By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A former Cabinet minister has been appointed as Judicial Trustee of the late Sir Jack Hayward’s trust, amid a brewing legal war that threatens to disrupt the Grand Bahama Port Authority (GBPA) and undermine Freeport’s future.

Tribune Business can reveal that the Supreme Court on Monday appointed Ryan Pinder, the recent financial services minister, and Deltec Bank & Trust colleague, Paul Winder, as judicial trustees of the ‘Sir Jack Hayward Discretionary Settlement’.

Their appointment, via an October 5 court Order by Justice Indra Charles, was made at the behest of Sir Jack’s children and grandchildren via an ex-parte hearing where only their attorneys, Harry B Sands & Lobosky, were present.

And perhaps more crucially, Mr Pinder and Mr Winder, a former Bahamas Financial Services Board (BFSB) chairman, have also been appointed as the joint receivers for Seashell Investments Ltd.

That is the British Virgin Islands (BVI) company through which the late Sir Jack, via a lengthy corporate structure, ultimately held his family’s 50 per cent stake in the GBPA and its Port Group Ltd affiliate.

Thus the effect of Monday’s Order is to place a 50 per cent ownership stake in Freeport’s quasi-governmental authority, and the company that owns half of the city’s most profitable assets and infrastructure, into the hands of Supreme Court supervision.

Tribune Business sources familiar with the situation said the Deltec duo’s appointment has resulted from the eruption of a furious battle for control over the late Sir Jack’s family trust and estate assets.

This has pitted his son, Rick, his siblings and their children against Patty Bloom, Sir Jack’s long-time partner and her children. And, hovering in the background behind the Blooms, is alleged to be the controversial former GBPA chairman, Hannes Babak.

Sources close to those on both sides of the divide yesterday confirmed to Tribune Business that the dispute, and appointment of the judicial trustees, stemmed from “a battle for control” over the late Sir Jack’s estate and the family’s assets.

Contacts close to the Bloom camp suggested that Sir Jack’s children were unhappy with their share of the family’s assets, and the fact that the ‘lion’s share’ of the estate had been bequeathed to Ms Bloom and her family.

Yet sources close to the Hayward children and grandchildren rejected the “greed” allegation, claiming instead that the situation has arisen from fears that Mr Babak is seeking to take control of the estate via the Blooms and, ultimately, take over the GBPA and Port Group Ltd.

This, though, was countered by contacts familiar with the Bloom side’s position. They argued that the Hayward children were merely using Mr Babak as a ‘bogeyman’ or ‘red herring’, raising his spectre in a bid to get their way.

Thus the stage appears to be set for a second round of family in-fighting involving the GBPA and Port Group Ltd. The first, which lasted for four years, involved the St George family. Now, it appears to be the Haywards’ turn.

The main issue for the Bahamas, in particular Freeport’s residents and the 3,500 GBPA licensees, is that the dispute threatens to “lock up” the Hayward family’s stake in the Port Authority for months if not years.

“Look what happened when the last ex-parte Order was made,” said one source, speaking on condition of anonymity, told Tribune Business.

That Order, issue in 2006, appointed BDO Mann Judd as receivers for the GBPA during the St George estate dispute.

“That Order did not end until 2010, three years later,” the source said, adding that Justice Charles Order this week was “bound” to freeze or lock-up the Hayward stake in the GBPA in similar fashion.

And, as with the St George dispute, it threatens to paralyse decision-making at the GBPA, and could undermine both foreign and Bahamian investor confidence at a critical moment in Freeport’s development.

Whoever wins the battle for control of Sir Jack’s estate and family trusts will ultimately control the fate of a 50 per cent equity stake in the GBPA and, in turn, its future ownership.

The winner’s identity may prove vital for Freeport’s future, as various sources suggested the Bloom/Babak faction wants to retain ownership and eventually buy out the St Georges. The Hayward children, on the other hand, are said to be keen to sell to the right buyer.

“The Haywards have effectively taken back control,” one contact, familiar with the situation, told Tribune Business. “The Haywards understood that after Sir Jack died, Patty Bloom had control, but lawyers showed them she did not.

“Hannes wants to take control of the Port, but the Haywards want to sell it and get out.”

This, though, was denied by sources close to Prometheus and the Bloom camp. “It’s only about the money,” one contact, speaking on condition of anonymity, told Tribune Business.

“Patty was Sir Jack’s partner for many years, and he wanted to make sure most of it went to her. The children and grandchildren want to get a bigger part of the pie.”

