By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A BISX-listed bank has been ordered to hand over $63,000 from accounts belonging to an ex-MP and Supreme Court judge to help repay a multi-million dollar debt owed to a US investor.

Deborah Fraser, the acting chief justice, in a September 11, 2024, verdict ruled that a “third party debt order” be made final and CIBC Caribbean (Bahamas) must pay this sum to Dr Paul Fuchs from accounts beneficially owned by Elliott Lockhart KC, his law firm and another entity the latter is affiliated with.

While relatively small compared to the total $3.033m allegedly owed by Mr Lockhart and his firm, the order and award nevertheless represents a start in Dr Fuchs attempting to recover these debts. Tribune Business earlier this month reported that authorities were also trying to seize other assets, such as real estate, believed to be beneficially owned by the ex-judge to help repay the outstanding sum.

However, Dr Fuchs will only gain just over two-thirds of the total $119,886 found to be held in the multiple bank accounts owned by Mr Lockhart and his law firm. For the acting chief justice found that $17,000 of this figure should be “excluded” as it represented monies belonging to “innocent third parties” - namely clients of the former MP who he was providing legal services to.

And Justice Fraser also deducted a further $40,000 as due to Mr Lockhart under the Supreme Court Order that froze his bank accounts some 40 weeks ago. That stipulated he was allowed to withdraw $1,000 per week to cover his “ordinary living expenses”, hence the $40,000 total calculation, as the dispute with Dr Fuchs played out.

Detailing the path to her latest verdict, Justice Fraser recalled how she granted Dr Fuchs and his company, MC Grotto LLC, summary judgment in October 11, 2023, that mandated Mr Lockhart, his law firm and employee Patricia Bullard return the $3.033m with interest to the US investor.

However, the ex-MP and former Supreme Court judge had at that time failed to disclose the existence of any of his CIBC Caribbean (Bahamas) bank accounts or the sums they contained. Dr Fuchs and his Callenders & Co legal team, headed by Dawson Malone, then obtained a Production Order requiring the commercial bank to disclose the account details.

They subsequently obtained an interim third party debt order from the Supreme Court on December 8, 2023, against the bank. CIBC Caribbean ultimately produced details on the type and number of accounts they held for Mr Lockhart and his law firm, along with the balances they contained.

“The bank confirmed that the debtors have approximately $119,886.03 in all accounts held by the bank,” Justice Fraser noted as she moved to consider whether the “interim” third party debt Order against CIBC Caribbean should be made a final one.

CIBC Caribbean reported that it held four accounts in Mr Lockhart’s name and an equal number under that of his law firm, with one final facility associated with an entity called Cyclops and containing a $10,897 loan. The nine account balances ranged from a low of $400.17 to a high of $94,156.

However, Dena Feaste, in an August 14, 2024, affidavit on behalf of the debtors alleged that not all the $119,886 was Mr Lockhart’s property. Separate affidavits from Trudy Reid Ford and Ricardo James Morley, filed at the same time, alleged they had transferred $10,000 and $7,840 to Mr Lockhart, respectively, in connection with legal matters where he was representing them.

Mr Morley’s payment was said to represent VAT due to the Public Treasury on a real estate deal. However, Justice Fraser said his affidavit “merely provides that Mr Morley retained Elliott Lockhart KC to assist him in a real estate transaction. An agreement for sale and closing statement is exhibited. However, no numerical value has been evidenced confirming what amount of funds was sent to Mr Lockhart KC”.

However, another purported client, Ludell Wright, said she had transferred a further $8,000 to Mr Lockhart. And Ms Feaste alleged that some $66,118 represented “settlement proceeds due from the Attorney General’s Office to another client, Rodney Livingstone Forbes.

As a result, she argued that a total $94,074 or 78.5 percent of the total should be excluded from any payout to Dr Fuchs because these were monies belonging to third-party clients that Mr Lockhart was holding n trust for them.

