The Financial Services Commission (FSC) and trustee of Stocks and Securities Limited (SSL), Caydion Campbell, have arrived at a middle ground on the contents of the trustee report to be presented at a meeting for creditors and claimants on October 25.

Campbell had been required to prepare a trustee report by Justice David Batts after he was restored to his role at the end of May, with the report to detail the state of the company. That report was submitted on September 25, a day before the open court hearing. The FSC, through its new attorney Symone Mayhew, had opposed the publication of the trustee report in its existing form based on what it had glimpsed at that point in time.

After nearly three hours of deliberation, Mayhew and Campbell’s attorney Caroline Hay were able to break the impasse with Campbell to edit the existing report into a format that more closely aligns with regulations in the Insolvency Act. That edited report was to have been submitted on Tuesday with a two-hour hearing to be held Thursday to discuss, among other things, whether the FSC has any new objections to the edited report.

“It is not just a complaint about semantics, My Lord. This is a report he wants to send to the creditors. That is why My Lord we are vehemently opposed for a report in this form to go to the creditors, but we also say My Lord that the report to the creditors is an entirely different report…,” Mayhew said in her opening remarks on the trustee report.

The FSC had requested that the trustee’s report be sealed at the September 26 hearing due to its concerns with the presentation of the report. This was based on its perspective that the report goes beyond the scope of certain subsections of the Companies Act and its possible erosion of trust in the financial sector regulator. The senior attorney delved into different sections of the report while giving verbatim from different cases in other jurisdictions to make reference to different sections of the existing Jamaican regulations.

“I will accept that there is certainly an overlap of what would be in the report to the court as it is that would be in the report to the creditors. Again, My Lord, it is the manner of presentation and certainly that the trustee has provided to the court is much wider than what is contemplated by Section 39 of the insolvency regulations. So, whereas My Lord, some of the information is the same, we will say that certainly as currently prepared, this report by the trustee provided to the court would offend regulation 39 and given the way that the information has been presented, My Lord, we contend that it would certainly as presented mislead the creditors and would not be in the interest of the bankruptcy estate or certainly not in the interest of justice,” Mayhew explained regarding her perspective on the report.

Section 233 of the Companies Act discusses the trustee’s report and the requirement to submit a preliminary report to the court while Section 39 of the insolvency regulations of the Insolvency Act also addresses the preliminary report to be submitted at the first creditors meetings. While both sections address the trustee’s report, the interpretation and application were both debated by both senior attorneys.

Hay presented in her remarks that different sections of Campbell’s initial report were in compliance with the different subsections of Section 233 of the Companies Act. She also questioned the practicality of the FSC’s request for there to be a second report to extract certain parts they weren’t in agreement with. This was based on the consideration regarding additional costs to incur from a split report when the first creditors meeting was yet to be heard.

“Given the current circumstances and applicability of the court’s order, the determination to be made as to the propriety and sufficiency, not styled and presentation, is to be determined with reference to both regulation 39 of the insolvency regulations and section 233 [Companies Act] together. Given the imperative of the court to do practical justice, we would submit that the better approach would be to look at whether the content of section 233 appears in the final report and whether the content of regulation 39 also appears in the final report. Bearing in mind the court’s earlier observation that it is the creditors that are in the driver’s seat,” Hay questioned in the discussion on Campbell’s report.

Batts eventually mentioned the Bob Marley case which eventually reached the Judicial Committee of the Privy Council and how the trustee should be mindful of any situation and not be a proponent.

With respect to Campbell’s application regarding management fees, he refused that application until the first creditors meeting was held. Once that meeting was held, he could review the decision regarding those fees which are likely going to be used to satisfy his fees.

Hay and Tereece Campbell Wong of Caroline P. Hay, Attorneys-at-Law represents Campbell. Mayhew for Mayhew Law represents the FSC. An attorney from The Office of the Supervisor of Insolvency (OSI) observed the proceedings.