Several weeks ago, there were but snippets of information available about the Malcolm Spicer and CIBC FirstCaribbean International Bank (Bahamas) Supreme Court case.
Much has changed since then.
An online petition in favour of a banking ombudsman for The Bahamas has garnered 1106 signatures from as far away as the United Kingdom, spanning islands throughout the Caribbean, The Bahamas, the United States and Canada as of press time. In that time, a successful town meeting held on March 12 saw an outpouring of support for Spicer while people shared their own banking horror stories. The case has also gained the attention of international, national and local media outlets.
In a court case involving a loan dispute with CIBC FirstCaribbean that has sent Spicer and his family into financial ruin over the past 10 years, he admitted that at times he thought of giving up, but ‘kept on keeping on.’ At present, Spicer indicated that he and his wife are living off of NIB payments.
The heart-wrenching stories and comments of many Bahamians indicate that his case is not an isolated one.
One of Spicer’s supporters queried: “How overdue is this project for the Commonwealth of The Bahamas? Mr. Spicer’s advisor introduced me to this concept several months back and BAMB the lights turned on. It was then, upon reflection, how much we were taken advantage of in this country. I personally can tell, countless of horrid stories of how the “Mafia” style attitudes the banks have dealt with locals. I am so grateful that FINALLY, we have relief on the way…Signed: A grateful Bahamian.”
Another petitioner urged: “May everyone who cares about the people in our islands here please sign this petition. For too long Bahamians have not had the voice to speak up to the banks. Thank God for Mr. Spicer and his advisor’s idea to protect us all. If only the wealthy knew what’s happening here… I’ve seen the countless signed sheets – 1,000 people can’t be wrong!”
A close friend wrote: “I have known Mr. Spicer for many years and know him to be an honest and above-board individual. I am quite disgusted to read the way the bank is treating him and his family and believe this is deplorable of the bank. I am also ashamed to [know] that is a bank that we deal with in Canada – makes me reconsider my patronage of this bank.”
However, one petitioner wrote that the banks’ employees like those on the front line, “are mostly lovely people,” but went on to blast, “the scallywags making the bank policy and paying the top lawyers hundreds of thousands of dollars to carry out their devious practices leave the common man defenseless against these, what would be in other countries, criminal acts. It’s time Bahamians have the same protections and are treated the same as the bank’s Canadian customers.”
Those who attended the March town meeting were disgruntled by Canadian banks’ policy questioning their outrageously high interest rates to their rescinding of verbal and written agreements and their acting without the permission of their clients with regard to their finances.
In a filed affidavit, Spicer alleged that $1.2 million was needed to complete the first two of four buildings of his project, and he only agreed to proceed with the loan after being assured by the Abaco branch manager at the time that additional funding would be given once satisfactory progress was demonstrated.
Despite those assurances, Spicer further alleges that CIBC FirstCaribbean never disclosed that the original loan amount was based upon a fundamentally flawed calculation. Indeed, a 2006 appraisal report commissioned by the bank of Spicer’s property calculated that:
“Proposed buildings: 4 at 4,014 square feet = 12,042 square feet.”
The appraisal report should have reflected 16,056 square feet in its calculation. It was later revealed in one of the bank’s affidavits that the Spicers were not privy to the details of the error on the appraisal. The Spicers also allege that CIBC FirstCaribbean lied in its affidavit, and made a cover up story in their affidavit as well.
Spicer explained that the ‘first stage’ of the project involved just two of the four proposed buildings, and is alleging that he should have been eligible to receive $253,500 more on the original loan which, at $855,500, was based on 50 per cent of the incorrectly calculated $1.7 million.
He is convinced that the mistake intensified the project’s under-funding, adding that a Bahamas Realty appraisal of his property in October 2007 showed that construction work had increased the property’s value by 33.5 per cent. Believing that he had satisfied the bank’s demand for satisfactory progress, Spicer alleged that he received no response from the bank during a 10-month period for additional funding to complete the project.
Despite this, he was still responsible for paying $6,000-$7,000 each month to service the original loan, without any income coming in from the apartments as planned to meet the payments. It was no surprise that the project came to a halt. Spicer eventually sold his Abacom Wireless Services business in 2010 and was forced to use the profits and cash flow from his other company, Abacom Computer Services, to service the CIBC FirstCaribbean loan.
When he fell into default, the bank moved through the Supreme Court to repossess the incomplete apartment/restaurant project, as well as his family home, which was offered as additional security.
As a result, Spicer and his advisors allege that because of the initial underfunding, followed by the flawed appraisal calculation and its non-disclosure, and the failure of the bank to follow through on its verbal assurances, CIBC FirstCaribbean effectively condemned the project to falling into “bankruptcy”. Spicer also revealed that was never asked to produce a 15 percent down payment as implied by the bank manager.
Nevertheless, CIBC FirstCaribbean has repeatedly denied the allegations by Spicer and his attorneys that it was negligent, or guilty of misrepresentation, in its dealings with the project.
As the Supreme Court case continues to unfold, Spicer said last week that: “Following our appearance in [the] Supreme Court on Monday, we are quietly confident that so long as the judge reads our affidavits and submissions we will come out on top.
“We are forming a non-profit association to be called COALITION FOR BETTER BANKING, which will go national and are asking for people in Nassau, Freeport, and the rest of our family of islands to help with the promotion of this organization and to assist with getting people to sign this petition.”
With so much support generated for the Spicers, ‘The Abaconian’ made attempts to contact Gary Brown, chief executive officer at CIBC FirstCaribbean International Bank in Barbados, for his comments on the Spicer case, but were unsuccessful.