Justice Fraser said that despite objections from Dr Fuchs and his attorneys it was clear a collective $17,000 of the near-$120,000 belonged to Mr Lockhart’s clients. “The creditor’s counsel valiantly attempted to debunk the aforementioned evidence and challenge its credibility,” she ruled.

“I accept, in part, the challenges contained in the submissions. However, the debtor has evidenced that certain funds in the account - which the creditor seeks to have taken out of to satisfy the debt - are funds which belong to innocent third parties who are not before the court.”

She did, though, reject Mr Morley’s claim to $7,840 as there were no receipts or invoices to prove had had paid it. As for the $66,118 alleged to belong to Mr Forbes, the acting chief justice wrote: “There was no wire transfer confirmation from the opposing side or any account number evidencing that such funds were sent as a settlement for Mr Forbes’ matter. In the premises I do not accept this evidence.

“Furthermore, the e-mail which the debtors seek to rely on to prove the settlement proceeds were sent is from 2020, which is before the Freezing Order came into effect). This court finds it difficult to accept that settlement proceeds for a client remained in an attorney’s client account for years.

“In my view, that is highly unlikely. I thus reject this - as evidencing any such settlement proceeds in the debtors’ bank account on behalf of Rodney Livingstone Forbes.” However, Justice Fraser found there was sufficient evidence to prove Trudy Reid-Ford and Ludell Wright had transferred $9,000 and $8,000, respectively, to Mr Lockhart and these sums should be excluded from Dr Fuchs’ recovery.

“I shall exclude the $17,000 from the total $119,886.03 held by the bank on behalf of the debtors, representing funds belonging to third innocent parties. Accordingly, I shall make the appropriate order to ensure that such funds are not affected by the final debt order,” she added.

“With respect to the debtor’s submission that under the Freezing Order he is permitted to withdraw $1,000 per week for his ordinary living expenses and it has been approximately 40 weeks since the Freezing Order was in effect - resulting in $40,000.00 being owed to [Mr Lockhart] - such funds will be kept on account to ensure compliance with the Freezing Order.”

And Justice Fraser also pointed out: “The sum total in the debtor’s bank accounts is thus $119,886.03. Though the funds in the aforementioned accounts do not satisfy the debt in their entirety, the creditors are at liberty to pursue the debtors further to recover the outstanding judgment debt.

“It is unclear if the debtor has any other accounts or other financial means. However, based on the evidence or lack thereof from the debtor, I am unaware of any financial hardship/insolvency that would follow if I make a Final Third Party Debt Order... There is no affidavit evidence demonstrating that the debtors would be insolvent if the Third Party Debt Order is made final.”

Dr Fuchs and his attorneys have already moved to seize other assets belonging to Mr Lockhart. The Supreme Court has reviewed, approved and signed off on a so-called ‘fieri facias’ application that authorises court officers such as the provost marshall to seize assets and chattels belonging to persons who have failed to pay Supreme Court judgment awards imposed against them.

The $3.033m debt represents the sum paid to Mr Lockhart over a real estate transaction involving an Exuma-based property. When the deal fell through, Dr Fuchs asked the ex-judge to return the funds, which should have been held in escrow in his law firm’s client account, but the latter allegedly failed to do so.

Mr Lockhart’s current whereabouts are unknown although he is thought unlikely to still be in The Bahamas. Back in June 2024, he was the subject of an Interpol ‘red notice’, which is a worldwide alert issued to all law enforcement authorities, asking them to help locate, and provisionally arrest, the former MP and ex-Supreme Court judge who was once chairman of Nassau Flight Services, the Gaming Board and the Police Inspectorate.

Prior to the Interpol action, the Royal Bahamas Police Force in early 2024 had issued a ‘wanted poster’ for Mr Lockhart after Dr Fuchs lodged a criminal complaint against him. The Interpol action also revealed that other aggrieved investors were making similar allegations to those asserted by Dr Fuchs. Mr Lockhart is represented by attorney Norwood Rolle.