

In one of the quickest responses we have received from the Central Bank, we were told, “Regarding the referenced subject, please note that the matter is being addressed by the Central Bank’s attorneys. The Central Bank has no further comment at this time regarding the subject matter.”

The court papers stated that Choice Bank, at all material times, up to June 29, 2018, conducted international banking in Belize with a Class A banking license granted by the Central Bank of Belize, pursuant to Section 8 of the International Banking Act.

By means of a series of correspondences and meetings, including emails and letters between May and June, Choice Bank had proposed a plan to the Central Bank and the Minister of Finance by which, it said, it had intended to return all deposits to its customers in a repayment plan. The approval of the Central Bank and the Minister of Finance’s approval were sought to implement the repayment plan.

Reportedly, without responding to Choice Bank, on or around June 29, the Central Bank recommended to the Minister of Finance that Choice Bank’s license be revoked, and the Minister of Finance acted on the Central Bank’s recommendation and revoked the license.

The court papers went on to state that Choice Bank was not informed by the Central Bank that it had recommended to the Minister of Finance that the license be revoked. “Nor did the Minister inform Choice Bank that he had received the recommendation from the Central Bank, and that he was considering revoking the license,” the court papers said.

The Central Bank went ahead and appointed Henry Hazel as liquidator for Choice Bank. Then, reportedly without issuing any notice to Choice Bank, the Central Bank appointed Cedric Flowers to replace Hazel as liquidator for Choice Bank with effect from July 4, 2018.

The two claimants, Choice Bank Limited and Choice Group Holdings, LLC, a company based in New York City, but incorporated in the State of Delaware, USA, which holds 100 percent of issues and outstanding shares of Choice Bank, believe that the actions of the Central Bank and the Minister of Finance were wholly unjustified and unlawful. The claimants are alleging that as a result of these unlawful decisions, they have suffered loss and damages, including damage to the reputation of the directors and officers of Choice Bank and Choice Group Holdings, LLC.

As a result of the losses that they suffered, the claimants are seeking several declarations from the Supreme Court.

They are seeking a declaration that in deciding to recommend to the Minister that he revoke the license, the Central Bank and the Minister acted in breach of their statutory duties under the International Banking Act.

They are also seeking a declaration that the Central Bank and the Minister acted in breach of the statutory duties imposed upon them by the International Banking Act.

In addition, they are seeking a declaration that the Central Bank and the Minister failed to exercise their powers to promote the International Banking Act and they acted for ulterior or improper purposes.

“A declaration that the Minister and the Central Bank acted unlawful as being in breach of Choice’s right to a fair hearing in that they failed to give Choice an opportunity to explain why the intended decisions were not necessary and that their actions were irrational in light of the bank’s Repayment Plan,” said the court document.

The lawsuit is seeking to recover damages, including aggravated damages and damages to reputation, costs and such further relief that the court may see fit.

The Attorney General is named as a defendant in all lawsuits against the government, because the office is the principal legal advisor to the government.

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Deshawn Swasey

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