The dispute over a $25 million investment agreement between Citrus Products of Belize Limited, the Belize Citrus Growers Association and a pair of Caribbean investors is likely to become more embroiled in controversy.
Today the Committee of Five issued a public statement telling citrus growers, effectively, that company directors have gone ahead and sealed the deal, despite a resolution by growers that the deal could not be accepted unless a specific list of issues were settled.
The Committee of Five placed on record, in its statement released today, that “…mindful of its mandate and terms of reference by way of resolution passed at the special general meeting on October 28, 2006, [the Committee of Five] wishes to further state that all the conditions for the acceptance of the May 31st 2006 investment agreement have not been met.” [Emphasis theirs]
The release is notably couched in very diplomatic language and falls short of condemning the Belize signatories for closing a deal that does not square with the clear directive of growers.
It is evident from the very first paragraph of the release that the Committee of Five has thrown in the towel on its mandate:
“The Committee of Five hereby informs all citrus growers that it has concluded its work to oversee the changes to the investment agreement and submitted its second and final report to the CGA Committee of Management on 22nd December 2006.”
But, as we stated earlier, the mandate members gave to the Committee of Five is to see their recommendations through.
So what does this really mean? This evening we spoke with Committee chairman, Bill Tillett, who shared with us his perspective.
According to Mr. Tillett, the closure of the deal has made the work of the Committee “redundant.”
He pointed out that the Committee wrapped up its report on December 21 and the investment deal was closed on December 22.
“How can a legal matter be settled within hours?” he questioned. “They were obviously in the works quietly doing their thing.”
Tillett said that it is now up to citrus growers whose shares are being sold in the deal to act – which he suspects will happen.
But he said that actions need to be taken on two levels: the first is that the present directors of the company have to go; the second is that the investment agreement would likely continue to be contested in court.
We asked Bill Tillett whether he now feels in hindsight that growers should have outright rejected the May 2006 agreement and mandated their board to draft a new one, rather than request amendments to the dispute agreement. To this, he replied that, indeed, the first agreement should have been rejected out of hand.
But there is another legal point that may form a part of the argument: that the closing date for the investment agreement was stipulated as November 30, 2006. That deadline was not met, because it requires a decision from the court to permit the restructuring of Citrus Products of Belize Limited through the write off of accumulated losses – a decision that was not made until December 18.
According to Mr. Tillett, although the Committee of Five has asked to see a document that proves that the parties had agreed to an extension of the deadline, they have not received such a document.
For more background, see story on page 8 titled, “Citrus Products of Belize closes $25 million deal with Banks Holdings and Blue Waters.”