Senior Counsel Rex McKay and Keith Massiah yesterday submitted to Chief Justice Carl Singh that there was no reorganisation plan for Globe Trust and Investment Company Ltd (GTICL) before him and therefore his options in determining the case were to either order compulsory liquidation of the firm, or refuse the order and terminate its seizure.

In a 12-page submission to the court in response to submissions filed by the objectors in early April, the two senior counsel said it was only the Bank of Guyana which could develop and submit a reorganisation plan to the court. The Ram and McRae plan, the judge was told, was only an exhibit to the petition of the Bank of Guyana (BoG) for the compulsory liquidation order for Globe Trust and could only be properly categorised as a proposal.

The objectors to the BoG's petition for compulsory liquidation of the entity had argued that the onus was on the BoG to put forward a reorganisation plan for GTICL. As such, McKay and Massiah submitted that the court's powers to order reorganisation of GTICL under Section 49 of the Financial Institutions Act (FIA) could only be exercised in relation to a plan developed and submitted to it by the BoG. He also said that FIA did not confer an obligation on the BOG to develop a reorganisation plan as it said that the BoG "may" do so.

At the start of the hearing in January, McKay had told Justice Singh that the petition could have only been defeated if it was shown by objectors to the petition that GTICL could be resuscitated and that the bank had drawn erroneous influences in rejecting the Ram & McRae Plan. "Unless this court can find that the Bank of Guyana was wrong to reject the plan, that is the only way [to save the institution]," McKay had told Justice Singh on February 5, just after the hearing started.

In their submissions yesterday, the senior lawyers said that for the court to determine whether it should decree compulsory liquidation under Section 49 of the FIA, it had to ask itself whether there was any evidence that there was a reasonable prospect for GTICL to be returned to financial soundness via reorganisation or otherwise. They argued that once reasonable prospects were ruled out, the question of reorganisation did not arise. McKay and Massiah submitted that the test of reasonable prospect did not mean a mere possibility, but the evidence had to go further to enable the court to hold that the purpose in question will more probably than not be achieved.

They said that the BoG, after taking possession of GTICL under Section 42 of the FIA, proceeded to consider whether there was any reasonable prospect for GTICL's return to financial soundness. But evidence before the court was that in informing GTICL's directors of the BoG's intentions to take possession, the directors were further informed that the institution was to be liquidated on the said day.

The attorneys said that the Board of Directors considered the Ram and McRae plan, which was submitted by GTICL as the prospect for the institution's recovery, but this was rejected after further information was requested. They dismissed GTICL's attorney's arguments that the Board of Directors could not have taken such a decision and argued that being policymakers did not exclude them from the decision making process.

"It is submitted that the evidence discloses that the Bank acted 'fairly' to GTICL throughout the proceedings prior to and up to the decision to move to the court for an order for compulsory liquidation," McKay and Massiah said.

They argued that the FIA created conditions precedent to the reorganisation of an institution which are the provision for an increase in GTICL's capital; arranging of new shareholders and reconstituting GTICL's board of directors or appointing new officers. They argued that no credible evidence was put before the bank or the court regarding the first two issues. They stated that no attempt was made to satisfy the provision of possible amalgamation with another licensed financial institution.

The lawyers said that it had not been shown that the BoG abused its discretion in refusing to adopt the Ram and McRae plan. "The Bank of Guyana acted reasonably in that it could act in favour of the plan only if the plan contained clear and cogent detailed programmes of action that would lead the Bank of Guyana to conclude that there are reasonable prospects for the timely restoration of GTICL to financial soundness."

They said the plan was not definite as regards the persons or institutions prepared and ready to invest equity into GTICL's operation.

They also insisted that if the Bank had acted on vague hypotheses as postulated by the plan, then it would have been acting on immaterial or irrelevant considerations and this would fly in the face of the principle that one's discretion must never be influenced by irrelevant considerations which would render the decision ultra vires.

The lawyers further added that the ultimate test of whether the bank acted reasonably in the matter was in its determination of reasonable prospect.

"In the view of the Bank of Guyana, there is no convincing programme in the Ram and McRae plan indicating that through it GTICL could in a timely manner be restored to financial soundness," the submission argued.

The lawyers asserted that a court would generally refrain from substituting its own discretion for that of the empowered authority and would only intervene if it was desirable to do so in the interest of justice when there has been a wrongful exercise of discretion.

The judge is now to give his ruling on the matter and will send out notices informing when he will do so. He assured attorneys in the matter yesterday that he intended to deal with the issue "very expeditiously."

Yesterday when the case was called for report, McKay informed the court that his skeletal submissions would be half an hour late, even though he had a deadline of April 21, to reply to the defence submissions and have these served. However, he informed the court that the submissions were affected by cricket and power outages to which Justice Singh said he had not heard that remark.