• Tottenham chair’s $20m Albany house link

• $1m ‘retention’ potential big recovery source

• Almost 50% of such sums due to failed firm

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The $20m home belonging to the chairman of one of England’s top Premier League soccer clubs has emerged as a potential major recovery source for Cavalier Construction creditors.

Multiple Tribune Business sources, speaking on condition of anonymity, have revealed that a $1m “retention payment” was purportedly due to the failed Bahamian contractor on the residence it was building for Daniel Levy, Tottenham Hotspur’s principal, at the Albany development in south-western New Providence.

Retention payments represent monies that are withheld from contractors until a project is finished and/or any defects have been remedied, and this sum represented five percent of the construction value related to Mr Levy’s home.

It also accounts for almost 50 percent of the $2.02m in “retention payments” showing as due to Cavalier Construction in its management accounts when the contractor, arguably the biggest name in Bahamian construction for the previous 64 years, collapsed into insolvency in January 2020 just prior to the COVID-19 pandemic.

Cavalier’s inability to collect on such payments was cited as a major factor behind the cash flow and liquidity crunch that ultimately resulted in the company’s collapse. Its liquidators, in their first report to the Supreme Court, said it “had recently been building luxury homes for high net worth individuals which involved certain complexities to the project they would not expect with commercial projects...

They then added that there were “challenges the company was experiencing in collecting outstanding retention receivables on projects where the delays were beyond the company’s control. This contributed to an unmanageable shortfall in liquidity that meant the company could no longer effectively trade having exhausted all lines of credit and cash reserves”.

However, there is nothing to suggest that Mr Levy, his family and those involved with his Albany home have done anything wrong in relation to the Cavalier retention payment. The liquidator’s report hints that completion of the $20m residence may have been delayed, and the project not finished, thus providing justification to retain the final $1m.

Andrew Davies, who together with fellow Crowe Bahamas partner and accountant, Kendrick Christie, is one of Cavalier Construction’s co-liquidators, declined to comment on the Levy retention payment or any aspect of the Cavalier Construction liquidation when contacted by Tribune Business.

It is thus unclear whether the liquidators will pursue recovery of the retention payments allegedly owed by Mr Levy and other Cavalier Construction clients. However, their Supreme Court report discloses doubts that these and other sums will be realised - whether at all or to the value shown in the company’s last management accounts as at September 30, 2019.

“At this stage the joint official liquidators are not in a position to estimate the likely recoveries for many of the assets available owing to their current status and the ongoing pandemic conditions that continue to impact the economy,” the report, which does not name Mr Levy or any of the other Cavalier clients involved, added.

“Based on the work undertaken so far, the joint official liquidators are of the opinion that the company is insolvent but at this stage are unable to provide an estimate as to the quantum of the solvency gap.”

The report reveals, though, that the Crowe Bahamas duo have little funding presently with which to finance any pursuit of sums that are owing to Cavalier’s liquidation estate. It shows their belief that they have inherited only $21,00 in cash, demand deposits and other liquid assets despite the balance sheet showing $272,241 as being available.

It is to raise a funding war chest that Messrs Davies and Christie are likely moving to sell Cavalier’s head office, located on Crawford Street in Oakes Field, which was last valued at $2m in 2017, as one of their first actions along with plant, equipment and vehicles alleged to be valued at just under $220,000 plus $7,500 worth of fuel.

Any proceeds from the building’s sale, though, will first go to paying off CIBC First Caribbean International Bank Bahamas, which holds security over it. And, even should these values be realised, it remains to be seen whether the joint liquidators will approach Mr Levy given the potential justification he has for withholding the retention payment.

However, any recovery from this and other sources would provide a major boost to cover some $2.544m in creditor claims. CIBC FirstCaribbean International Bank (Bahamas), with a $570,00 claim, ranks as Cavalier’s secured creditor and heads the queue, with the former staff - who account for more than 60 percent of all claims against Cavalier’s estate - next in line.

Those latter claims involve $1.5m-plus for severance pay and other benefits, while “unsecured creditors” owed a collective $433,574.

Mr Levy is a familiar figure on the English and world soccer scene as the head of Tottenham Hotspur, one of the UK’s top soccer clubs, which has a long history of winning trophies both domestically and in Europe. He also has a reputation as a tough negotiator as well as access to funding for any litigation.

The team’s majority owner is Joe Lewis, the Lyford Cay-based billionaire, who is one of the major investors behind Albany via his Tavistock Group investment vehicle. Tottenham Hotspur played a friendly in The Bahamas against Jamaica’s national team some years ago, and in 2019 were runners-up to Liverpool for the title of Europe’s best team in the UEFA Champions League competition.

The north London-based club is currently coached by Jose Mourinho, one of world football’s most renowned coaches, and features the captains of both England and France’s national teams respectively in striker Harry Kane and goalkeeper Hugo Lloris.

“The liquidation process has experienced significant delays and unexpected complexities as a result of the worldwide pandemic. The joint official liquidators have focused their efforts on safeguarding the assets of the company during this time,” Messrs Davies and Christie told the Supreme Court of Cavalier.

“The joint official liquidators are of the opinion that the liquidation process must continue to advance due to the holding costs associated with keeping the status quo with respect to certain assets. The joint official liquidators do not feel they are in a position to wait for the pandemic to dissipate and the economy to rebound given the significant amount of uncertainty involved.”