Trustee for the Trinidad and Tobago Football Association (TTFA), Maria Daniel, revealed to creditors that the local football body has received 291 financial claims amounting to roughly TT$90.7m. But to settle its debts, the TTFA has ‘an approved financial arrangement’ of US$3m (TT$20.1m) —minus a ‘supervisory levy’ of TT$1.005m.
It means that creditors, collectively, are being asked to write off TT$70.6m owed by the TTFA.
The local football body, which is currently under the control of a Fifa-appointed normalisation committee, did not reveal the source of the US$3m fund. However, the Trustee stressed that the TTFA ‘intends to fund the proposal by virtue of an approved financial arrangement which does not require the collateralization of the assets of TTFA—specifically, ‘Home of Football’.
The proposal by the Trustee was submitted to creditors via email as a precursor to a creditors meeting at the TTFA’s Home of Football in Couva on 5 May 2022, which aims to address the local football body’s debts while avoiding bankruptcy.
The Trustee noted that creditors were divided into three categories: employees with claims for wages or services rendered since 8 May 2021, government and state creditors, and unsecured creditors, which refers to everyone else.
The first two categories will be satisfied first and amount to TT$6.1m, along with the supervisory levy of TT$1.005m. The remaining TT$16.095m will go towards the remaining creditors whose claims, mind you, amount to TT$84.5m.
In correspondence to the creditors, the Trustee suggested what they will be offered:
‘[…] Each unsecured creditor whose claim has been validated and approved by the Trustee shall receive payment in full of the first TT$200,000 of their claim within six months of the effective date.
‘Unsecured creditors whose outstanding balance exceeds the payment referred to […] will receive a pro rata amount (based on their unpaid claims that have been validated and approved by the Trustee) of the balance of the financing arrangement after payment of the claims of the employees and the government and state creditors […] within six months of the effective date.’
Two hundred and fifty eight unsecured creditors submitted claims for TT$200,000 or less. The TTFA’s proposal is that they all be paid in full, minus the 5% service levy. However, the remaining 31 unsecured creditors are being offered 32.4% of the outstanding sum owed to them once they have collected the initial TT$200,000.
By that formula, Soccer United Marketing LLC, which claimed to be owed TT$195,455, will be paid TT$185,683 as full settlement, thereby incurring a loss of just TT$9,772.
Creditors owed under TT$200,000 include former coaches Clyde Leon, Teba McKnight and Nigel Neverson, who have all died before receiving their due, as well as a host of current Women’s National Senior Team players including Lauryn Hutchinson, Kimika Forbes, Chelcy Ralph and Liana Hinds.
However, former Trinidad and Tobago Men’s National Senior Team head coach Stephen Hart whom the High Court ruled the TTFA owes TT$4.9m in unpaid salaries and bonuses and for breach of contract, will receive just TT$1.6m, a whopping TT$3.3m short of the sum in his judgement.
Other former national coaches who also stand to lose millions are Russell Latapy and Dennis Lawrence, as well as past and present technical directors Kendall Walkes and Anton Corneal.
There are two caveats. First, the proposal goes into effect once there is ‘a majority in number and two-thirds majority in value of each voting creditors present in person or by proxy who have a proven claim’.
The ‘majority in number’ of creditors are owed under TT$200,000 and will be delighted with the offer. However, the ‘two-thirds majority in value’ will swing the other way as the top 10 unsecured creditors alone submitted claims for TT$63.8m from the total TT$90m claim.
Does it mean both the majority of creditors and those owed the largest sums have to agree to accept the proposal? Or would one or the other suffice?
Wired868 spoke to six creditors who all commented on the proposed offer on condition of anonymity:
Creditor One (a former coach owed over TT$200,000): “Absolutely ridiculous and borderline disrespectful… but I am going to be guided by my lawyer!”
Creditor Two (a former coach owed under TT$200,000): “Sounds good to me!”
Creditor Three (representative of a former coach owed over TT$200,000): “That’s a paltry offer while the Normalisation Committee and Trustee are being paid handsomely for minimal effort.
