The Leeward Islands Airline Pilots Association (LIALPA) has filed an application for an injunction to block the airline’s management from moving “pension funds”.
The matter, filed on behalf of pilots who collectively own 41 per cent of the funds, will be heard in the Antigua High Court on Thursday morning.
LIALPA president Captain Patterson Thompson told Barbados TODAY that the company would likely face additional legal action.
At issue is the transfer of US$5 million from Antigua Commercial Bank (ACB) to First Bank in St Thomas, US Virgin Islands, which LIAPA contends was done arbitrarily.
Patterson said the pilots only recently learnt that an account was opened on March 18 in the bank in the USVI in the name of LIAT (1974) Limited.
“As far as LIALPA is concerned that money was moved without permission. It is not their money to move and we want that money back. I have instructed our lawyers to place an injunction on LIAT. The hearing is on Thursday at 9 a.m. for LIAT not to . . . move monies out of that bank account any more,” he said.
“It is likely that I would have to sue LIAT in order to return that EC$13.5 million . . . . I have instructed the lawyer to sue LIAT to bring back in that money into the jurisdiction of Antigua and Barbuda or a suitable company that can handle the amount of funds.”
The LIALPA president was firm that the legal action was the right step, given the strong possibility that the account could be seized and the money forfeited if anything happened to LIAT, a situation he termed “totally unacceptable and infuriating”.
“The company had the opportunity to tell us and the board of directors that they had taken this action. They had the opportunity . . . in the last weekend in May to tell us at the Regional Consultative Mechanism Meeting that they took this money from the escrow account and placed it in St Thomas; but they didn’t tell us then. It is only after repeated calls and pressure on LIAT that I happened to find out that US$5 million of the money in the escrow account was moved to this bank account in Thomas.”
When the Trinidadian-based CLICO collapsed in 2009, the LIAT Pension Fund was just one of many client investments thrown into peril.
Following the collapse, LIAT discontinued paying contributions to CLICO and has since been paying the funds into an escrow account at ACB.
However, LIALPA and the nine other unions representing LIAT employees have long argued that LIAT is the sole signatory on the ACB account.
Documents obtained by Barbados TODAY show that as at June 30, 2014, total LIAT pension funds amounted to EC$44,356,346.73. Of this, EC$30,434,418.78 was held in escrow and EC$13,921,927.95 was at CLICO. The escrow funds are split between two banks: EC$16,934,418.78 at ACB and the remaining US$5,000,000 at First Bank in St Thomas, US Virgin Islands.
Compounding the problems at LIAT is tension between pilots and the management over outstanding backpay and the late payment of salaries.
Patterson said taking the issue to shareholder governments was a “waste of time” and the LIALPA was fed up with the situation.
“The pilots have had enough. I am very cognisant of what LIAT means to the region and it is the summer peak time and people are travelling. I understand that clearly, but the pilots cannot take any more . . . . At some time the straw is going to break the camel’s back, so I am not in the mood to have too much more discussion with LIAT. I’ve tried, I’ve written, I’ve spoken to Dr Gonsalves in St Vincent, I’ve spoken to the chairman of the board, I’ve spoken to the former Prime Minister of Antigua and Barbuda the Honourable Baldwin Spencer and nothing has changed,” Patterson added.
In a short statement issued this evening, LIAT’s corporate communications specialist Desmond Brown denied that
the funds were being misused and clearly stated that the pension funds were secure and separate from the company’s other funds.
“There is absolutely no co-mingling or misuse of the pension funds. All of the unions, and there are ten unions within the LIAT network, have been notified about the location of the funds,” he told Barbados TODAY.
“As it relates to the application for an injunction filed by LIALPA, the company will respond to the application disclosing fully all of the facts to the court. The company continues its consultations with its union partners in order to formalize the pension plan.”