Tribune Business understands that attorneys for the other side were yesterday afternoon still waiting for the supporting documents to the Order to be provided by the Hayward children, enabling them to respond.

Sources close to the Bloom camp described the October 5 Order as “basically an ambush”, and added: “What this is really about is the Hayward children want more money.”

They pointed out that Sir Jack’s children initiated the litigation in 2010 when he was still alive, and that it had been previously settled.

“Between the time the settlement was agreed and today, Sir Jack died and the children are afraid Prometheus [a trustee for Sir Jack’s trust] will benefit Patty Bloom and her children, and not them,” the source added.

“They want more money, and the settlement agreement doesn’t give them the sort of benefit they think they’re entitled to. It’s all nonsense.”

The latest eruption could not have come at a worse time for the Government, which is currently embroiled in the middle of a consultation/review process over Freeport’s short and long-term future.

It has already extended the investment incentives that were due to expire on August 4, 2015, for another six months, and is currently assessing the recommendations on potential reforms to the Hawksbill Creek Agreement that were supplied by a committee it appointed.

The outbreak of infighting in the Hayward camp threatens to disrupt this effort, and potentially kill-off hopes the Christie administration has that a new investor/owner will be found to buy-out the two families and take over the GBPA. Investors are always reluctant to walk into litigation.

Tribune Business sources suggested the discord already put paid to one GBPA acquisition offer from a combination of UK-based Highgrove Securities and Kell Ryan, a member of the family that founded the Ryanair airline.

The spark that lit the latest legal battle appears to have stemmed from alleged efforts in May 2015 to remove two trustees for the ‘Sir Jack Hayward Discretionary Settlement’.

The two trustees in question are Richard DeVries and former GBPA chief financial officer, Ian Barry. The October 5, 2015, Order by Justice Charles suggests that an entity called Prometheus Services Ltd was then left as “sole trustee”.

Although the Order is not explicit, ‘reading between the lines’, it is clear that the Hayward children believe Prometheus Services Ltd is ultimately being controlled by Mr Babak.

Tribune Business understands that Prometheus Services Ltd is a corporate trustee for the Hayward Discretionary Settlement, with three directors. They are Felix Stubbs, the IBM (Bahamas) executive; Tony Adderley; and Robert Ungulade.

Prometheus Services’ legal adviser is understood to be Andre Feldman of Freeport-based Argus Advisors, who many observers believe is close to Mr Babak.

Both Mr Babak and Mr Feldman declined to comment when contacted by Tribune Business yesterday, but sources close to both men said the former had “nothing to do” with Prometheus Services.

Yet the October 5 Order mandates that “an inquiry as to the validity and effect of two documents”, both purporting to remove Messrs DeVries and Barry as trustees on May 17, 2015, be held.

The Supreme Court has ordered that, within 14 days, a Prometheus Services Ltd director swear an affidavit revealing “who is the ultimate controller” of it, “and who appears to be in control of its day-to-day affairs”.

And, withing 21 days, Prometheus Services must reveal to the Hayward children and the judicial trustees all documents detailing its communications with Messrs DeVries and Barry, and the man who allegedly executed and signed their removal, Keith Griffiths.

It must also disclose the advice it received, and “communications with Mr Hannes Babak or Mr Andre Feldman in relation to the removal of” Messrs DeVries and Barry.

The far-reaching Order also requires Prometheus Services Ltd to reveal who “sought and obtained” the trustee removal documents; whether this done on its instructions and by whom; and whether this was approved by its Board of Directors. This has to be done inside 14 days.

The Order obtained by Sir Jack’s offspring also requires Prometheus Services Ltd to disclose “the reason” for seeking the other trustees’ removal; “the circumstances” in which the ‘removal documents’ were drawn up and allegedly signed by Mr Griffiths; and to even identify the computer or word processor upon which they were written.

It also wants disclosure of what was said when the ‘removal documents’ were being signed and witnessed; what Mr Griffiths was told about the reasons for the two trustees’ removal; who the witnesses were; and whether he received independent legal advice before doing so.

Prometheus Services Ltd and the other trustees are now prevented from acting as trustees for the Sir Jack Hayward Discretionary Settlement by Supreme Court Order.

Messrs Pinder and Winder’s task is to preserve the assets of both Seashells Investments and the trust, safeguarding them and preventing them from harm.

The duo can each charge the princely sum of $500 per hour for their services to Sir Jack’s trust.

To help them, they can hire attorneys in the Bahamas, UK, Cayman Islands and BVI.