Minister appeals Court Ruling in Favour Capital Bank Application to set aside appointment of receiver
Wednesday, May 07, 2008, St. George’s: Today, the High Court ruled in favor of Capital Bank’s application, by revoking the appointment of Mr. David A Holukoff as the Receiver of Capital Bank International Limited. The basis of the Court’s ruling is the Court’s interpretation of the letter written by the Governor of the Eastern Caribbean Central Bank (ECCB) to the Minister of Finance, requesting the Minister to take action to protect the depositors of Capital Bank International. The Minister construed the letter as a recommendation to appointment a Receiver. The Court took a different view.
The Minister has immediately appealed the ruling and in the process has also sought a “Stay” of the Court’s ruling. If that “Stay” is granted, then the Receiver will remain in control of the Bank.
The Minister’s February 15 appointment was made after it was determined that the bank was unable to honor withdrawal requests of its depositors, which raised concerned about its solvency. A subsequent attempt by the bank to have the appointment set aside was dismissed by the High Court in early March.
In early April, the Minister filed a petition in Court for the reorganization of Capital Bank and expressions of interest have been received from several potential investors. Due to Court imposed restrictions, the investors were not provided with an opportunity to conduct an on-site review of the bank, thus no firm offers or letters of intent were received. With today’s ruling it appears that any reorganization efforts will be put on hold.
The Government remains seriously concerned about the interests of Capital Bank’s depositors and other creditors and intends to exercise its full range of legal rights to reverse the subject ruling.
Ministry of Finance
(473)440-2731/435-0057