“Also, who has provided the loan and why is it so low?And why is the lease for the land [on which the Home of Football stands] still not perfected in favour of the TTFA, as promised by the Sports Minister recently—which would surely enhance the valuation and payment to creditors?”
Creditor Four (a former technical staff member owed under TT$200,000): “Based on what I have read without making an in-depth study as yet, it appears to be reasonable. The TTFA cannot mortgage the future of football in order to pay 100% of its debt.
“We had been asking all along for the executives to make an offer to pay off the debt with a down payment for each creditor (in some cases 100%) and the balance over a period of time, as the fortunes of the Association improve. It fell on deaf ears.
“Of course, I have sympathy for [the creditors owed over TT$200,000]. They worked just as hard as I did and made financial sacrifices. That’s why I think my suggestion of a down payment and instalments over a period of time is the best solution for those in that category.
“I don’t expect them to accept 32.4%. I expect them to try and negotiate a better deal for themselves. I know I would.”
Creditor Five (a former service provider owed over TT$200,000): “It is unfair and biased if creditors who are owed 200k or less are paid in full. They are using what’s owed to those who have debts of over 200k to pay off those creditors, so they can get a majority vote—and scare tactics are being used.
“The fair thing would be to offer 80 to 85 percent to all, so everyone takes a reasonable loss.”
Creditor Six (a former official owed over TT$200,000): “After years of being ignored, it’s not a surprise they’ve introduced such a proposal. But knowing they have an asset and available revenue streams, there is little incentive to take their offer seriously.”
The Trustee warned, however, that is the best deal that the creditors would ever get. Should the proposal be rejected, Daniel warned, the TTFA would be wound up.
‘If the proposal is approved by the creditors and the Court, the TTFA, under the administration of the Trustee, is bound to the terms of the proposal,’ stated the Trustee. ‘In the event that the proposal is not approved, the TTFA will enter into formal bankruptcy proceedings via an assignment in accordance with section 25 of the Bankruptcy and Insolvency Act (in which case the TTFA will subsequently be liquidated).
‘[…] It is estimated that the return for unsecured creditors under a formal bankruptcy of the TTFA would range between zero cents up to a maximum of 12 cents for every dollar due to such unsecured creditor.’
The TTFA’s prize asset is the controversial Home of Football, which was constructed under the watch of former president David John-Williams at a cost that almost certainly exceeded the Fifa budget of US$2.5m (TT$17m).
A valuation by Brent Augustus, conducted in February 2022, put the value of the three-storey 72-room hotel at TT$17.9m. Notably, this valuation follows ‘extensive work’ done on the facility by the Government, over two years, to make it fit to house Covid-19 patients.
“Corporate sponsorship came from Ansa McAl, Beacon provided the public liability insurance, I had a number of companies providing us with the fire extinguishers, Safe Tech, and some other companies and also the fire signs,” said then Minister of National Security Stuart Young, at a press briefing on 22 April 2020. “[…] We had Flow provide the cable and the internet for each room, we had WASA on site within a matter of hours, doing all that was needed to be done to get the water supply working.
“The Defence Force worked overnight to fix the sewerage system, CEPEP—Minister Kazim Hosein and his CEPEP gang—got there a matter of hours after the request, cleared the place, built fire trails…”
Yet two years later, and although the Home of Football is regularly used to house national footballers, the Trustee admitted that the venue is not ‘up to standard’ and the local football body might struggle to recoup even the money spent on it.
‘It may be difficult to find a buyer for the Home of Football due to the specialised use and nature of the building and the necessary cost for completion and upgrades required on the facility to bring it up to standard,’ stated the Trustee. ‘There is currently no lease in favour of the TTFA with respect to the land upon which the Home of Football currently stands.
‘This will be an impediment to any purchaser and may reduce the amount that may be recovered for the distressed sale of this asset.’
Should the TTFA’s creditors choose to snub the proposal and instead liquidate or leverage the assets of the local football body, according to Daniel, they could easily end up with far less than the TT$20.1m on offer at present.
There is one more noteworthy addendum. It is the list of creditors itself.
‘Of the 291 creditors, the Trustee has received proof of claim forms from 59 of the unsecured creditors representing claims of TT$49,636,526.88,’ stated the Trustee. ‘Save and except for the NIB and the BIR, a creditor that does not submit a proof of claim which is validated by the Trustee is not entitled to receive any payment pursuant to this proposal.
‘Please note that this list does not suggest or confirm validity of any claim but (is merely) a listing of known creditors at this time.’
And the TTFA’s current list of would-be creditors is eye-raising. At the top of the pile with the largest bill is disgraced former Fifa vice-president and TTFA special advisor Jack Warner, who is fighting extradition to the United States for allegedly defrauding Concacaf, the Caribbean Football Union (CFU) and the TTFA of revenue properly belonging to the umbrella bodies.
Regardless, Warner is claiming that the TTFA owes him TT$22.7m.
Former TTFA general secretary Sheldon Phillips is the football body’s self-professed second highest creditor. Phillips’ contract, under late ex-president Raymond Tim Kee, promised him handsome commissions on revenue brought into the TTFA’s coffers on top of his salary—a clause he allegedly invoked for grants from the government as well.
Phillips, at one point, was suing the TTFA for TT$2m. However, his current claim is for TT$12.1m.
Former Soca Warriors coach Terry Fenwick and his dodgy compatriot and marketing man Peter Miller are also holding their hands out again.
With then football president William Wallace, Fenwick and Miller both struck deals that were not approved by the TTFA board. In fact, Wallace alleged that the two Englishmen specifically asked that their contracts be kept secret from the board.
Notably, the TTFA Constitution allows the football president to enter into contracts on behalf of the local football body.
Although Fenwick and Miller have already been paid by normalisation committee chairman Robert Hadad—and, in an unrelated enterprise, the Trinidad and Tobago Police Service (TTPS) during the tenure of commissioner Gary Griffith—both still submitted additional claims to the Trustee for TT$4.5m and TT$3.9m respectively.
Incidentally, Griffith’s firm, Security Analyst Services, also submitted a claim for TT$254,603, which is believed to be for work under the John-Williams-led administration.
Another curious case is the unsuccessful Women’s National Senior Team staff headed by Stephan De Four, which was dismissed in 2019 under the Wallace-led administration.
De Four’s contract terms were never seen or agreed to by the then TTFA Board and he was thought to be working pro bono. However, the US-based coach submitted claims for TT$361,000.
Even more bizarre, though, is that his support staff are demanding up to five times as much as the head coach. De Four’s goalkeeper coach, Earl ‘Spiderman’ Carter, has a claim of TT$1.5m while his assistants Darrel Marcelle and Andy Salandy claimed TT$1.38m and TT$981,000 respectively.
These claims are still to be accepted by the Trustee.
‘Where the whole or any part of a claim is disallowed, the Trustee shall notify the creditor and set out the reasons for the determination of the Trustee,’ said the missive. ‘The Trustee’s determination is final and conclusive unless the creditor successfully appeals the Trustee’s determination to the court within the time period prescribed by the Act.’
Should claims be struck off, it would mean more money to be shared among the ‘valid’ creditors and a concomitant percentage increase in the current 32.4% offer. (For instance, if Warner, Fenwick and Miller are all blanked, the remaining creditors will each receive a share of the TT$31.1m thus left on the proverbial table.)
‘Every creditor who has lodged a proof of claim is entitled to see and examine the proofs of other creditors,’ stated the Trustee.
It would be in the interest of bonafide creditors, then, to peek into the claim forms of their less obvious ‘colleagues’. Notably, the Trustee, as one creditor pointed out, has not differentiated between creditors owed for services already provided and those who were denied the chance to work owing to breach of contract.
Hadad took 18 months to hand over the most critical aspect of his mandate, the TTFA’s debt, to professionals. The next two weeks, as Daniel’s team faces off with creditors, will be crucial to the future of the local football body.